Could Wikipedia Actually Close in the Next 3-4 Months? Let's Take A Closer Look.

By Li Evans

There's some articles out in the blogosphere right now quoting a speech given by Florence Devouard at the Lift '07 Conference in Geneva last week.  Florence Devouard is the chairwoman of the Wikimedia Foundation which runs the non-profit Wikipedia.  What has sparked a lot of buzz is what she said about Wikimedia's funding, that basically, one could summarize that Wikimedia is in pretty dire straights.

“At this point, Wikipedia has the financial resources to run its servers for about 3 to 4 months. If we do not find additional funding, it is not impossible that Wikipedia might disappear”.

Now that stated, Wikimedia's had to do some back pedaling on what was actually stated in the speech.  Sandra Ordonez, Wikimedia's communications director has been doing "cleanup" and posting on blogs that have the piece from Devouard's speech with the following:

So, with that stated, I opted to do a little digging, especially in light of the news that they just raised over a million dollars (US) in the past few weeks.  Also, although not directly relevant is the fact that Wikia,Inc.,  the for profit "sister" of Wikimedia, just raised $4 million in capital from Bessemer Venture Partners last year.  I just kept wondering, how in the world could Wikimedia be in that dire of straights?

The issue at the root of the cash crunch at Wikimedia Foundation, is its growing popularity.  Its growing popularity means, the need for more hardware (servers, etc.) and higher hosting fees for the network sites, since Wikipedia is now in several languages.  Last year alone the Wikimedia Foundation had to shell out close to $190,000 in hosting fees.  I thought perhaps that this could be one of those foundations that pay their directors exorbitantly, but not the case here at all, salaries  and wages were just over $107,000.  So if they have a tech person or two, plus their director and their communications director, that $107,000 is a pretty decent amount for their staff.

I then went from their financial statements to look at who their publicized benefactors were, from which in 2006 they received just over $1.3 million in contributions.  There's not too many "big" names on there.  Yahoo! does contribute with help with their servers in China, Dell with discounted equipment, and Answers.com created their "1 Click Answers - Wikipedia Edition" software.

But then I saw one company, in particular that jumped out at me, on the $1,000 to $4999.99 category - Wikia, Inc.  So I guess Wikimedia Foundation expects the general public to believe they are in these dire straights, without absolutely no one to help, so that the general public will just open their wallets and donate. 

Me, I'm a bit more skeptical and less believing of speeches and hype.  Do you really believe that Wikia, Inc. would let Wikipedia - it's flagship "sister" site - close?  I don't doubt the the venture funding folks took a look at Wikipedia and that was one of their major reasons for investing that $4 million in Wikia, Inc.  If Wikipedia closed, just how would that look for Wikia, Inc. and their chances for future funding? 

Comments

[BrunoG]

Thanks Li for mentioning my post from LIFT, but let me point you to another one where I relate a discussion I had with Devouard, because she never said that Wikipedia would shut down: she just said that they had 3/4 months of cash in the bank, but she repeatedly told me that the had "no worry for the future" of Wikipedia:
http://www.lunchoverip.com/2007/02/the_wikimedia_c.html
The idea that Wikipedia could "shut down in 3/4 months" is a morph of her original statement by bloggers that were not at LIFT. Have a happy day, B.

[David Gerard]

Um, Wikia is not a "for-profit sister" of Wikipedia/Wikimedia. It's a completely separate organisation - your phrasing implies it's a for-profit subsidiary, like Mozilla Corporation/Mozilla Foundation. This is not the case, even though the press keep getting this wrong. (We figure another six to twelve months of corrections every time from both Wikimedia and Wikia may alleviate this.)

[Li Evans]

Bruno - basically what I was trying to point out, was that the possibility that it would shut down it pretty absurd. Wikia, Inc. wouldn't let that happen.

David - In reality it is "a-kin" to Wikia. It uses its platform and Mr. Wells has interlinked the two together on more than one occasion. Plus, as I've stated, who REALLY believes that Wikipedia would just shut down, there's no way that'd ever happen because of it's "kinship" to Wikia. Wikimedia is Not-For-Profit ... Wikia is for profit .... Just like I'm my parent's daughter, and I'm a red head, and my sister is a brunette. We're both rooted from the same place - we're still related just different.