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Mar. 21, 2008 at 12:48pm Eastern by Chris Sherman
Search Biz: Probing Wikipedia's Finances, Facebook Toast?, & Google Denies Evading Chinese Taxes
It's well known that Wikipedia is maintained by a legion of volunteers throughout the world. Structured as a non-profit, the site features no advertising, despite being the #7 most visited destination on the web, and a property that most advertisers would kill to get exposure on. Which begs the question: how does a non-profit with that much traffic get the funding to pay for servers, bandwidth, and all of the other expenses associated with running a world-class web site?
Wikipedia Questions Paths to More Money from the Sydney Morning Herald offers a fascinating inside glimpse into Wikipedia's finances, and the people responsible for both raising money and spending it. It also describes an intricate web of relationships between Wikipedia founder Jimmy Wales and some of the organization's supporters, including U2's Bono and venture capitalist Roger McNamee (who, incidentally, is also a key adviser to Facebook CEO Mark Zuckerberg). The article also describes the ongoing internal debate about whether Wikipedia should explore advertising options.
Facebook is hot, with traffic about to overtake MySpace, and the company has enough cash to weather any downturn, but there are a few worrisome signs, says Henry Blodgett in Facebook Toast? Hot Today, Dead Tomorrow--Like AOL?. Blodgett always tries to be provocative, but he makes some good, worthy points.
For example:
- For some early users, the thrill is gone—comScore reports that use among Facebook's core user base—college students—is declining.
- For some geriatric users (a.k.a., us), the thrill has never really been there. Amen to that—I'll confess to never really understanding the appeal of the site.
- The company has yet to figure out the right business model. This is probably the biggest issue. As Aaron Wall wrote in his recent 100% Organic column, Social media traffic does not monetize.
Google yesterday refuted the accusation of tax evasion but admitted failure to meet the tax deadline as it tried to "consult local authorities," according to this article in China Daily. At issue was compensation to Lee Kaifu, president of Google's China operation, and whether his status was as an expat or local.
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By Chris Sherman
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