Wikipedia: Here for now

Wikipedia is operated by the Wikimedia Foundation, a 501c-3 (non-profit) and is aimed at providing free, objective educational content to the public.

Business Model

Wikipedia is operated by the Wikimedia Foundation, a 501c-3 (non-profit) organization that runs a total of 16 projects aimed at providing free, objective educational content to the public. Started in 2001, Wikipedia is a free online open-knowledge platform that contains over 24 million articles published on an array of topics in 284 languages.[i] It is a platform that brings together those who wish to acquire knowledge and those who wish to share their knowledge.[ii] The value of the Wikipedia platform is in its scale (the number of articles) and in the quality of the information (information that is “good enough”) that is provided on these pages.

The company derives its revenue from donations. In 2014, 2.5m people (less than .5% of Wikipedia readers) contributed a total of $50m. [iii] Most of this revenue is funneled into managing the organization’s web properties, investing in engineering infrastructure and apps, and capacity building of the Wikimedia community.[iv][v]

The company is focusing current efforts on enhancing tools for existing editors and on increasing access and diversity of content through initiatives such as the the Wikipedia Zero project which offers the site free of access (internet) charges.[vi],[vii], [viii], [ix]

Operating Model & Alignment

Anonymous, volunteer contributors (Wikipedians) create the articles and content for Wikipedia sites. The volunteers are not compensated or formally incentivized and there are very few limitations on the types of articles they can create or edit. A relatively small number of individuals are responsible for the vast majority of article edits, with 70,000 contributors working on more than 35,000,000 articles.[x], [xi] In addition to creating new webpages, these contributors are constantly updating and editing existing articles. Contributors are the primary drivers of content growth and (theoretically) crowd- regulate the quality of the content. These contributors are more likely than non-contributors to become donors to Wikipedia.[xii]

There are no pre-requisites or levels of expertise required to become a contributor to Wikipedia. However, contributions must adhere to the organization’s policies around the neutrality and verifiability of information. Contributors who routinely violate these policies are blocked or banned from editing. In 2015, Wikipedia banned 381 accounts for violating its policies around creating and editing content.[xiii]

Although the community is largely allowed to operate autonomously, a few hundred administrators are granted special governing privileges that they use to enforce good behavior and arbitrate content disputes. The company has both formal and informal dispute resolution processes managed by volunteers and internal staff.[xiv]

Wikimedia Foundation has both engineering and product teams tasked with streamlining and improving the platform’s software and editing tools.[xv] There are two main methods of editing—using wiki markup and VisualEditor. The wiki markup is accessible by the clicking on an “edit” button on the article requiring editing. Editors are then taken to a new page and can edit the content using the wikitext language. The second option is more user friendly. It enables users to edit pages they land on directly and requires no knowledge of a new language or code. This engineering innovation makes content editing more accessible, enables Wikipedia to attract a diverse set of contributors, and results in better content quality and robustness.

Public policy concerns are a very real risk to the Foundation’s business model as it affects the quality of the Wikipedia community and the webpages the community creates. Because of this, a primary goal of the Foundation, and its significant legal advocacy staff, is to shape policies around access, censorship, copyright, and privacy that directly threaten quality of the Wikipedia community and platform.[xvi] This illustrates how the operational model of the company is leveraged to sustain its competitive advantage of providing high quality information.

Competition & Alternative Models

Citizendium and Veropedia are the most well-known (and failed) competitors to Wikipedia. Citizendium was founded by Wikipedia co-founder Larry Sanger in 2007. It was an experts-based online wiki encyclopedia that, unlike Wikipedia, required creators of articles to use their real names. The site had significant issues gaining traction against Wikipedia. After a scandal involving an article about homeopathy, the organization had difficulty attracting experts to edit content for the site, a crucial prerequisite to attracting web visitors.[xvii], [xviii] Although the site is still currently active, it poses little, if any, competitive threat to Wikipedia.

Veropedia, another failed Internet encyclopedia started by a scion of the founding Wikipedia team, focused its efforts on verifying information before it was posted and on “locking” content– making it un-editable once it had been created.[xix] This business also model attempted to strengthen reliability of information as compared to the information on the Wikipedia web platform. Veropedia relied on advertising to generate revenue and keep the site up and running.[xx] Unable to gain enough traction from readers and editors alike, the site shuttered in 2009.[xxi]

The most likely current competitive threats to Wikipedia may be traditional encyclopedias such as Encyclopedia Britannica and the Columbia Encyclopedia (Encyclopedia.com) that have moved online.[xxii],[xxiii] The content available via the Britannica and Encyclopedia.com websites is viewed as extremely high-quality, though is not (fully) free. For example, Britannica offers both a limited, free ad-based version and a more complete offering and tailored products available by subscription. Britannica’s operating model relies on small groups of editors to create and monitor content, which results in a much more limited selection of content that is covered.[xxiv] Britannica’s target audience is also focused on educators and libraries, much narrower than the target audience of Wikipedia.[xxv]

