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Jimmy Wales: Why the recession won't kill digital media

Jimmy Wales: Why the recession won't kill digital media Susan Kuchinskas

Jimmy Wales, the self-made guru of mass content and co-founder and chair of Wikia, Inc., is many things: A founding father of the open-source movement, a visionary internet entrepreneur, a tech pundit, and a media darling. The founder of Wikipedia has managed to -- for the most part -- stay above the backbiting that characterized the online encyclopedia as it mushroomed into the unstoppable arbiter of truth, usurping the mantle of the Encyclopedia Britannica.

Save the date! Hear more from Jimmy Wales during his keynote presentation at ad:tech San Francisco. April 21-23. Register today for ad:tech San Francisco.

With a bundle earned through options trading, Wales became a very early dot-com player, co-founding Bomis, an internet portal, in 1996. Bomis found its niche in erotica and adult content, making enough revenue from ads and paid subscriptions for premium X-rated content to support a few more intellectual sites.

One of those Bomis-funded projects was Nupedia, a stab at an online encyclopedia that Wales founded in 2000 with a single employee, Larry Sanger. At first, Nupedia followed the principles of academic journals, with an author submitting work that was then passed around for peer review, a process that seemed glacial in the dot-com boomtime. Things took off in 2001, when they launched Wikipedia, an experimental version using the wiki platform, which lets multiple people write and edit a page at the same time.

Jimmy Wales is co-founder and chair of Wikia, Inc.

In fact, Wikipedia was an early example of what has become the dominant model for internet content: Provide free tools for user-generated content, let the public have at it, and automatically place ads everywhere. However, Wikipedia, known for its snooty approach to contributions, has remained pure, forgoing advertising revenue and relying on donations. In 2003, Wales set up the Wikimedia foundation, a not-for-profit organization, and gave the foundation full and sole interest in Wikipedia.

Next, Wales co-founded Wikia, a venture-funded, for-profit company that's a more wild and wooly version of Wikipedia. If Wikipedia was a controlled experiment in user-generated content, with Wikia, Wales now aims to enable personal publishing on a similarly grand but less rigid scale.

On Wikia, individuals or groups can own their own wikis -- and ads appear all over the place. Wikia has more than 1 million pages of content in 70 languages, created by 350,000 or so registered users.

In 2008, the company launched WikiaSearch, a user-edited search platform. In February 2009, it got serious about ad sales, hiring Bob Huseby for the new position of senior vice president and publisher. He's tasked with creating sponsorship packages for consumer brands to integrate their messaging into the various Wikia communities.

Much-recognized for his contributions to internet culture and the information economy, Wales remains chief spokesman for Wikia, as he helps guide the future direction of the information economy. He's a fellow of the Berkman Center for Internet & Society, and a member of the board of directors of Creative Commons.

At the same time, as chair of Wikia, he's grappling with the same business-model conundrums as thousands of other publishing executives.

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iMedia: Wikipedia became a huge social force and is, arguably, one of the most important results of the open-source movement, along with Linux. Can you think of some examples of how the Wikipedia ethos has influenced other aspects of society or business?

Wales: We're beginning to see a changed understanding about the quality of work that communities are able to do by working together. For a long time, we had a false dichotomy between the top-down editing model versus wild-and-crazy bloggers that nobody was editing. We're now starting to realize hybrid models into a radical free-speech platform that's thoughtful and responsible. That ethos is starting to spread into other media areas.

iMedia: Wikipedia is user-generated content that is carefully edited and managed on a non-profit site. Wikia is more of a mass content play. Why do we need both?

Wales: They're completely different. If you imagine walking into a library, the encyclopedia is a set of 30 volumes, a very specific type of reference work. Now imagine all the other types of books in the library. That's Wikia.

iMedia: Hasn't Wikipedia, as well as social media in general, made the encyclopedia model irrelevant?

