Hmm.. I didn't necessarily read it as they were hiring from outside necessarily.. I'm sure it's not uncommon to have interviews internally even if all of the potential candidates are already employees.
> I'm sure it's not uncommon to have interviews internally
In fact depending on location it may be legally required - I'm fairly sure this is the case in the UK (in addition to having to advertise the opening externally too, even if there's absolutely no intention of hiring anyone external) - please someone correct me if this is wrong.
Probably the sort of thing early-stage startups can get away with not doing because they're very under the radar, but it's certainly happened at mid-sized companies I've worked at.