Other Business and Operating Model Risks:

  • Content diversity & content quality: The main contributors to Wikipedia are predominantly white, male, and living in the United States.[xxvi], [xxvii] The contributors directly impact the types of articles or topics covered in Wikipedia articles and in the points of view that are shared.[xxviii] Thus, a non-diverse contributor base means that Wikipedia is not capturing the true breadth and depth of knowledge, a crucial element of their value proposition. Because it so directly affects the organization’s value proposition, the onus for cultivating this diversity lies with Wikipedia rather than on individuals.
  • Quality of Content: As more content has been created and laws and regulations regarding that content or the repurposing of content have caught up with technological changes, Wikipedia has had to invest increasingly in content monitoring.[xxix] However, the need to rigorously manage content may come at the expense of attracting or retain contributors who may view the quality control as overbearing.[xxx] In addition, ensuring quality of content may also come at the expense of the diversity of opinions for controversial topics such as religion.[xxxi]
  • Retention of contributors and staff: More recently, Wikipedia has suffered from a declining level of contributors. [xxxii],[xxxiii] These contributors are the true value-creators of Wikipedia and losing significant numbers of contributors would be the death knell for the platform. Wikipedia is taking this issue seriously and has plans to alter the culture of the contributor community, which they identify as the main concern.[xxxiv] In addition, several internal Wikipedia staff have left to create competing products of their own such as Veropedia and Citizendium.[xxxv]
  • Compensation of true value generators: Critics argue that donations to Wikipedia should instead be redirected toward those who are the true value creators—the editors of content. [xxxvi],[xxxvii]

 

[i] https://wikimediafoundation.org/wiki/Our_projects

[ii] https://en.wikipedia.org/wiki/Wikipedia:About

[iii] https://annual.wikimedia.org/2014/#editcounterinfo

[iv] https://upload.wikimedia.org/wikipedia/foundation/4/43/WMF2015-16AnnualPlan.pdf

[v] http://www.makeuseof.com/tag/wikipedia-millions-bank-beg/

[vi] https://wikimediafoundation.org

[vii] http://www.wired.com/2013/12/wikipedia-goes-global-as-connectivity-grows-so-does-the-sites-diversity/

[viii] https://upload.wikimedia.org/wikipedia/commons/c/c0/WMF_StrategicPlan2011_spreads.pdf

[ix] http://www.cio.co.ke/news/top-stories/wikipedia’s-%E2%80%98wiki-loves-africa%E2%80%99-contest-enters-second-year,-to-showcase-african-culture-and-fashion

[x] https://en.wikipedia.org/wiki/Wikipedia:About

[xi] https://en.wikipedia.org/wiki/Wikipedia:Wikipedians

[xii] http://blog.wikimedia.org/2012/02/05/who-are-wikipedias-donors/

[xiii] http://mashable.com/2015/09/01/wikipedia-bans-381-accounts/#MjXQwO4jJ8qR

[xiv]https://en.wikipedia.org/wiki/Wikipedia:Dispute_resolution_noticeboard/Volunteering#List_of_the_DRN_volunteers

[xv] https://meta.wikimedia.org/wiki/Communications/State_of_the_Wikimedia_Foundation

[xvi] https://policy.wikimedia.org/

[xvii] https://www.timeshighereducation.com/news/wikipedia-founders-scholarly-web-venture-plays-host-to-a-war-of-words/405097.article?storyCode=405097&sectioncode=26

[xviii] https://upload.wikimedia.org/wikipedia/commons/d/d5/Lessons_from_Citizendium.pdf

[xix] http://www.thestar.com/news/2007/11/04/wikipedia_the_next_generation.html

[xx] http://www.liquisearch.com/veropedia/contrast_with_wikipedia

[xxi] http://www.gutenberg.us/articles/veropedia

[xxii] http://bits.blogs.nytimes.com/2009/03/30/microsoft-encarta-dies-after-long-battle-with-wikipedia/?_r=0

[xxiii] https://hbr.org/2013/02/encyclopaedia-britannicas-tran/

[xxiv] http://www.businessinsider.com/how-wikipedia-killed-encyclopedia-britannica-2012-3

[xxv] http://www.britannica.com/

[xxvi] http://www.theatlantic.com/technology/archive/2013/10/90-of-wikipedias-editors-are-male-heres-what-theyre-doing-about-it/280882/

[xxvii] https://en.wikipedia.org/wiki/Wikipedia:Wikipedians

[xxviii] http://www.wired.com/2015/03/wikipedia-sexism/

[xxix] http://www-users.cs.umn.edu/~halfak/publications/The_Rise_and_Decline/

[xxx] http://www-users.cs.umn.edu/~halfak/publications/The_Rise_and_Decline/

[xxxi] http://www.wired.com/2009/05/wikipedia-bans-church-of-scientology/

[xxxii] http://www.technologyreview.com/featuredstory/520446/the-decline-of-wikipedia/

