How Does Wikipedia Make Money? Business Model of Wikipedia


How Does Wikipedia Make Money

Wikipedia is the world’s most popular online encyclopedia. It is run by the Wikimedia Foundation which is a non-profit organization.

Wikipedia primarily makes money via donations and grants. However, the nonprofit also makes money through things like investments, Wikimedia Enterprise, and merchandise sales.

Founded in 2001 by Jimmy Wales and Larry Sanger, Wikipedia is a non-profit online encyclopedia that’s edited by users and volunteers. Initially available solely in English, the website now has articles in 329 languages. The website, which is based around a wiki editing system, is the largest and most-read online reference site.

Much of this growth is believed to be because the site empowers volunteers and site users to edit and contribute to the creation of articles and listings. Wikipedia has been said to have helped democratize knowledge by making information easily available to people around the world.

What is Wikipedia & How Does It Work?

Wikipedia is a free online crowdsourced encyclopedia that functions as the internet’s largest repository of knowledge. There are 6.5 million articles in English on the site and 56.4 million articles across the 329 languages Wikipedia publishes in.[1] If all the content of English Wikipedia alone were printed out, it would make up 3,065 volumes.[2]

The site has over 280,000 active editors and over 103.6 million registered users who create and make edits to articles in Wikipedia’s database. All of these editors and contributors volunteer their time as Wikipedia is owned by the Wikimedia Foundation and is a registered charity.

Every month, an average of 17,000 new articles are added to the site. However, articles are constantly being updated, and much of the site’s growth also comes from growth in the average article length.

While English Wikipedia has the largest amount of articles, making up 11% of the site, the Cebuano version of Wikipedia comes in second at 10.3%, followed by the German version at 4.6%, and the Swedish version at 4.3%. Cebuano is a language that is spoken in the Philippines. Most Cebuano Wikipedia entries were created by an automated program.

The site is incredibly popular. Every month, Wikipedia receives over 5.1 billion unique global visitors.[3] In August 2022, the site had 23 billion total page views and processed 50 million edits.[4]

People searching for information often click on a Wikipedia page because it shows up at the top of their search engine query. Due to Wikipedia’s size and its authority, most search engines will link to a Wikipedia entry in the top few results for a general topic. Google also embeds Wikipedia content on its search pages to help people get a quick snapshot of a topic.

That sends a great deal of people to the site, but many also go to Wikipedia directly to learn about a topic. For example, Wikipedia often gets surges of searchers looking up a topic after a newsworthy event has occurred. This is partly because Wikipedia is known for quickly updating articles related to topics in the news.

Readers accessing an article page can get a general overview of a topic like a historic event, a biography of a prominent person, or a definition of a philosophical concept. The pages are broken down into sections with a hyperlinked table of contents that can be used to quickly navigate to the part of the article that is most interesting to the reader.

Many articles also have a call out box on the right side that highlights some important statistics. For example, an article about a public figure might mention what they do, when they were born, when they died if they are deceased, and the name of their spouse.

Wikipedia articles have hyperlinks on words to other Wikipedia articles that give an explanation of the concept mentioned. A reader can read an article and click through to other articles to understand the concepts surrounding it. This creates a great networked resource where users can find out all the background information they need on a topic.

On most Wikipedia pages, there are also edit buttons that anyone can click in order to edit an entry. To do so, they need to sign in or sign up for an account. Once they have made an edit, it goes live. However, articles have editors who are in charge of them who later look over the change and accept or delete it.

To make an edit to Wikipedia, the site requires that you cite verifiable sources for your edit. Many edits are thrown out if they don’t meet Wikipedia’s standards. Every Wikipedia page has what’s known as a Discussion Page. On this page, editors and contributors can talk through the changes being made to the page or come up with lists of things that might need to be added.

Readers can look at these discussions to understand if there were any controversies in the creation of the article. Some articles on Wikipedia are so controversial or are the targets of frequent bad faith edits that they are only open for edits to a select number of Wikipedia editors and users. Others are carefully monitored and prioritized for review whenever an edit is made.

Wikipedia also created a way to rate the quality of various articles and notify readers who are about to read articles that the site feels are outdated or missing key information. These notices appear at the top of an article and explain what needs to be added or addressed.

This doesn’t just help the reader understand the limitations of the information they’re about to read, it also helps guide contributors who might want to edit the page. Wikipedia also keeps lists of articles in need of updates for volunteers to work on.

The site also is known for deleting topic additions if the editors don’t feel like they’re relevant enough. In the past, many people tried to add articles about themselves to the site. Unless the person was a public figure, these were deleted.

