Written by: White and Misty, Geek web3
When it comes to public goods in the Internet era, Wikipedia may be the most representative case. This well-known online encyclopedia, co-founded by Jimmy Wales and Larry Sanger in 2001, aims to provide a freely accessible knowledge platform through the Internet, allowing everyone to freely access the knowledge of all mankind.
To this day, Wikipedia has indisputably achieved this goal by relying on the open editing mode of ‘user-uploaded content’, allowing anyone to contribute content online, enabling Wikipedia to gather the ‘think tanks’ from around the world.
As of now, this platform has over 300 languages of entry content, with more than 62 million entries included. The number of editing actions each month exceeds 14 million, and the amount of data for the English version of the wiki alone has exceeded 20TB. Monthly visits reach more than 6 billion, making it one of the top 10 most popular websites in the world. With these data, Wikipedia is undoubtedly the benchmark for Web2 knowledge base.
And in the rapid development of AI, the value of Wikipedia is difficult to estimate. Computer scientist Jesse Dodge once said that Wikipedia is the largest single source of information for the underlying language model of ChatGPT, and its content may account for 3%~5% of the data captured by LLM. Simon Fraser University instructor Nicholas Vincent even said, ‘Without Wikipedia, generative artificial intelligence would cease to exist.’
What is most amazing is that Wikipedia, which is so large in scale and operates so successfully, is not a commercial private institution, not even the ‘largest ad-free website in the world’. This sounds quite unbelievable, because most internet platforms of similar size rely on advertising revenue or burning money to sustain their livelihoods. For non-commercial Web2 public goods that are difficult to monetize and have generally short lifecycles, it is almost impossible to operate and maintain such a large scale through a non-commercial model.
**Wikimedia Foundation CEO Katherine Maher even said in 2021: ‘If Wikipedia was not founded in the early 21st century, it would simply not have been born in today’s fragmented, commercialized Internet world.’
What is the secret of the non-profit-oriented Wikipedia’s influence? With a research interest in public goods, we conducted a simple survey of Wikipedia. Due to its strong enlightening significance for operators of public goods, especially content output platforms, we recommend everyone to read this article. Below, we will elaborate on Wikipedia’s content production model, cash flow sources and expenditure allocation, as well as controversies in terms of power and finance.
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UGC: A Revolutionary Content Generation Model
To improve the efficiency of content creation, Larry Sanger, the founder of Nupedia, proposed a new idea and developed a knowledge network system called ‘Wiki’. This system allows users to freely upload content, and anyone can participate in editing entries, which later became Wikipedia.
From a product perspective, wiki is a knowledge network system. The cost for users to create, modify, and publish wiki text is much smaller than HTML text on the basis of the web. At the same time, the wiki system supports community-oriented collaborative writing, providing simple tools for community communication, which helps to share knowledge in a certain field.
In The World is Flat, the author directly refers to the above pattern as ‘community-uploaded content’, while in more literature, the content editing model introduced by Larry Sang is called UGC (User-Generated Content), which often lacks tangible material incentives and is driven more by interest.
UGC quickly broke the traditional form of encyclopedias dominated by experts and publishers. It can flexibly include hot events that are not academic but have a certain level of attention, and therefore quickly captures the minds of users. This bottom-up ‘crowdsourcing’ model allows Wikipedia’s information to quickly extend to all aspects. After its launch in January 2001, Wikipedia quickly surpassed Nupedia, which was shut down in 2003, and the Encyclopedia Britannica also announced the cessation of print publication in 2012 under the impact of Wikipedia.
Currently, there are still millions of volunteers worldwide who participate in editing and maintaining content on the Wikipedia platform. There are approximately 120,000 active editors (who participate in editing at least once a month), and there are about 300 editing events that occur on the website every minute.
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Although UGC has created conditions for the rise of Wikipedia, its side effects are equally obvious. In an open and free editing mode, how to ensure the accuracy of the content is an unavoidable pain point. Wikipedia has experienced countless incidents of entry fabrication or destructive editing, the most common of which include inserting false information, advertising copy, or politically biased content, the most famous of which is the “John Seigenthaler entry fabrication incident.” Dealing with these destructive behaviors is actually a very difficult and difficult task to eradicate.
The current solution of Wikipedia is to provide the function of rolling back the content of entries to previous versions. There is a revision history for each entry, and anyone who finds that an entry has been maliciously changed can roll it back to a previous version.
According to data statistics, obvious malicious editing behaviors can be easily detected and removed. According to experimental detection, such correction behaviors can be triggered on average within a few minutes. Now Wikipedia has widely used BOT to correct simple written errors or vulgar content, but destructive behaviors that are difficult to detect quickly still require manual intervention.
