Wikipedia's financial future

When reviewing the list of the ten largest internet companies on the planet, all but one are major corporate players with deep pockets... The exception being Wikipedia- a not-for profit organization which sits proudly in 7th position.

Their financial situation is comparatively modest compared to the other top ten , but it is growing. While they off set a vast proportion of their costs through volunteers donating their time to post and edit content, they also rely on cash donations. In 2007 Wikipedia’s cash contributions jumped 40 percent to $2.2-million from $1.3-million in the prior year. With some recent big donations, their budget is set to be $4.6-million this year.

Currently, Wikipedia employees 15 individuals, and has recently hired a new executive director, Sue Gardner, formerly head of The Canadian Broadcasting Corporation’s (CBC) web operations.

Sue's primary task is to provide direction for the future of Wikipedia. There is endless debate as to which route to take- how should Wikipedia raise and spend money. Should it stay on the present course of seeking cash donations to keep its servers running? Or should it explore other sources of revenue — such as advertising models?

To put the advertising model to test, consider the following: Wikipedia has over 2 million articles, generates over 50 million unique visitors a month, and 6 billion page views per month. Place one ad per page (6 m CPM's a month) at a 50% sold rate , with a $2 CPM, you get a cash flow of $6 million a month, or a total of $70 million per year. Make that a 100% sold rate and you get $140 million in ad sales annually.

That is some serious cash! Just imagine what Wikipedia could do with that money to further enhance the users experience on Wikipedia. It could purchase books, photographic collections, entire archives of information to include on the site. The possibilities to acquire and make public useful and interesting information are mind boggling.

Proponents of Wikipedia might feel that adopting an advertising strategy may be “selling out” and contrary to Wikipedia's not for profit philosophy. But what if they were to adopt an advertising model without compromising their commitment to the spirit of not-for profit?. What if they only sold page space at a drastically reduced rate to not-for-profit/non profit organizations such as The Red Cross or The World Wildlife Foundation or Greenpeace?

Even if Wikipedia sold the ads at 50 cents a CPM (a 75% discount) Wikipedia could generate $20 million a year (assuming 60% sell rate) That is still a wack of dough to help further develop content and it provides the not for profit organizations an opportunity to raise awareness (and donations). It could be a win-win for all.

Wikipedia needs to make a decision as to how it wants to grow and how it will raise the funds to do so. So many good things could come if they would consider dipping its toe in the advertising pool.

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