However, Wikipedia has often received criticism for not having enough articles on its site about prominent women or have been accused of having a gender bias. This is often thought to be because the site’s editors are mostly male. In 2018, 90% of Wikipedia editors reported being male in a survey. Only 8.8% were female, and 1% identified as non-binary or other. Those numbers were slightly better on English Wikipedia, where 84.7% of editors were male, 13.6% were female, and 1.7% weren’t female or male. [5]

Many have claimed that articles about women were less likely to be detailed, expanded, or written in a neutral way. In 2021, a study found that 41% of biographies nominated for deletion were about women, while only 17% of biography articles published were about women.[6]

To try to adjust for this, edit-a-thons were created to encourage the coverage of women.[7]

 

Business Model of Wikipedia

Wikipedia is run by a non-profit foundation called Wikimedia Foundation. The organization, therefore, functions like many non-profits. It raises most of its money via donations.

While the website could very easily make enough money to cover its expenses via advertising, Wikipedia does not allow advertising on its site. That is a policy it adopted to ensure the site would be neutral and fair. Many people who visit Wikipedia during their annual fundraising drives will therefore see an advertisement asking people to contribute.

Generally, Wikipedia asks for a very small amount from each individual donor. The pop-up appears at the beginning of the page. It sometimes tells the visitor how many times they’ve personally visited the Wikipedia website in the last month. It then tells them how quickly they would reach their fundraising goal if everyone gave a small amount.

This money is then used to run the site. However, Wikipedia has a significant amount in reserves. In 2021, the Institute for New Economic Thinking claimed that according to their 2020 financial report, the company would be able to run its services for 75 years without additional revenue.[8]

Once those funds were exhausted, they would be able to run the servers for an additional 63 years if they used all the funds in their endowment.[9] In addition to raising funds from individuals via small donations, Wikipedia also makes money via large donations. For example, Google donated $7.5 million to Wikipedia in 2019.[10]

It is somewhat unclear what Wikipedia intends to do with all the additional money that they are raising over and above the organization’s direct financial needs. But it seems like the foundation has plans to continue to expand their knowledge base by adding more resources and partners to their website.

In recent years, the foundation has been using it to grow an endowment. In 2016, the foundation declared that it had a goal to raise $100 million for an endowment over 10 years. However, the foundation reached that goal five years earlier than expected, in 2021.[11] The organization continues to raise money for their endowment.

The data from Wikipedia’s website is included in a number of for-profit websites and apps. Previously, many of these companies donated money to Wikipedia in recognition of these contributions. However, many companies have pushed for Wikipedia to adopt an enterprise fee-for-service offering. As a result, Wikipedia Enterprise was created to provide companies like Google and Facebook with better access to its content.[12]

For example, Google populates its knowledge boxes from Wikipedia. Amazon’s Alexa and Apple’s Siri voice assistants also use Wikipedia for many of their answers. While Wikipedia doesn’t force tech companies to pay for Wikipedia, it does offer companies who partner with them via Wikipedia Enterprise additional features.

These include things like allowing the companies to share only community-vetted content rather than the newest edits. As there are often edits made on the site aimed at creating insulting or false articles, this protects those companies from sending out misinformation.

Wikipedia’s business model, ultimately, relies on the free labor of its contributors and editors. Some volunteer a significant amount of time to help create this free educational resource. Arguably, no for-profit company would have been able to amass that much content in such a relatively short period of time.

There are no websites that rival Wikipedia for the breadth of knowledge or the number of languages that it has content in. However, there are other online encyclopedias, including Encyclopedia Britannica, World Book Online, and Encyclopedia.com. Companies like Quora, where users answer questions, might also be seen as competitors to Wikipedia as they are also sources that people go to in order to discover answers to their questions.

Wikipedia has considerable program and administration costs. In its 2021 fiscal year, the Wikipedia Foundation spent $67.8 million on salaries and other compensation and $2.3 million in hosting expenses. Their total expenses added up to $111.8 million. However, the non-profit brought in $162.8 million. That left them with a surplus of $50.8 million in 2021.[13]

The company’s 2021-2022 financial plan saw increases in total expenses by 34%, from $112 million the previous year to $150 million.

 

How Does Wikipedia Make Money?

Wikipedia makes money in five different ways. These are donations and grants, investments, Wikimedia Enterprise, and merchandise sales.

Donations and Grants

Wikipedia currently brings in the majority of its funds via donations and in-kind services. Many of these come from small global donors who are users of the site. Others come from large donations given by corporations. For example, tech companies like Google and Facebook have donated to Wikipedia in the past.