Wales: Not at all. If you look in Wikipedia under Muppets, you'll find about 300 different categories, whereas Wikia has nearly 20,000 articles about the Muppets. For example, there's an article about Ford Motors in Wikipedia that covers the company history, current management, sales, etc. It doesn't talk at all about the fact that once Kermit was on a commercial; that's the only thing the Muppets Wikia people care about.

iMedia: If you were starting Wikipedia today, would you do anything different?

Wales: No. Obviously, we learned a lot over the last eight years. But by and large, I'm very pleased with how it turned out.

iMedia: What learning from Wikipedia translated to Wikia?

Wales: We hired people from Wikipedia who have deep community expertise and understand how to help people function well in the wiki environment. You have to be really sincere about giving the community control. If you do that, it empowers people to do great things.

iMedia: What things are very different?

Wales: We have a lot more programmers, more staff -- we're able to hire because we have investment money. We're pushing for tools to make it easier for people to edit, in order to bring in a wider audience of editors. Also, because we are very much topic-based, if, for example, there's going to be a release of a new video game that we know will be a great wiki, we'll start feeding it and give very strong support to that young community. Wikipedia doesn't have that.

iMedia: This kind of feeding would be for wikis that have strong ad potential?

Wales: Sure. We're an ad-supported website. We depend on page views, and to do that we need to foster community in things people are very interested in.

iMedia: What's the set-up for selling ads on Wikia?

Wales: We have a direct sales force selling ads. On some sites we don't have enough volume, so we partner with Google. We're just beginning the process of working on some of the sponsorship concepts. Some areas we've seen to be effective are doing skins, takeovers, things that are a little bit more about engaging the core community. We have a big proportion of the influencer community, especially games.

iMedia: Are you considering any of the ad models from Facebook or MySpace?

Wales: That's an interesting question. The model for those companies is still very much emerging. I believe that one of the problems we've had on the internet is we've gone down the rat hole of direct response marketing and ignored possibilities of branding. Part of the reason is, because internet advertising is measurable, we focused way too much on those kinds of metrics. We're more interested in branding. I believe Facebook and most internet platforms that are not search will increasingly turn to brand advertising and brand experience.

We're also considering the idea of having [advertisers] sponsor features of the software on the site. We always introduce new features. For example, we've been working on a better printing functionality. So that could be sponsored by a printing company.


iMedia: Do you have technology for aggregating users?

Wales: We don't have anything specifically about that. It turns out our users are pretty easily segmented on their interests. If you're not interested in "World of Warcraft," why did you just come read 17 pages about it?

iMedia: Any updates on WikiaSearch?

Wales: I have my team focused on the front end, working on the user experience, and making sure we have all the wiki-like tools people need to work on the site. We're just cranking away.

iMedia: What would be the critical mass of users to make it useful?

Wales: I don't normally think in those terms. I do whatever I think is the most fun, and hopefully people like it.

iMedia: In the attention economy, when authenticity is more important than great creative, do marketers need different skills?

Wales: Yes and no. If marketers are going to be involved in the social media part of marketing, obviously there's a new set of skills associated with it. But branding is still important, and broadcast still important, in the sense of massive outreach to very large numbers of consumers. You're not going to do that on a Twitter feed.

For people who are participating in Wikia, they're finding their passion and building it. For readers of the site, we know that for every person who's editing, there are a hundred more who are just reading. From an advertiser's perspective, they're looking to reach a very large set of viewers. So they'll view this as a broadcast-type platform.

iMedia: What some of the new technologies and opportunities for interactive marketers?

Wales: I don't see a lot a lot of new stuff going on in terms of technology. We're finally seeing the fruition of some ideas that have been out there for a long time. The ability to target on Facebook is pretty amazing, and it's getting better and better.

iMedia: What about MySpace or Twitter?

