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22 February 2024

Hammering out Wikipedia’s financial future

By Agencies



Scroll the list of the 10 most popular Web sites in the United States, and you’ll encounter the Internet’s richest corporate players – names like Yahoo, Amazon.com, News Corp, Microsoft and Google.


Except for Number 7: Wikipedia. And there lies a delicate situation.


With 2 million articles in English alone, the Internet encyclopedia “anyone can edit” stormed the Web’s top ranks through the work of unpaid volunteers and the assistance of donors. But that gives Wikipedia far less financial clout than its Web peers, and doing almost anything to improve that situation invites scrutiny from the same community that proudly generates the content.


And so, much as how its base of editors and bureaucrats endlessly debate touchy articles and other changes to the site, Wikipedia’s community churns with questions over how the nonprofit Wikimedia Foundation, which oversees the project, should get and spend its money.


Should it proceed on its present course, soliciting donations largely to keep its servers running? Or should it expand other sources of revenue – with ads, perhaps, or something like a Wikipedia game show – to fulfill grand visions of sending DVDs or printed books to people who lack computers? Is it helpful – or counter to the project’s charitable, free-information mission – to have the Wikimedia Foundation tight with a prominent venture capital firm?


These would be tough questions for any organization, let alone one in which hundreds of participants can expect to have a say.


The system “has strengths and weaknesses,” says Jimmy Wales (pictured above), Wikipedia’s co-founder and “chairman emeritus.” “The strength is, we don’t do anything randomly, without lots and lots of lots of discussion. The downside is we don’t get anything done unless we actually come to a conclusion.”


Even the foundation’s leaders are not unified. Florence Devouard, a French plant scientist who chairs the board, said she and other Europeans involved with the project are more skeptical than Americans such as Wales about moneymaking side projects with for-profit entities.


The project’s financial situation is not exactly dire. Although the group does not have an endowment fund with interest fueling operations, cash contributions jumped to $2.2 million (Dh8.07 million) last year, from $1.3 million (Dh4.8 million) in the prior year. With big gifts recently, the foundation’s budget is $4.6 million (Dh16.9 million) this year.


In the past year, the foundation has tried to become less of an ad hoc outfit, expanding staff from less than 10 people to roughly 15 and moving to San Francisco from St Petersburg, Florida. It has a new executive director, Sue Gardner, formerly head of the Canadian Broadcasting Corp’s Web operations, who expects to add professional fund-raisers and improve ties with Wikimedia patrons.


“Two years ago, if you donated $10,000 (Dh36,700), you might not even get a phone call or a thank-you letter,” Wales said. “That’s just not acceptable.”


Gardner appears to favor an incremental strategy, stretching the staff to 25 people by 2010, with the budget increasing toward $6 million (Dh22 million). Even such relatively simple changes, she said, would keep the foundation from missing out on business partnerships and other opportunities.


For example, project leaders would like to hold “Wikipedia Academies” in developing countries, to encourage new cadres of contributors in other languages. Wales also wants to implement software that makes it less technically daunting for newcomers to edit Wikipedia articles – an idea that has been discussed for at least two years.


It might seem surprising that such a low-key agenda could prove contentious, given that Wikimedia and Wales have also encountered complaints of being incautious with donors’ money. But some Wikipedians want the foundation to be spending more.


“Why should they have to be wise spending such a little amount of money when they could have so much more?” said Nathan Awrich, a Wikipedia contributor from Vermont who advocates limited ads on the site, to help pay for technical improvements, better outreach and even a legal-defense fund. “This is not a foundation that needs to last one more year. This is a foundation that needs to be planning for a longer term, and it doesn’t seem like they’re doing it.”


Gardner said she opposes advertising unless it came down to a choice between “shutting down the servers and putting ads on the site. I don’t think we’re ever going to get to that point, so I don’t see advertising as an issue.”


Wales sounds political on the matter. On one hand, he said he believes “advertising is really a nonstarter” because of the potential harm to Wikipedia’s noncommercial image. However, he also said the subject requires more research, so Wikipedians truly understand how much money the project is leaving on the table by rejecting ads.


“I think it’s a fallacy to say learning about something implies you want to do it,” he said. “I would like to learn about it because I suspect it’s not worth it.”


Another subject getting carefully parsed is the foundation’s relationship with Elevation Partners, the venture firm co-founded by Roger McNamee and U2’s Bono. Elevation owns stakes in Forbes magazine and Palm Inc, among other companies.


McNamee has donated at least $300,000 (Dh1.1 million) to the Foundation, according to Danny Wool, a former Wikimedia employee who processed the transactions. More recently, the foundation said, McNamee introduced the group to people who made separate $500,000 (Dh1.84 million) gifts. Their identities have not been disclosed.


Officially, Gardner and McNamee say he is a merely a fan of Wikimedia’s free-information project, separate from Elevation’s profit-making interests. “He has been clear – when he talks to me, he’s talking as a private individual,” Gardner said.


Yet the relationship runs deeper than that would suggest.


Another Elevation partner, Marc Bodnick, has met with Wales multiple times and went to a 2007 Wikimedia board meeting in the Netherlands. (Wales described that as a “get to know you session” and said Elevation, among many other venture firms, quickly learned that the foundation was not interested in changing its core, nonprofit mission.)


Bodnick and Bono had also been with Wales in 2006 in Mexico City, where U2 was touring. On a hotel rooftop, Bono suggested that Wikipedia use its volunteer-written articles as a starting point, then augment that with professionals who would polish and publish the content, according to two people who were present. Bono compared it to Bob Dylan going electric – a jarring move that people came to love.


McNamee and Bodnick declined to comment.


Although Wales says no business with Elevation is planned, that hasn’t quelled that element ever-present in Wikipedia: questions.


In the recent interview, Devouard, the board chair, said she believed Elevation was interested in being more than just friends, though she wasn’t sure just what the firm hoped to get out of the nonprofit project.


“It is easy to see which interest we have in getting their interest,” she wrote to Wales that day on an internal board mailing list, in an exchange obtained by The Associated Press. “The contrary is not obvious at all: Can you explain to me why EP (Elevation Partners) are interested in us?” (AFP)