New Web Sites Seeking Profit in Wiki Model

New Web Sites Seeking Profit in Wiki Model

Published: September 4, 2006

Every day, millions of people find answers on Wikipedia
to questions both trivial and serious. Jack Herrick found his business
model there.

Darcy Padilla for The New York Times

Jack Herrick started wikiHow, a how-to Web site that allows anyone to write and edit entries, in January 2005.

In 2004, Mr. Herrick acquired the how-to guide,
which featured articles written by paid freelance writers. Although the
business made a profit, he realized that the revenue brought in by
selling advertising would not support the extensive site he had in
mind. “If the page were about how to get a mortgage, it would work,” he
said. “But the idea was to be the how-to guide to everything.”

in January 2005 he started wikiHow, a how-to guide built on the same
open-source software as Wikipedia, which lets anyone write and edit
entries in a collaborative system. To his surprise he found that many
of the entries generated by Internet users — free — were more
informative than those written by freelancers.

proved you could get there with another method,” Mr. Herrick said.
Several months ago he sold eHow to focus on the new site, which now has
10,000 entries in English, Spanish and German.

Darcy Padilla for The New York Times

A page from the wikiHow site, which hopes to turn a profit based on
advertising and now has 10,000 entries in English, Spanish and German.

Mr. Herrick is
hardly the only entrepreneur inspired by the efficiency and low cost of
what has become known as the wiki model. Although Wikipedia is operated
by a nonprofit foundation, ideas for advertising-based wiki sites are
beginning to take their place alongside blogs and social networking
sites as a staple of Silicon Valley business plans.

In addition
to Wikia, a site devoted to topics judged too esoteric for the online
encyclopedia, there is ShopWiki, for product reviews, and Wikitravel,
for tourism advice. Several start-ups allow users to operate their own
wiki sites.

“Wikipedia is an encyclopedia and this is about the
other 999,000 books in the library,” said Ben Elowitz, chief executive
of Wetpaint, a start-your-own wiki site.

Others wonder how big
that library can get. All of the companies making consumer-oriented
wikis are privately held and do not release revenue figures. But so far
not one of them has come close to the popularity of Wikipedia,
according to Nielsen/NetRatings. WikiHow had 1.1 million visitors in
July, Wikia had just over 270,000, and several other wiki sites had too
small an audience to be measured by the Nielsen/NetRatings methodology.

Andrew Frank, a research director at the Gartner Group, a
technology consulting firm, said that all of this interest in wikis
might rest on some naïve assumptions.

“The assertion that these
sites are cheap to run is questionable,” he said. For example, to sell
a substantial amount of advertising, wiki sites might have to filter
for objectionable content. And he says he believes that ads on wikis
could be worth less per impression than those on sites that aim at a
more specific audience.

“I think there’s going to be a lot of wikis,” Mr. Herrick said. “But I’m not sure how many of them will make money. “

are more optimistic. Last month John Gotts, an entrepreneur known for
buying the rights to domain names, agreed to buy the site for $2.86 million.

would never have paid this much for any other domain,” Mr. Gotts said.
“I can’t think of one that would be worth more.” He pointed out that
the site drew traffic before he bought it, even though it had
little content.

The wiki concept was invented in 1994 by Ward
Cunningham, a computer scientist who created a program called
WikiWikiWeb as a way to share programming techniques. He named his
creation after the Hawaiian word for fast.

“The subject I had in
mind was the knowledge necessary to write good computer code,” Mr.
Cunningham said, “but I realized it would have broader implications.
It’s a medium that allows people to collaborate more easily than they
could in systems that are modeled after the precomputer world, like

Over the last few years, wikis have gained traction as
tools in the business world, where companies run them on internal
networks to foster collaboration on complex projects. The Gartner Group
has predicted that half of all companies will use them internally in
some fashion by 2009. There has also been at least one failed
experiment with wikis in journalism: The Los Angeles Times tried online
“wikitorials” but quickly abandoned the idea.

Even Jimmy Wales, who founded Wikipedia, is looking for ways to
broaden — and profit from — the wiki concept. With financing from
technology luminaries like Marc Andreessen and Mitchell Kapor, he and
Angela Beesley started Wikia, which includes 1,500 separate wikis, from
the Star Wars-focused Wookieepedia to user-generated pages on
depression. Although Wikia is a for-profit company, it was founded with
some of the communitarian idealism of Wikipedia, and its business plan
calls for it to donate money to that foundation.

never going to be a billion-dollar-revenue business,” said Gil
Penchina, the company’s chief executive. He said that the site
currently made less than a dollar a page per month, although the site’s
growing number of pages could make that significant.

“It feels to me like Craigslist,” he said. “It’s a small business, but it’s a good business and it makes a lot of people happy.”

wikis become a big business, some of that idealism may fade — and
consumers may begin to resent contributing to the sites free. So far,
though, the sites are growing fast, thanks to dedicated volunteers.

Crane, a 75-year-old retiree who lives in Altamonte Springs, Fla., has
written scores of entries for wikiHow on subjects both practical (how
to make pot roast) and profound (how to get old without feeling old).
“I’ve been writing all my life and I always wanted to have my name
known,” she said. “I’d like to get paid — I put a lot of hours in. But
it’s nice to know that people are being helped.”

Wikia and
wikiHow operate much like Wikipedia: they let all users contribute and
stipulate that any content they generate may be used freely, much as
open-source software is. Other start-ups, including, are
departing from the traditional collaborative spirit of the wiki model,
in that they will let users decide who has permission to contribute to
the wikis they start.

Mr. Gotts, who has been paying for in $10,000 installments with a final payment of about $2.8
million due within six months, said that he intended to share revenue
with those who used his site to start wikis. “The main way we’re going
to make money,” he said, “is to lead the trend for users to make

He said that he would let users register
subdomains free on topics of their own choosing — he suggested that
might be anything from to — in the hope they would attract advertising or e-commerce.

But Ramit Sethi, co-founder of PBwiki, another make-your-own wiki site,
said that it was still too early to determine what model would turn
wikis into money-makers.

“Nobody has found the de facto business model for wikis,” said “It’s kind of the Wild West.”


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