For issues that require human intervention to solve, Wikipedia has developed a three-tier security system to implement in a way that is as Decentralization as possible. When malicious editing occurs, the most common way to deal with it is to ‘modify, revert, discuss.’ After user A makes edits to a certain entry, if user B has doubts, they can revert it to the old version and then explain their differences on the discussion page, seeking Consensus.
Sometimes, the disputing parties are prone to getting stuck in a stalemate, with a cycle of “edit, revert, edit, revert”. This is when higher-level roles, commonly known as administrators and inspectors, need to intervene.
Administrators have higher privileges, such as deleting entries, protecting pages, preventing edit conflicts, and handling complaints, while patrollers primarily review and mark recently published content. They can mark problematic content as ‘pending review’ and report to administrators or higher-level volunteers.
In addition, administrators can set entries that are easily maliciously modified (such as entries for public figures) to a partially or fully protected state, restricting editing permissions and maintaining the stability of the entry. Administrators also have the right to ban users who maliciously edit entries.
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For more complex cases, Wikipedia also has an arbitration committee composed of senior volunteers as a final resort for resolution. Committee members are experienced volunteers and their decisions are based on Wikipedia’s editing guidelines and community norms, ensuring content adheres to neutral and verifiable standards.
In terms of the Open Source content licensing protocol, Wikipedia has adopted several Creative Commons licensing protocols, the most important of which is the CC BY-SA 4.0 protocol, which allows users to freely share or adapt content, but must meet two conditions:
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The original author’s name, work source, and link must be clearly indicated.
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If the work is adapted, the adapted work must also be published under the CC BY-SA 4.0 protocol, making it easier for more users to create derivative works. In addition to CC BY-SA 4.0, some earlier content and images are still covered by the GNU Free Documentation License (GFDL) protocol.
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Cash Flow Analysis: Can the Tower of Babel be Sustained Solely by Donations?
Source of Cash Flow
For large-scale internet platforms with a large number of users, how to obtain stable cash flow is the most troublesome issue. It is almost impossible for Wikipedia, which is focused on non-commercialization, free reading, and value neutrality, to monetize through advertising or membership systems like commercialized platforms such as Twitter and YouTube. In addition, Wikipedia lacks strong subsidies from private institutions, so how it maintains its operation by obtaining cash flow is a question that many people are curious about.
We can take Baidu Baike as a comparison. Taking the entry of ‘health insurance’ as an example, it is easy to find that Baidu Baike heavily relies on advertising revenue. This commercial monetization method often brings biased or false information. For example, the Wei Zexi incident in 2016 was a victim of this model, which ultimately prompted the Cyberspace Administration and other departments to order relevant internet platforms to drop the proportion of commercial promotion.
If we measure the Wei Zexi incident based on Vitalik’s ‘income-evil curve’, it can be regarded as a typical case of negative externality caused by the excessive monetization of public goods. In contrast, Wikipedia’s non-commercial policy makes it more neutral and allows for the preservation of more positive externalities. But can this model really be sustainable?
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Comparison Table of Wikipedia and Other ‘Encyclopedia-type’ Products
Regarding the sustainability issue of Wikipedia, it is necessary to trace back to its sponsoring organization - the Wikimedia Foundation. The foundation was established in 2003 and is headquartered in San Francisco, with a current staff size of over 500 people. Its funding mainly comes from donations and grants. According to its publicly disclosed materials, the Wikimedia Foundation’s sources of income include the following aspects:
First is user donations. Every year, the Wikimedia Foundation launches fundraising campaigns to appeal to global users for donations to support platform operations. Most of these donations are small in amount but come in large numbers, making up a significant portion of the Foundation’s income. When most users browse Wikipedia, a banner pops up on the screen twice a year, asking users to donate to sustain platform operations.
According to the Wikimedia Foundation’s data for the 2022-2023 fiscal year, the total revenue of the foundation reached 180 million US dollars, with small donations from users accounting for over 90% of the funding. On average, each donor contributes about 11 US dollars, with approximately 7.5 million people worldwide supporting Wikipedia in this way.
In addition to individual donations, the Wikimedia Foundation also accepts funding from some large corporations and foundations, such as Google, Microsoft, and the Gates Foundation. Google and the Alfred P. Sloan Foundation alone have each donated over 3 million US dollars to Wikipedia.
In addition, the Wikimedia Foundation actively applies for grants for public welfare projects. A typical example is ‘Reading Wikipedia in the Classroom’, which aims to help teachers and students around the world better use Wikipedia for teaching. It was initially piloted in Nigeria, Bolivia, and the Philippines, and has now expanded to more than 40 countries, helping people in the region to effectively use Wikipedia in the classroom. Through this project, the Wikimedia Foundation has successfully received longer sponsorship.
