Wikia and the Commercialization of Open Source Communities Why study Wikia? • Largest and earliest for-profit Wikis. – Big attempt to monetize lessons of Wikipedia. Did Wikia learn right lessons? Face new challenges? • An example of so-called Web2.0. Illustrates numerous general themes: – Challenges building installed base. – Challenges monetizing user-generated content. – Choices b/w narrow/broad platforms – Lessons learned putting together all the pieces General history • October, 2004. Wales and Angela Beesley co-found for-profit Wikicities. Eventually change to Wikia. – Free hosting site for wikis, using AdWords. • March 2006 – $4 Million Series A financing – Additional participation • June 2006 Gil Penchina become CEO – December 2006 Amazon invests. Soon thereafter start the Search Wikia project. – March 2009, shutter the Search Wikia project. • August 2009. Case setting. How to continue growth? Steady Growth (Exhibit 7) Let’s examine Wikia • Look and feel familiar? – Navigation – Editing – What else? • Some guidance for users. – Big wikis – By category – What else? • Ads • Type • Location High traffic Wikia wikis • What is there? Let’s look… • Star Trek, Harry Potter, Muppets, 24, Doom, Transformers, Lost, Lord of the Rings, Smallville, The OC, Wookepidia (Star Wars), Linux wiki, unofficial mozilla community wiki… • Also music lyrics…. • “Wikipedia is the encyclopedia and Wikia is the rest of the library.” – Jimbo Wales – • Building an installed base. Opportunities and constraints? Narrow versus broad installed base • “In the perfect Web 2.0 story, you build a fairly generalized application that can be used for many purposes, and you try to do it without closing off the possibility of making it do other things later. Think of the difference between us and Yelp; we have a restaurant wiki, and it blows. Yelp has been so focused on building that vertical that they are the killer app in that space. Unfortunately, they’re so customized for that particular vertical that they’ll have a real problem expanding into any new verticals, and while their answer is that the Yellow Pages market is $20 billion, that’s a big enough win, that’s just not our approach. It’s easier to win when you’re focused, but the win tends to be smaller. Most of the winners are an inch wide and a mile deep, but most of the money is made on the billion dollar exits. Go big or go home—that was our philosophy.” – Gil Penchina – Why do users come to Wikia? • Likely user motivation? – – – – – To write/write as part of a community. To find answers to particular question. Search engine directed them there. To view ads and get leads for purchases. What else? • What can the site do to attract users? – Free hosting. – Easy to use software. – What else? When does a particular discussion within Wikia work for users? • Same community norms as Wikipedia? What differs? – – – – A shared belief in Linus’ law? Neutral point of view. NPOV? Verifiability? Not original research? • Same approach to encouraging good behavior? What differs? – Contributors committed to effort? – Wiki etiquette? – Consensus & monitoring? Is the whole of Wikia greater than sum of its parts? • Same virtuous cycles? What differs? – – – – More users more eyes more content more users? Personal satisfaction teamwork new projects? Reinforcing with Google? With Wikipedia? What else? • Does the management gain experience from managing one group and taking lessons to another? – How to design a site? – How to monitor a group? – What else? Can management make investment and take action to help? • Action • Benefits/risks? – Seeding topics by paying contributors – Fostering entertaining framework & let users choose topics – Managing participation to limit vandalism & disruption – Building new groups on existing groups – What else? Competition from alternatives or contributor of new users? • Alternatives? • Effective substitute or not? Why/why not? – Facebook & general community sites. – Specialized wikis (in how-to, in longdistance running, etc) – Firm-sponsored wikis (e.g., lego.com) – Wikipedia – What else? Winner-take-all? Or a fragmented supply? Different considerations. • Why doesn’t online wiki activity online just fragment into a wide series of specialty sites? – – – – – – – – Switching costs, network effects First mover advantages Setting de-facto standards Open-source culture Cooperation w/Wikipedia Finding a framework for participation? One group encourages another. What else? Lesson of Wikia search: Can’t build an installed base for just anything. • Began in late 2006 – More than 65K suggestions – Little traffic • Shuttered in March 2009 • What is the lesson? Summary: Wikia’s challenges building an installed base • As with Wikipedia, Wikia succeeds if site accommodates both insiders & tourists & virtuous cycle keeps growing. – This grows one group at a time. Does same framework apply to all? • Inherently difficult to get right. – Wikipedia positioned itself as an encyclopedia, then defined the norms for that effort, then extended the norms to other reference categories, such as quotes, dictionaries, news, science, etc. – Wikia positioned as location for community development of other topics, tried to borrow same norms, manage the developments, and extend to a wide variety of topics that do not fit in an encyclopedia. • Facing a narrow/broad issues. – Looking for economic links across groups. – Looking to gain share, not lose to fragmentation online. • Monetizing the user base through selling ads What kind of ads can a site sell with user generated content? • Pinchina: A platform must do three things. – A. Easy for users to create attractive hi quality content. – B. Content must be desirable others want to view it. – C. Content must be attractive to a demographic that advertisers will value. • Most sites do two, but have difficulty w/ all three. – – – – Facebook does A & B, but not C…users not there to buy. Shopzilla does A & C, but not B. Few want to view. YouTube does A, but sometimes not B & C. Wikia??? Has A & B, but what about C??? What type of advertising? • Type of ad • Costs/benefits – How platform must look? – Tailor verticals to ads? – E-Commerce site ad – General brand ads Narrow versus broad – how does it shape ad revenue? • All things to all people, generic frame, many applications. • Small specific niche application with limited growth outside niche. – Pro – Pro – Con – Con Narrow versus broad demographic reach of site • Which deserves more resources? – Healthcare – Sports – Gaming – “How to” category. – What else? • Benefit/risk of this demographic. Repeat users versus new users • Which deserves more resources? – Repeat contributor for one topic. – Repeat contributor for multiple topics. – Occasional contributor. – Who else? • Benefit/risk of this demographic. Mix of new and repeat users: More of the same, or change the profile? Demographic profile: more of the same or change the profile? Summary: selling ads. • Topic selection: manage or not? – Strategic choice letting users decide or trying to nudge it towards an lucrative ad base? • How compatible is Wikia with lucrative advertising? – Not all forms of advertising work with the activity on the site. Does the site have any choice? • Will one ad base help develop another? – Should investment target existing demographics or try to build new ones? Investment priorities: How to continue to growth? • Options • Benefits/risks? – Seeding new topics for underrepresented demographics – Growing size of existing groups more participants – Trying to find appealing ways to increase time online of users. – Let users choose topics and go with whatever they start. – What else? Managerial cool down Wikia’s challenges provides a window into online communities • Building installed base – Looking for a framework to mix the repeat visit with the occasional visit – Generate a whole greater than the sum of its part, competing against fragmentation. • Monetizing an installed base – Must be compatible with the user behavior on the site, and their motivation for returning. – Advertising is opportunity, but constrains how the pieces all fit together.