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Wikimedia = $192,000/day in donations?
Posted by Scott on 28th December, 2008 | 47 commentsI was on a Wikipedia page today and saw a huge “Please read this message from Jimmy Wales” banner at the top of the page. His letter (dated 12/24/08) asks for donations to Wikimedia to support the site, and explained how they hoped to raise $6M to cover their annual expenses.
The Wikipedia donations page states that they’ve earned $4.5M of that $6M so far, but after analyzing donations that they’ve received just over a 30 minute period this afternoon (about $4,000, with many donors giving $100 USD!) and extrapolating that data out to one day, it looks like they’re currently getting $192,000/day in donations, or $70M/year. At $192k/day, they’ll hit their $6M goal in 8 more days.
Wales explains that, like a “national park or school, [he] doesn’t believe advertising should have a place at Wikipedia.”
“Do I like Wikipedia? Yes. Is it valuable? Yes. Is it some kind of altruistic gift to humanity, or a public resource like a national park? No. Wikipedia is a community-built, privately owned, Internet resource. Capitalism works. Why not apply it to Wikipedia, if even in a very controlled way accepting limited ads from specific ad partners, and earn tens or hundreds of millions? Why ask for charity?
If Wikipedia costs $6M to operate, and ads could generate $100M/year (probably far more actually), then why not take that $94M surplus and give it to social programs, schools, etc — pay to put Wikipedia kiosks in every school and library. Become an organization that spreads charity and funds other programs, rather than just a charity that sucks resources to operate itself. Wikipedia could do far more good in the world that way.
So here’s my takeaway from this: a) if they’re doing $192k/day in donations, maybe this charity model will actually work for Wikipedia better than advertising, as a gimmick, if that donation rate continues, and b) Should other sites that help people consider a donate model — are you using a donate model and is it working?
I just don’t buy the whole donation thing. Maybe it’s working for Wikipedia ever since they launched this new “give us money” campaign on 12/24, but it sure wasn’t working for them before that, and I can’t imagine that donations will prove to be a viable model as the only revenue model over the long term for any entity. Maybe 1% of your users will donate, and if you get as many users as Wikipedia, that’s a lot. But for most businesses, ads will squeeze $ out of the other 99%.
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Sunday, December 28th, 2008 at 4:45 pm and is filed under Web Business. If you like this post why not subscribe to my full text RSS feed. You can leave a response, or trackback from your own site.
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I’ve seen these donatian drives before and they work perfectly well in during chrsitmas season. People are in donation fever. They give much more and much easier during christmas time than the rest of the year - even their favourite charities or churches receive more during christmas than the rest of the year. So, probably the extrapolation you did will not hold true.
I wouldn’t mind to see one or the other advert on wikipedia - as long as it is really content related (e.g. travel).
What i do not understand is how a site like Wikipedia runs on 6MUSD.
Agreed. One would have to analyze the data over a longer period of time to get the average.
How they do it on $6m per annum is beyond me!
Maybe they should try to use an Amazon wish list instead of donations; then off to ebay.
They will soon make there $6 mil.
I think there are a few problems with ads:
1) they lose credibility, wikipedia already has this problem, maybe they don’t want to aggravate it
Matching ads may also be hard. Contextual is never perfect.
2) ads may discourage contributors.
3) their business as a foundation is managing content production and distribution not raising money for other charitable programs.
1) I don’t think accepting ads = less credibility. Some of the most respected entities in the world accept plenty of advertising (CNN, BBC, Google).
2) Share the ad revenue with the contributors!
3) That’s their business now because they’re small and don’t have enough money. Give them $100M/year from ads, and they could easily scale their organization to do more than just run wikipedia.org.
The BBC had better not accept advertising, we all pay a TAX in the UK to have bbc without advertising. We pay over $200 a year for the rest of the World to benefit from this!
It is the main reason they justify the charge.
Wow, I had no idea you guys pay a specific tax to keep advertising off of BBC.
We pay what is called a “TV Licence” which in fact covers everything to fund the BBC. I call it a TAX because it is a legal requirement to have one if you have a TV, even if you don’t watch or use any bbc service.
They justify this by saying that it keeps the BBC independant and does not have any advertising etc.
Any way you slice it, that’s a tax … if you have no choice about paying it, it’s a tax.
As for Wikipedia … personally I wouldn’t donate to them, but I have no objections if other people want to.
fergus, I think your missing the point somewhat. Wikipedia is a charitable organization. Like most (if not all) other charitable organizations, it is run from the donations of it’s patrons. It’s not an obligation like your tax.
Yes, they could make a considerable amount more from incorporating Adsense into the site. They would make a phenomenal amount more by selling advertising space straight to vendors. How much would Nike pay for a banner on the sneakers page? Or Microsoft for a banner on the operating system page?
The point is that Wikipedia is not about making money, and it’s most definately not about advertising. It’s an encyclopedia, which is unique because the information it provides is controlled by you, me and anyone else that makes the effort. Being free from any commercial intrest’s will ensure that this is always the case.
Thanks Scott for raising such a sensitive topic.