Wales: Maybe I'm not in the right demo for MySpace. It hurts my eyes. But I'm on Facebook every day. Twitter? I'm a little unsure, like everybody is, on what their business is. I'm something of a skeptic. I think it's appropriate for marketers to think about how they can use a tool like Twitter or a blog, but for many brands, it's useless. No one really wants to get an update from McDonalds, or a blog post from Snickers. For a super-complicated TV show like "Lost," it makes sense that they need to be engaged online. But a lot of brands just want to reach eyeballs.

iMedia: As the recession continues and possibly worsens, do you think search and user-generated content will stay strong as traditional media dies?

Wales: Definitely. This is where people are flocking, so advertisers will always want to go and reach the public. We see more and more time spent online is with user-generated content, so it clearly will be a huge part of the whole advertising and marketing landscape.

iMedia: Advertising on user-generated content is a lot cheaper.

Wales: I think it's priced fairly. Right now, it's a bit of a bargain to do brand-building online, simply because there are a lot of outlets for reaching tons of people in a very targeted way based on their interests. It's still cheap because the model and metrics have not matured.

iMedia: Do you have any last words for us?

Wales: Let's all cheer up; the recession will be over soon.

Susan Kuchinskas is a freelance writer who has written for Adweek, Business 2.0, M-Business and internetnews.com.

Susan Kuchinskas has covered internet technology since the mid 1990s, when e-commerce was kind of a wacky idea. As a senior writer for Adweek, Business 2.0, M-Business and internetnews.com, she's watched the interactive advertising grow from a tiny...

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to leave comments.

Commenter: Gregory Kohs

2009, March 31

Susan, we need to revisit the "standards of business reporting", such as not swallowing hook, line, and sinker the tall tales that profiteers may tell.

Jimmy Wales told you:

iMedia: Any updates on WikiaSearch?

Wales: I have my team focused on the front end, working on the user experience, and making sure we have all the wiki-like tools people need to work on the site. We're just cranking away.

CNET (today) tells me that Wikia Search is shutting down:


I told you on Page 1 of this column that you've been had. You replied with nods to the "standards of business reporting and the ethos of capitalism". Are you beginning to see the light? Are you able to see the light?

Commenter: Gregory Kohs

2009, March 28

It occurs to me that some further reading might help people interested in this subject learn more about the "ethos of capitalism" that Kuchinskas mentions in the comment above. The piece appeared in The Guardian (and was editorially reviewed, so it is to be trusted):


Commenter: Gregory Kohs

2009, March 27

Or that we have higher standards than liars and frauds...

Commenter: Susan Kuchinskas

2009, March 27

Hi, Gregory. First, neither Wales nor his PR handler said anything about his title to me, let alone demanded anything. I am aware that there is controversy about the founder designation and credit for Wikipedia. According to the standards of business reporting and the ethos of capitalism, the fact that Wales started and funded the project makes him the founder.

This article is about advertising, not about the origins of Wikipedia -- which has been beaten to death. I did credit Sanger as employee #1, and moved on.

Re things like Wikipedia taking the place of professionally authored content, as someone who makes their living as a journalist, I agree with you wholeheartedly. I too prefer information that is carefully prepared according to standards -- and I'd like to continue to get paid for such. Which may just be tough luck for me and you.

We can bemoan the supremacy of user-generated content, but that just makes us oooold. Or at least, old-fashioned.

Commenter: Gregory Kohs

2009, March 27

It's kind of tough to read past words #2 and #3, "Wikipedia founder". Laughable. Did Jimbo demand that you label him as such? Did he ask that Dr. Larry Sanger's name (you know, the guy who brought the wiki software to the encyclopedia table, the guy who named "Wikipedia", and the guy who acted as its editor-in-chief for the formative period) be firmly tied to the label "employee"?

As millions of dollars and thousands of jobs are disappearing at encyclopedias and newspapers, and we lose our professionally-rendered culture of information, what has it been replaced with? Wikipedia? Wikia? How much have they added to the economy?

When journalists have their blinders on and their star-struck spectacles focused on their subjects, the readers are not served. Sorry to be a wet blanket, Ms. Kuchinskas, but...

You've been had.