In 2021, the Wikimedia Foundation received $153 million in donations and $473,709 in in-kind services. They also received $2.4 million released from their net assets.[14]

 

Investments

Wikipedia makes money from its investment assets. These include investment assets the Wikimedia Foundation hold directly and the funds that their foundation partner, the Tides Foundation, holds on their behalf.

Wikipedia made $4.2 million in 2021 on investment interest on the assets that the Wikimedia Foundation held directly. That’s less than the previous year when the foundation made $5.5 million on investments.

It is unclear how much investment income the foundation made from assets held by the Tides Foundation.

 

Wikipedia Enterprise

In 2021, Wikipedia announced that they would be offering a program for companies called Wikipedia Enterprise. While the organization will not be forcing companies to pay for access to its database, it will be offering additional services to companies that do.

Wikipedia Enterprise is a commercial product designed for companies that use Wikipedia data in high volume. The company announced in June 2022 that its first customers would be Google and the Internet Archive. Companies interested in the product can sign-up for a free trial. [15]

Ultimately, Wikipedia Enterprise makes it easier to package and share Wikipedia content at scale. The product provides a real-time feed of content updates, guaranteed uptime, and other features that aren’t available through the company’s publicly available APIs.

 

Merchandise Store

Wikipedia has a large number of loyal fans and contributors. So, it’s not surprising that the company also has a merchandise store. They sell t-shirts, socks, kids’ clothes, backpacks, and other novelty items with Wikipedia logos or fun designs on them.

The foundation originally used the merchandise store to thank its contributors. They have a merchandise giveaway program where users can nominate another contributor to get a free merchandise gift. However, other people started asking if they could buy the merchandise directly. That’s when Wikipedia launched its public-facing merchandise store.

It is unclear how much money the foundation makes directly from its merchandise sales.

 

Wikipedia Funding, Valuation & Revenue

Because Wikipedia is not a for-profit company, it doesn’t have a valuation. The company’s revenue comes primarily from donors. However, the company’s recently launched Wikipedia Enterprise program will likely create a robust additional income stream.

The Wikimedia Foundation runs Wikipedia and other Wikimedia projects with the revenue they raise. The foundation generated $162 million in revenue in 2021 and $129 million in revenue in 2020. After expenses, the foundation had $51 million left over in 2021 and $16.7 million left over in 2020. These funds are added to the foundation’s net assets.[16]

In 2021, Wikimedia Foundation had $231.1 million in net assets, an increase from 2020 when they had $180.3 million. The foundation also holds money in the Tides Foundation. In 2021, the non-profit reached their goal of creating an endowment of $100 million at the Tides Foundation.[17]

YearTotal RevenueNet Revenue
2019$120 million$28.6 million
2020$129.2 million$16.7 million
2021$162.8 million$51 million

 

Is Wikipedia Profitable?

Wikipedia is run by a non-profit foundation called Wikimedia Foundation and generates a positive net income every year. However, as a non-profit, the organization isn’t focused on being profitable but on making enough money to grow and sustain Wikipedia and the Foundation’s other projects.

The foundation raises considerably more money every year than they have in operating expenses. They are poised to increase their year-over-year revenue considerably after the launch of Wikipedia Enterprise, a program that will see tech companies pay Wikipedia for supported access to its data.

 

Conclusion

In conclusion, Wikipedia is a powerful website that has revolutionized the way we access information. The free-to-use model has been copied and mimicked by many other websites and services, but none have come close to matching Wikipedia’s ability to provide accurate, comprehensive, and unbiased content.

At the end of the day, Wikipedia is a non-profit. As such, it’s not looking to make money. But that doesn’t mean it isn’t profitable.

It may be counterintuitive, but Wikipedia makes its money by not making money. By allowing anyone to contribute and participate in building out the site, it creates a pool of contributors who are invested in its future and help it grow. The more people who care about what you do, the more likely they are to support you—whether financially or otherwise.

And this is exactly how Wikipedia has grown into what it is today: a free online encyclopedia with over 55 million articles in hundreds of languages worldwide.

The internet has become an integral part of our daily lives. It is a place where we can learn about anything, connect with others from all over the world, and share our ideas—and it’s only getting better.

The way we communicate and share information will continue to evolve as technology advances. But Wikipedia will always be there for us, providing a platform for anyone to learn about anything they want.

We hope you’ve enjoyed learning about the business model of Wikipedia, and we’re excited to see what the future holds for it. It’s been a pleasure writing this blog, and we hope you’ll come back to us next time!

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Sources

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  3. Statista
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  6. Sage Journal
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  8. Institute for New Economic Thinking
  9. Institute for New Economic Thinking
  10. Wired
  11. Daily Dot
  12. The Verge
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  17. Wikipedia