Is Wikipedia really in danger?

by Mathew on February 10, 2007 · 15 comments

Update 2 @ 1:24 Feb. 11:

More info on the exact nature of Ms. Devouard’s comments at Laurent Haug’s blog — he’s one of the founders of Lift (a hat tip to Scoble for the link). Sounds like the three months is a bit of an exaggeration, but at the same time, Wikipedia still appears to be a little short of cash. A good overview from Bruno Giussani here.

Update @ 5:32 Feb. 10:

Seth Finkelstein says a hard look at Wikipedia’s numbers suggests that the comments by Ms. Devouard are an exaggeration. And my friend Rob Hyndman brings up an interesting point: What ever happened to all the talk about Google providing free hosting and bandwidth to Wikipedia? That idea came up at one point in 2005 and the two seemed close to a deal, but then nothing happened.

Original post:

Florence Devouard, chairwoman of the Wikimedia Foundation, caused a bit of a stir at the recent Lift conference in Geneva by suggesting that Wikipedia is running out of money and could “disappear” — a comment I first saw at Nick Carr’s blog (nice of Nick not to dance on Wikipedia’s grave, considering he said last year that the enterprise was effectively dead). The original report came on a blog written by Philippe Mottaz, a Swiss multimedia producer and journalist. According to his report, Ms. Devouard told the conference:

“Wikipedia has the financial resources to run its servers for about three to four months. If we do not find additional funding, it is not impossible that Wikipedia might disappear.”

wikipedia logo.jpgThere is also a similar report from Bruno Giussani, an author and the European director of the TED conferences. Meanwhile, a Wikimedia staff member named Sandy Ordonez has posted a comment on Nick’s post saying “Ms. Devouard’s comment was taken out of context” and that “Wikipedia will not be closing any time soon. Ms. Devouard was simply referring to the ongoing, pressing needs for funds that Wikipedia, like most nonprofit organizations, face.”

That seems like a bit of a stretch to me — it’s hard to imagine in what other context you could use the word “disappear.” But perhaps Ms. Devouard was simply using her platform at Lift to raise awareness that Wikipedia needs donations to continue. According to Mr. Giussani, Wikipedia now has 350 servers and requires at least $5-million U.S. just to keep the service alive, let alone grow. A recent fundraising drive raised $1-million.

A couple of things spring to mind — the first being: Couldn’t Chad Hurley or Steve Chen, who are now multimillionaires, or Jeff Bezos or Steve Jobs or one of a dozen other billionaire geeks cough up a measly $1-million or $2-million to keep the lights on at Wikipedia? And the second is whether this might revive interest in Jason Calacanis’s idea of running small ads on the site, which he said at one point was worth as much as $5-billion (he has more on the ad idea here).

Oh yes, and one other thing: Why doesn’t Wikipedia do a deal with Amazon to use its S3 virtual hosting to handle the site’s data demands? Don McAskill, CEO of SmugMug, says doing that has saved the photo-sharing site about $500,000 a year, and they’re only using it for part of their site.

  • http://www.markevanstech.com Mark Evans

    It’s like Devouard was begging for money the save way that PBS does from time to time! As for whether a young buck will donate some of their cash to Wikipedia, when was the last time any one of them did some philanthropic?
    By the way, I like the new look – much cleaner (and Web 2.0-ish) than the old one..:)

  • Mathew

    Thanks, Mark — your redesign inspired me :-)

    And I agree, Ms. Devouard’s comments did sound a little like Goldie on a PBS pledge drive.

  • http://sethf.com/ Seth Finkelstein

    The numbers can’t be right. See my post:

    Wikipedia is NOT going to “shut within 3-4 months”

  • Mathew

    Thanks for the link, Seth — but I don’t see how what you posted “debunks” anything that Ms. Devouard (who presumably knows what she’s talking about) said in her comments, assuming they have been reported properly.

    The figures you quote from Wikipedia say that it raised $1.3-million, but also notes that expenses for hosting more than quadrupled — and says that operating expenses (for which we don’t get an actual number) tripled in 2006.

    That could easily put Wikipedia in a position where its costs are escalating and no money is coming in, which I assumed was the point Ms. Devouard was trying to make.

  • http://sethf.com/ Seth Finkelstein

    I’ve updated my post with a link to the financial statement (I can’t put it here because otherwise my comment will get trapped in the spam-filter). Operating expenses for 2006 were “$47,777″, indeed triple (loosely) the 2005 figure of “$18,067″. But that’s not going to break the bank. They spent half again as much in travel as operating expenses.

    Hosting expenses in 2006 $189,631.

    There’s no way you get “$5 million” from numbers like that.

    They had half a million IN CASH there!

    Does Not Compute.

  • Mathew

    Thanks for that, Seth. I must admit, those numbers don’t seem to come anywhere near the $5-million mark.

  • Matt Bostock

    Maybe Wikipedia should modifiy, secure and adopt the Coral cache CDN system? Having cached content would be a big downside but it’d mean that anyone wanting to contribute a server and bandwidth could do so.

  • http://www.digpagerank.com Mong

    I think they should consider every other option except running google ads.

  • http://www.douglaskarr.com Doug Karr

    Wikipedia could turn into an immensely profitable business by simply turning on sponsorships and advertising. Imagine how much money they could make off of Microsoft adding an advertisement to the Microsoft page.

    The line between advertising and content is clearly drawn since writers don’t profit from any advertising on the website. I realize ‘wiki’ purists would scream at this… but it’s a no-brain solution to a money issue.

  • Mathew

    I agree, Doug — although there’s no question that’s a bit of an ethical quagmire. What if Microsoft wanted to put an ad on the page about Linux — or vice versa?

  • http://www.freetube.us.tc Joost

    How could you no be able to keep the site alive with the millions they recieved in donations, I mean bandwidth is actually quite cheap – and I”m sure many companies like google would offer help in that respect just to have their name affiliated with wikipedia – they could say “We donate to wikipedia” makes them look good.

  • Alex

    I also am also all for wikipedia puts ads on their website, as long as they do it inhouse and not partnered with google or yahoo or msn, and there is no kickbacks of money to the article authors.

    Wikipedia is growing in mindshare everyday. I am finding when I search on google for information, that 95% of the time the best article is the top 10 is from wikipedia.org, and then I think “Why didn’t I go to wikipedia in the first place?” => Old habits die hard but I can see over time, more and more people will just goto wikipedia and skip google/yahoo/msn when searching for information.

    Wikipedia could potentially make as much $$ or more than google is making if they start showing ads. They can funnel that money back into improving wikipedia.org and expanding the service, or even advertising that wikipedia is the best place to find information on the web.

    Wikipedia may even be able to allow registered users to opt-out of the ads, and still make enough $$ off of advertising to pay basic costs.

  • http://www.LunchOverIP.com BrunoG

    Thanks for linking to my posts Mathew. In fact, Devouard’s comments were not “an exaggeration” – she said they had money in the bank for 3/4 months, but never translated that into “Wikipedia is going to shut down” as some bloggers have done. There are many questions of course surrounding the sustainability of Wikipedia given the incredible growth and the feeble revenue streams, but Devouard told me repeatedly at LIFT that she did not worry about the future of Wikipedia. B-

  • http://www.shaykh.org Mohamed Yaseen Kassam

    Correct me if I’m wrong but isn’t Jimmy Wales (Wikipedia’s founder) working on a search project with Amazon. Surely, that will generate some revenues for the Wikimedia Foundation.

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