$16 Million Holding Back the Internet

I'm not going to make a lot of friends by saying this, but I think that the hundreds of thousands of people who collectively chose to donate $16 million to Wikimedia Foundation in order to keep Wikipedia ad-free in 2011 are making a big mistake.

Don't get me wrong. I get the allure of an ad-free reference hub. I don't mind the annual membership drives that eat into public radio and television programming.

I just don't think that the online collaborative encyclopedia is doing the Internet any favors by sticking to its commercial-free platform.

"This fundraiser had all the ingredients of what we love about Wikimedia projects: people come together, contribute what they have, and together we do something amazing," founder Jimmy Wales wrote over the weekend.

It's amazing when Jerry Lewis raises a boatload of money over a holiday weekend for muscular dystrophy. It's amazing when folks get together to build a new house for a needy stranger through Habitat for Humanity. It's amazing when Foolanthropy drums up creative ways to raise donations for worthy causes. But what did Wikipedia fans do, exactly?

The final count registered more than 500,000 donations to Wikimedia Foundation, with the average donor kicking in $22. Nearly 130,000 more donations came in at the local chapter level.

Wales' mug has been gracing Wikipedia pages for weeks. It's not a surprise to see his panhandling work. One has to wonder how much more than $16 million Wikipedia could have raised if that same space were handed over to Google (Nasdaq: GOOG  ) or Microsoft (Nasdaq: MSFT  ) to populate with paid search ads.

Wikipedia claims to be the fifth-most-visited site in the world. It's routinely on the first page of relevant search queries through Google, Yahoo!, and Microsoft's Bing. The perpetually updated Wikipedia entries make it a somewhat unreliable source, but that's also the charm of the self-policed site.

Would its credibility really be dealt any kind of blow if it turned to a portal giant for major monetization? Would its growth really stall? How much less would Facebook be worth than the latest $42.37 billion being bandied about if it had resisted attempts to make money off its own sticky site?

"From the bottom of my heart, and on behalf of the more than 100,000 active volunteers, thank you," Wales concluded.

I'm left wondering how many of those "volunteers" would be better off earning a chunk of ad-supported revenue. I'm left wondering how many advertisers have to resort to less effective old-media marketing, or perhaps overpaying for ads on inferior websites through Google's AdWords program to generate leads, because they can't run ads on Wikipedia.

Donors and volunteers will naturally argue that they're working toward a higher cause of uninfluenced integrity, but don't the volunteers already have to put up with the temporary spammers and biased revisions that make the open-ended site so dynamic?

Wikipedia's been shunning ads throughout its 10-year history, so it's not as if I expect that to change. The money -- and opportunities -- being left on the table aren't new. I'm just not sure that staying user-supported is something worth applauding.

If you have to ask: No, I wasn't one of the hundreds of thousands to donate.

Should Wikipedia remain free of ads? Share your thoughts in the comment box below.

Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz still leans on Wikipedia from time to time, even if he doesn't agree with its anti-monetization policy. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On January 04, 2011, at 3:23 AM, dag154 wrote:

    I disagree with your point of view.

    Knowledge is hugely valuable; impartial knowledge that is. When people start financing your operations (through advertising in this case) bias is an inevitable outcome -just consider US politics if you doubt this point of view.

    Wikepidia has been a powerful force in the development of the internet as a resource to obtain rich, intelligent and unbiased information. They have been an integral part in turning the internet into the most important tool which exists in modern society.

    In fact I think I should make them a donation ...

    On a closing note, your post proves the saying: " all advertising is good advertising " :)

  • Report this Comment On January 05, 2011, at 12:34 AM, JohnAlbers2 wrote:

    There have been quite a few attempts at commercial Wikipedia replacements or alternatives, including one effort by Google which had the option of paying contributors.

    Without exception they have been failures. The free market has spoken. All hail the invisible hand.

    It's very easy to sit back and look at a highly successful model and complain about all the ways that you believe it to be flawed. While you are busy complaining, they're busy building the worlds largest reference work, operating the 5th most trafficked website, making it easy and fun to be well informed, and possibly bringing about a desperately needed rebirth of intellectualism. So, I hope you can forgive me for giving their view about how one should go about running Wikipedia a lot more weight than yours.

    Cheers.

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