For sustainable development, the Wikimedia Foundation is also actively exploring autonomous economic sources in addition to donations. In October 2021, the foundation launched the ‘Wikimedia Enterprise’ service, mainly targeting large tech companies such as Google and Amazon to provide specialized paid APIs, which brought additional revenue to the foundation. In the 2022-2023 fiscal year, Wikimedia Enterprise generated millions of dollars in revenue, with Google alone paying over $2 million to Wikipedia. The paid API business is expected to be an important driving force for the future rise in Wikipedia’s revenue.
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The Foundation also operates a Wikimedia online store (store.wikimedia.org) that sells merch products with the Wikipedia logo, such as T-shirts, mugs, and stickers. Although this part of the revenue is relatively small, it is also one of the Foundation’s supplementary sources of income, bringing in several hundred thousand dollars in additional revenue each year.
In addition to the stable sources of funds mentioned by the official, we can also see from the balance sheet that the Wikimedia Foundation will participate in some investment activities. In 2023, the Wikimedia Foundation’s investment profit was about 6.5 million US dollars, but its investment activities resulted in a loss of more than 11 million US dollars in 2022.
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Expense Allocation
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The Wikimedia Foundation has detailed budget planning and financial audits for all fund uses, with multiple approvals for major expenditures to ensure reasonableness and transparency as much as possible. The Wikimedia Foundation’s financial reports are also regularly made public to let donors and the public understand the specific use of funds.
According to the Wikimedia Foundation’s financial statements, we can see the specific expenditure situation. In the 2022 fiscal year alone, its expenditure reached 169 million U.S. dollars, of which staff salaries and benefits accounted for 60% of the expenditure. This fund is mainly used to pay the wages and related benefits of the technical team and community personnel, covering expenses for server maintenance, software updates, data security, and other work.
As the world’s largest online encyclopedia, Wikipedia needs to deal with massive data and traffic, and simply maintaining and upgrading technical resources such as servers and data centers is a huge expense. As of 2024, Wikipedia has built six data centers around the world, distributed in the United States, the Netherlands, France, and Singapore, to ensure the stable operation of Wikipedia and other Wikimedia projects.
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At the same time, Wikipedia relies on the support of a global community of volunteers. The Wikimedia Foundation provides various awards and funding activities worldwide to promote community development, accounting for approximately 14% of its expenditures. For example, the Wikimedia Foundation has organized ‘edit-a-thons’ in some regions to encourage volunteers to focus on editing specific topics, expanding the breadth and depth of content. Typical examples include the ‘Fashion Edit-a-thons’ held in multiple countries, with a focus on France, as well as the ‘Wiki4Climate’ event in 2020, which centered around climate subjects.
In addition, the Wikimedia Foundation has also invested a large amount of resources in professional services, including legal consulting, external technical support, and accounting auditing, to ensure the compliance and operational security of Wikipedia globally.
At the same time, the management fee of the foundation also covers office space rental and daily management expenses to maintain internal operations, and regularly holds technical seminars and international editorial meetings to promote cooperation and communication within the global volunteer community, which also requires financial support.
The above two parts together account for 15% of the total expenditure. In addition, the Wikimedia Foundation’s expenditure on fundraising activities initiated in society through advertising and payment channels accounts for 4% of the total expenditure.
Wikipedia’s Challenge: Fraud, Corruption, and Political Correctness
The sustainable development of any public good is an issue that cannot be ignored. It is undeniable that Wikipedia has done well in this regard in the past, but there are still risks and challenges. First, the operation funding of Wikipedia mainly relies on user donations. Although this model sustains the development of the platform, its non-autonomous economic source still has strong instability. Under the impact of large language models, users’ willingness to donate to Wikipedia is more easily influenced.
Secondly, as a non-profit organization, if the foundation tries to increase revenue through paid APIs and other typical commercial means, it may also provoke controversy over the platform’s nature and neutrality. In this regard, Wikipedia’s instability in terms of economic sources and neutrality has become a chronic problem, which leads to a question that cannot be ignored.
As the saying goes, ‘a tall tree attracts the wind’. With only donations, Wikipedia has obtained such a huge source of income, which has caused dissatisfaction from the outside world. The destination of its funds is controversial, and rumors of ‘overfunding’ and ‘fraudulent donations’ have never ceased. On the one hand, Wikipedia’s fundraising campaigns sometimes exaggerate the urgency of its financial needs, and even give the impression that Wikipedia is ‘about to go bankrupt’, leading to misunderstandings about the platform’s financial situation.
On the other hand, some insiders have provided specific data indicating that Wikipedia’s operation does not require so much funding, and there is a strong suspicion of ‘filling one’s pockets with public funds’.