[xxxiii] http://www.theatlantic.com/technology/archive/2013/10/90-of-wikipedias-editors-are-male-heres-what-theyre-doing-about-it/280882/

[xxxiv] https://en.wikipedia.org/wiki/Wikipedia:Why_is_Wikipedia_losing_contributors_-_Thinking_about_remedies

[xxxv] http://www.wired.com/2007/11/veropedia/

[xxxvi] http://www.makeuseof.com/tag/wikipedia-millions-bank-beg/

[xxxvii] http://www.theregister.co.uk/2012/12/20/cash_rich_wikipedia_chugging/

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5 thoughts on “Wikipedia: Here for now

  1. This is an interesting perspective on Wikipedia, it does seem that quality content monitoring has been the downfall of several competitors and could undo Wikipedia’s operating model if it drives away contributors. I will be curious to see how a couple of things play out:

    1. If the public notices if Wikipedia implements a change in content controls – Wikipedia seems to be often trusted blindly without adding the effect of any changes due to regulations.

    2. How long the public trust of Wikipedia would take to wear off if a large number of contributors have left the platform.

    3. If Wikipedia is able to effectively raise capital or some other means in which to entice contributors to stay / join. Since most money comes only from donations now the alternatives that they would have to consider (such as ads?) could impact the neutrality that I believe has helped drive Wikipedia’s reputation to date.

  2. Thanks for this awesome post!

    It’s interest to analyze Wikipedia as ripe for disruption when the speed of disruption in this space has shortened so dramatically: Britannica dominated for centuries, Encarta dominated for decades, will Wikipedia only dominate for a matter of years?

    Being a free, easily accessible source for information with +24 million articles, it feels like they have a strong moat to have a sustainable advantage, although I can definitely understand that the quality of content would be the weakest point in Wikipedia’s model. For this, my question is how will the perception of “good enough” information evolve in Wikipedia user’s minds?

    I was also considering the parallels between Wikipedia and Threadless in terms of sourcing material for their page and how different compensation mechanisms for contributors could alter the community feeling for these contributors. Could some contributors possibly feel less inclined to write articles if they were paid for their articles (sensing like their hobby now feels like a job)? Would a monetary “prize” for excellent articles maybe work better than a low rate per article scheme?

  3. It’s interesting that you name Britannica and Columbia as competitors to Wikipedia. A different type of competitor that immediately came to mind as I was reading about Wikipedia’s operating model is Quora.com, which similarly relies on user-generated, user-moderated, uncompensated content. The content offering is slightly different — Quora is more of a mixed fact/opinion base on questions or topics, whereas Wikipedia is, as the name suggests, an encyclopedia of information. Nevertheless, the operating models are strikingly similar and the two websites have established similar levels of user engagement, volume of information, and credibility.

    Quora especially came to mind in your discussion of how Wikipedia can increase the level of contributor engagement and whether contributors might ben compensated. I think that one of the core value propositions of Wikipedia is that its content arises solely from users’ passion to share information about a specific topic; I would somehow trust it less if I knew that contributors — not employed with the company — were being paid for their work. Somehow I think the crowd-sourced element and lack of compensation are linked, and it would be difficult to change one without impacting the other. Quora, similarly, does not compensate its contributors, but what it does allow is users to “upvote” the best responses to questions, which gives those contributors a substantial level of recognition within the community, and I think in some ways this is a more meaningful and more effective compensation than monetary.

  4. Thanks for sharing this! It seems like several of the you articulated around quality control and diversification of contributors relate to how Wikipedia creates value. It makes sense that the site won’t be worthwhile for readers unless the content is useful. I’m also interested in considering how Wikipedia is doing on the Value Capture side of its model. Running purely on donations seems in line with the mission of free, open, unbiased information, but also puts the organization in a precarious financial position. As a user, I don’t think banner ads from companies at the top of the page would be any more annoying that the pleas for donations. As long as companies paying for advertising have no control over the content that’s being shared, I think it makes sense to try to supplement some of the organization’s income with advertising. Having a stronger financial base would also allow Wikipedia to start thinking about how to better compensate staff and figure out a compensation mechanism for contributors to ensure the site can maintain the highest quality content.

  5. Thanks for the info! This is a service I use all the time but I was relatively uninformed about their business practices and operating model. You addressed what I would see as the biggest concern for Wikipedia: declining numbers of quality content generators, who in the absence of named attribution for their work or compensation could easily lose interest or incentive for writing in. Do you think that that the best way to address this problem, should it become mission-critical in the future, would be to offer monetary compensation for quality articles and edits? Or is there some secondary currency that could do the job, in a sort of gamification strategy (think Bitcoin or Reddit “karma”). If it came down to a need to provide monetary compensation to contributors, do you think Wikipedia has sufficient capital as it stands to start doing so? If not, how would you recommend they go about monetizing their site/service? Do you think people would be willing to pay to “subscribe” to Wikipedia?

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