1) internet ads, especially contextual ads are not the same as tv ads, they are a lot harder to control and verify, and people may trust them more then tv ads, and if they screw up, wikipedia is screwed too. Plus in a TV ad there is a huge time interval between the moment you see it and the moment you make a buying decision, that time can be almost 0 on a website ad so if an ad is bad in a website it affects people a lot worse then a TV ad.
2) sharing the revenue may bring in a lot of bad contributors that would contribute just for the sake of receiving revenue. The quality will suffer. Plus how do you share revenue when everyone can modify a page? When there’s only one author for a page is easy but when you can several for the same page is not so easy.
3) they say small is the new big. Getting too big may just decrease the quality of their main business.
I disagree with the statement that Wikipedia is NOT an altruistic resource. This line of reasoning is why Americans do not support increased funding for education and no longer value learning for the sake of learning. If knowledge and education were as deeply valued and privileged among those who value capitalism, we would have skyscrapers built for learning institutions rather than financial institutions. I fully disagree with the writer and personally think that Wikipedia IS altruistic. Ask anyone who lives in a Communist nation how valuable free learning and free access to non-partial information can be.
Regardless of how noble your pursuit, if you want to stay small or risk failing altogether, operate as a charity with your sole revenue source being donations. If you want to grow and scale, figure out how to make money from it. It’s not about how much someone values education. Wikipedia is not a government entity. To survive and thrive, it should be operated as a business and smart business decisions should be made to drive revenues.
Business does not equal evil. Business can do good if well managed. Wikipedia as a top 100 site could earn far more with a few highly screened carefully selected advertising partners that would dwarf their $6M/year costs and thus create a huge opportunity for them to spread Wikipedia or do some other good for humanity with that $.
I take it you wont be donating then Scott!! lol
Although Wikipedia is a valuable resource I think they should stand on their own two feet and sort out their own cash flow - with whatever way they choose.
I think its a very clever move by Wales to ask for the donations. With that kind of user base its a no bainer that it will bring a large amount of cash. When the average person sees the donation page maybe it triggers alarms that they will lose Wikipedia if the dont donate - we all know how useful it can be and I think we would miss it.
What will happen when people stop donating?
I don’t feel sorry for a site that gets tens of millions of monthly visitors and which could earn $100 Million a year by adding one single adsense ad to their site. What if people stop donating? Then wikipedia would be forced to act like a real company.
Why is everyone holding Wikimeida to the same standards as a company. It is not a company, it is a Non-Profit Organization. All they are asking for is if you enjoy the site and want to make sure it is around in the future to give a little cash. If you would rather have pop-up ads every time you search then fine. That being said I do think they should use their high volume site to generate some additional revenue through corporate sponsorships. They could get millions by putting a small corporate logo on the bottom of the pages which states “Content Sponsored In Part By…” Large companies get some free advertising and a tax write off for their donation. We get not having to give them donations and don’t have to look at nasty flashy ads. Win Win…
“It is not a company, it is a Non-Profit Organization. All they are asking for is if you enjoy the site and want to make sure it is around in the future to give a little cash. If you would rather have pop-up ads every time you search then fine.”
Rubbish. Making money and wrecking the user experience do not have to go hand in hand. You’ll never see a popup ad on any of our allenthusiast.com sites. Wikipedia costs millions per year to operate and could generate tens of millions in ad revenue from non-intrusive sponsorships and contextual ads. They’re failing to do so because they’re operating under the misguided assumption that they’re some kind of altruistic gift to humanity, when actually, they’re a community-based encyclopedia that’s leaving millions of cash on the table for someone else to grab — if they want to be responsible, they should grab their fair share of cash using non-intrusive ads and spend that money on stuff that helps humanity, like wikipedia terminals in schools, humanitarian donations, etc.
I agree that the organization should work to increase its revenue and look at alternative ways to fulfill their mission, particularly in third-world nations. I also think you are correct that they should be doing more to support their wikimedia chapters, and provide wikipedia terminals. Sadly the organization feels they only need to provide for themselves and not the much larger network of volunteers and their 20plus global chapters. That being said, I still think corporate sponsorship is a much more appropriate and less controversial option revenue raising.
In 2006 the organization posted a logo for Virgin United during its fall fundraising campaign. The deal was that Virgin would match the donations Wikimedia received in the campaign and in return was getting some free advertising. Just having this small logo on the pages caused a huge outcry from Wikipedia users who stated that this was the beginning of the organization using advertising. Since that occurrence the organization has not toyed with the idea corporate logos on the site. However, I feel if the Wikimedia Chapters were getting some of this cash, or some kind of support from the use of logos, they would be more receptive, they could even create local sponsorships for the non-English sites. It could be set up that local sponsorship money goes directly the local wikimedia chapter. It would allow the local chapters to really get off the ground, and give them more of a vested interest in the organization.
Overall I mostly agree with you. The major problem is that Wikimedia is acting too small and immature to realize its full potential and thus selling its self and mission short.
