- It's fun
- It's interesting (I'll come back to that point)
- It's worth something when talking to VCs.
We came with a number that was quite astonishing, simply because we went further than a simple "ads valuation" (Google also bought power user and maybe star/ecosystem worker). I will not disclosed that number because we've done it for fun and because I love Wikipedia.
But I came accross a very interesting post from aVC (as always) starting with this question Why ads are so hated ? His point of view is that Ads are Usefull.... and ads are content when relevant. He is right, in a capitalist economy ads are content (look at the number of ads on youtube =46k ) and they are usefull because they are answers to problems and needs.
But that's in a capitalistic environnment even if you intend to give the money to Charity as AVc does with is blog (30k$/year) and was hoping for Wikipedia to !
"I just don't get that. Ads are content just like everything else. Good ones that are relevant (and wikipedia being a search/keyword driven site could target the ads so easily) and attractive are additive in my opinion. But clearly not everyone feels that way."
But let's come back to the Wikipedia valuation:
WatchMojo as made simple hypothesis (109M uniques and 1.6B pageviews with 50% of the traffic inside US and the rest outside) and based his worked on two piece of ads (one 728×90 leaderboard and one 250×250 billboard) + ads on search. Cost would go on IT (2M$), Administrative (0,6M$) and on salary for contributers (0 to 6M$ based on 27'000 power users).
Here are the results :
"It could generate $2.8 million per month off display/banners advertising" [...] In a given month, Wikipedia.org stands to make $757K in search. a yearly profit of $35 million!' Based on similar sales (using the P/E Multiple) it came to 'roughly a "$580 million market value for Wikipedia.org".
Calacanis called it a very very conservative valuation, I think he is right (our number is higher). The comments are really interesting and are the heart of the debate (@ Scobeleizer for example). It's not about "Ads = Content" but rather are they "In or Out" (capitalism) ? Charity is IN and it raises good arguments like Cass' one.
Therefore my question is :
Would any VC have financed Wikipedia even with a commercial proposition ?
Probably not. So it's out ! And Wales intends to keep it that way.... and even if 1b$ is good (very, very) for charity, I think he is right.
Wikipedia is a king because it's a philosopher... Wikipedia could not have worked (think about the first 49k that made it the size of a real encyclopedia, working for something that could die -and already had once- back in 2001) without being non profit [dot]