Wikipedia Founder to Give Away Web Hosting

eldavojohn writes "Wikipedia founder Jimmy Wales is going to be giving away free web hosting from his company's site Wikia. The company announced this 'free culture' movement at the current Le Web 3 conference in Paris. They somehow received a $4 million dollar investment package from Bessemer Venture Partners, Omidyar Network and individual investors with no business model. Is this a dotcom bubble style mistake or just proof of Jimmy Wales' golden touch?" From the article: "Openserving will go further than Wikia's current services, by giving away hosting services and bandwidth, in addition to allowing site creators to keep the advertising revenue generated by the site. 'If we give away the bandwidth and the storage, and we get none of the advertising revenue, what's the business model? Well, I don't know yet,' Penchina said. The software acquired with ArmchairGM will let Openserving customers create collaborative publishing sites, combining elements of blogs and wikis."

Comments

Business Model?

[space tyrant xenu]

Buyer beware is all I can say about investing in a project that doesn't have a clear direction for recouping the initial investment. They have an idea of what they want to do, and it seems like a worthy idea to me, but I'm not sure why companies would want to invest in a project where there's uncertainty like this in getting a return. It seems like this would be a better idea for individuals to support, like a foundation, rather than as a business venture.

This sounds

[JustNiz]

like its a gift to net-abusers like spammers, child porners, etc.
I hope they make sure that they get good ID of everyone who hosts stuff on their service and don't have some loophole where people can set up accounts with anonymous/fake ID.

Question

[wile_e_wonka]

How is this different than, like, Blogspot or googlepages? And how does the 100% ad revenue thing work if you use Adsense?

Re:Question

[DragonWriter]

How is this different than, like, Blogspot or googlepages?

The details of its features advertised by openserving.com are different than either of those; its seems to me broadly similar to blogspot, though.

Loads of Problems

[WebHostingGuy]

I admit I am biased since I an in this industry but are they smoking something?

The only places which have offered free hosting have relied on ad revenue to make back the costs. What do they think is going to happen when the warez people hit the site? There goes the bandwidth, the storage and here come the problems. And what about the spammers who will flock to the free site to run the smtp mailers? They are going to spend so much time on fighting off this sort of crap from the legitimate people they won't have time for anything else. And apparently they are going to do this for free?

Only for free content...

[Per Abrahamsen]

They only host wikis for free if the content of the wiki is also under a free license.

An obvious business plan would be to charge people who want to use the Wikia for hosting non-free content. This has parallels in the free software world, where Troll Tech give away Qt for use by free software, but charge people who want to use Qt for non-free software. Cygnus did the same with Cygwin, and Alladin probably pioneered the business model with GhostScript.

The free wikis will in this scenario work as a combined advertisement and proof-of-concept for the paying customers.

Re:WTF are the VCs thinking?

[TrueKonrads]

I think VCs think along the lines: "4 mil is peanuts, and if this guy can make wikipedia - something every other schoolkid uses for homework, he probably can stumble upon something that can be monetized. So, we know that it is high risk, but it could be high profit too."
Anyway, for some vc's 4 mil is what their Yacht costs in maintenance ( year) .

Wales is no fool

[vtcodger]

Based on his record, Jimmy Wales is no fool and I imagine that he has some plan in mind to eventually make money for his investors. His concept, whatever it may be may, or may not, be nefarious. It might be something as simple as someday tying optional money making ventures to a major, largely free of charge website. Which means creating the web site first.

In point of fact, Wales has done us -- all of us -- a major favor with the Wikipedia. He didn't have to. I'm inclined to cut Wales some slack on this. Let's see what the man is up to before we condemn him.