The Future of Wikipedia

The founder of Wikipedia, Jimmy Wales, in defining the mission of Wikipedia clearly stated Wikipedia as a non-profit organization reliant on donations to sustain itself in the business of gathering information. He has also clearly stated that he would not seek advertising on Wikipedia as a means to monetize it. So the question on what is the business model of Wikipedia is an interesting one. Wikipedia works on the model of crowd sourcing relying on the user community to edit and add information. But what motivates these users to contribute with information? How does Wikipedia pay for its staff and development? Is its business model vulnerable because of its heavy reliance on external funding? Thinking about these questions does make one wonder if there are any opportunities for monetization beyond the donations from the users.

Although a lot many questions are raised on the reliability of Wikipedia for information, it is considered to be a fairly accurate source of information given the large number of users enhancing its quality through corrections and citations. With over 3 million articles and a high page rank on Google, Wikipedia could generate enough and more revenue by opening up to advertisers on its pages. Although this goes directly against the stated mission statement, such a move would guarantee the long-term sustainability of Wikipedia, a valuable source of information referenced by 250M people. Furthermore, just as an example, the additional revenue generated through advertising can be used to address social issues such as education of the under-served masses who in turn would be encouraged to contribute to Wikipedia with deeper insight on topics lesser known to the outside world. By encouraging such initiatives, Wikipedia could continue to exist as a non-profit organization minimizing its reliance on external funding and at the same time helping with other social initiatives.

Amongst the many questions, the first question that arises is whether the founder would hurt the sentiments of the users, more specifically the ones who contribute out of a sense of giving or sharing their knowledge by allowing advertisements. But if the new, self-sustainable and socially responsible Wikipedia can continue its existence as a non-profit organization with an objective that fits in line with the sense of giving objective of the contributing users, then there should be no reason for these users to turn away from contributing.

More resources could mean more initiatives or new ways of delivering content. In any case, users could be given the option to turn off advertisements. There is no doubt that Wikipedia would never have achieved its meteoric success if it were a for-profit entity. However, at present, less than 2% of its financing is through earned income which comprises of published DVDs (done in Germany) and a split ad revenue partnership model with Answers.com.

The underlying premise in the future would be to continue operating as a non-profit organization but eliminating the fragility of its existence which at the moment is based on a heavy reliance on donations. Interesting Jimmy Wales has been hunting for riches with a new for-profit company built on the same wiki idea.

By Sharad Piplani, MBA Class 2010