Sometimes it happens so, that under kind intentions the greed is hidden
I agree with scott, they need to start putting ads on their site and stop asking for donations. I don’t think people will complain since ads are already on almost every site
Agreed, anyone who uses the internet is undoubtedly used to ads. I think it just comes down to wikipedia not being willing to risk their credibility by using ads. Regardless of the logic of using ads, there would be countless people bashing this decision. The fear is that an advertiser would edit information on that page just to suit their own needs. What if Adidas decided to advertise on the sneakers page and remove all references to other brands? It would put their whole database at risk of becoming very unreliable.
Wikipedia seems to be operating a similar model to PBS and National Public Radio. It’s available to everyone, but they solicit donations from those willing to pay.
Maybe I could get a Wikipedia tote bag, or a mug?!
Wow, now that’s a lot of donations. They will reach their target and even bit it. It’s only a matter of time.
Thats incredible its amazing how many people actually donate to websites these days.
Going back a few replies, just to clarify, BBC programming targeting the U.S. side of the big pond does indeed have advertisements.
BBC America is production of BBC Worldwide, which is a subsidiary of the British Broadcasting Corporation.
Robert Richmond
Yeah i think donations are much better then placing up ads, especially if its a company like WIKI.
Instadigi.com
Scott,
This is crazy!!!
ads worked much better for me (If it’s not a sales page).
Hank
Have you checked if they’ve reached their target yet? This really intrigues me.
Not sure if they have yet reached their target would be interesting to see
Scott
Been a while since this post, are you still writing this blog?
JZ
I’m planning to convert the site into more of an articles/how-to resource because most of my advice I’m posting here is timeless and doesn’t belong in a blog/time/recency based format.
Hi Scott,
So does this mean you will be losing the blog format all together? Or will you use the wordpress platform to achieve the articles/how-to-resource website format.
Thanks,
Jean
wordpress for articles/how-to..
This is unreal. There is no way they are making this much. It might have been some kind of sponsorship deal rather than a large donation.
When I looked at their donations page (http://wikimediafoundation.org/wiki/Special:ContributionHistory/en), $192k was the daily rate of donations across thousands of donors (not one big donor). Probably related to Wales’ big donation push since it’s slowed down now to a trickle of just a few hundred a day (unless they are now only showing a portion of the donations on the donor comments page).
I guess this would make sense. I wonder how much of this money they actually use to keep the servers running and so on.
They really should implement some kind of micropayment subscription system. Might be a good place to start testing different methods of getting a penny here, a nickel there, or even a dollar and offer some kind of low key system to collect.
I use it and would rather do that than give a donation that may or may not make a dent in what they need each year.
They should just put up ads and stop asking for donations. They can probably make a lot more off of ads
192k a day is so damn huge…
What is so wrong about creating a community created system of sharing knowledge that is free for the public, and thus using a not-for-profit donation based business model?
Wikipedia is an altruistic endeavor and not a money making scheme, especially when one considers knowledge is power. Although it has its own unique set of vulnerabilities, it democratizes information that use to be limited to those who could travel to libraries, buy their own library, or consult with experts - all which take money.
Why do I oppose ads? It IS an issue of integrity, whether real or perceived. If several companies are the major advertisers on Wikipedia, do you trust their pages to be completely unbiased? What if a major advertiser threatens to pull out due to “objectionable content” on their page?
Furthermore, pop-up and in-line adds are annoying. I visit Tom’s Hardware a lot, and over the past couple of years I’ve seen adds take over the top, left, right, and bottom of my screen. Heck, these ads even block my view of content, and one of these types of adds required so much power that it totally choked up my netbook and made the site useless to me.
Micro-charging would also turn people away. Would you want to buy a community built article for even 5 cents before seeing it? Would you want to take the time to put your credit card or electronic bank transfer information in for a 5 cent purchase? Considering transactions fees are often percentage plus flat rate, you would also be required to charge in bulk to stay profitable (buy 400 page vies for $20). How would you measure page views - if you accidentally backpage, is that a charge? Then you go forward to the new page because you didn’t finish it, is that a charge? Does the microcharge allow you to always view that page? What if it is updated, do you get charged again?
Personally, I like donation based system. Like PBS, you can still use the service but don’t have to pay - but if you like the service and want to keep it around, altruism will keep you donating.
Maybe what Wikipedia should do for those who want to be spammed with more advertising is to create an “opt-in” parallel site so you can see ads when you visit. Myself, I’d rather donate.
I don’t agree. As long as the community is willing to support it and make it ad-free it’s all good. The last thing we need is wikipedia cluttered with ads and eventualy sponsored articles. Sure it’s a business but if it’s model (donations) is working why change it?
192k a day in donations is really big for such a media. The model of this donation plan has to be flawless.
If wikipedia was created solely by experts giving up their time for the greater spread of knowledge then I would fully support it. What I won’t support is the views of mis-informed individuals writing about subjects they know little about.
“192k a day in donations is really big for such a media. The model of this donation plan has to be flawless.”
I am wondering about this high figures. But the informatione that wikipedia is brought to us is very huge.
I’m not very good in math but with this money thing it would be fun… I think the Wikipedia Org is a necessary project if it can stay free and independent. Knowledge is power.
Wow, now that’s a lot of donations. They will reach their target and even bit it. It’s only a matter of time.
thank you this is nice blog