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Kolbe, the former co-editor-in-chief of the Wikimedia Community Newspaper, said that he is very familiar with the internal operations of Wikipedia. The donation fund launched by the Wikimedia Foundation in 2016 was originally planned to raise 100 million within 10 years. However, recently, there has been a significant increase in fundraising activities and fundraising advertisements, and the fundraising scale can be several times larger than this at least 5 years ahead of schedule. In contrast, Wikipedia only needs 10 million US dollars to operate normally each year.
A Brazilian editor, Felipe da Fonseca, also previously said, “It is so ugly and unethical to ask for money using someone else’s work.”
Wikipedia’s co-founder Jimmy Wales has also frequently faced accusations from the community, many people believe that the cost-effectiveness of the Wikimedia Foundation is dismal, with the foundation spending millions of dollars over the years on software development without producing anything effective. Wales admitted in 2014 that he was frustrated by the endless controversies, accusing him of persisting in wasting funds on developing software of no actual value without sufficient community consultation, and failing to make appropriate incremental promotions to rectify mistakes.
In February 2017, The Signpost published a column titled ‘Wikipedia has cancer’, criticizing the Wikimedia Foundation for increasing annual spending without achieving corresponding results.
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Musk is also a staunch Wikipedia critic. **In 2023, Musk’s renaming of Twitter to “X” caused a lot of discussion, at which time Musk posted a joke: If Wikipedia changes its name “Wikipedia” to “Dickipedia” for a year, he will immediately donate $1 billion to the Wikimedia Foundation to express his dissatisfaction with Wikipedia’s appeal for donations and over-fundraising rumors. Later, Musk also released “Wikipedia is broken”, “Wikipedia is losing its objectivity” and other remarks, which are not listed in this article.
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Musk’s remarks may contain some political factors (many entries in Wikipedia have obvious anti-Trump tendencies), we will not discuss the relevant issues, but this does represent the negative attitude of many celebrities towards Wikipedia.
Facing such rumors, the Wikimedia Foundation explained that the funds raised are not only used for daily operations, but also ensure that Wikipedia has enough reserves to deal with potential crises under the premise of no advertisements, free reading, and free from commercial interests. This fund management strategy can enhance its fault tolerance and help Wikipedia maintain its independence and stability as a non-profit public good.
In addition to the above issues, Wikipedia’s development also has various problems.
First of all, as an open-editing platform, Wikipedia’s content relies on global volunteers to create and maintain. Although this model encourages extensive participation, it also brings about misleading, inaccurate, and even malicious modifications. Although the platform has strict editing rules and review mechanisms, how to ensure the reliability and neutrality of content in the AI era, and promptly correct errors, will be a challenge that cannot be ignored in its development process.
At the same time, through some third-party data, we can find that although the number of users on Wikipedia has been increasing year by year, the number of active editors on the platform has been significantly reduced in recent years. There are two main reasons for this phenomenon:
- The review mechanism of Wikipedia is becoming increasingly strict, and the enthusiasm of new editors is being discouraged.
- The administrator’s authority is increasing, and they can block the account and IP address of some editors, which is a phenomenon of abuse of power.
In addition, the management team is not a unified group, especially the Wikipedia community and the Wikimedia Foundation have many differences, which have been brought up and even involved issues of corruption and abuse of power within the management team.
In 2014, the Wikimedia Foundation attempted to install new software on the German version of Wikipedia that could view multimedia content, but the German editors of Wikipedia refused to update the user interface, leading to a deadlock. In the end, the Wikimedia Foundation forcibly installed the new software and set high-level permissions to prevent editors from rolling back to the old version.
On September 13, 2021, the Wikimedia Foundation launched an action against Chinese Wikipedia, resulting in the ban of 7 users and the removal of the permissions of 12 administrators. Three of the banned users were among the top ten most active on the Chinese Wikipedia. As the Wikimedia Foundation did not provide systematic and detailed evidence or explanation afterwards, the incident was considered by the Mainland Chinese Wikipedia community and Chinese media to be suspected of excessive interference in community autonomy and suppression of those holding opposing Western ideologies, and lacking procedural justice.
In addition, in terms of resource allocation, such as the allocation of funds between different language versions, the cost setting for developing software and maintaining infrastructure, and the investment in different regions, the Wikipedia community and the Foundation have actually been vying for dominance.
Wikipedia, as a public good, relies on public trust to sustain its operation through donations, which in turn depends on the authority and comprehensiveness of its content, as well as the decentralized power distribution between the community and the foundation. The aforementioned infighting, which is public, is detrimental to public trust. Furthermore, the impact of AI and other large language models may lead to an irreversible decline in the quality of Wikipedia entries and the size of its user base, causing a further downgrade in its public trust.
At the same time, Wikipedia also faces a lack of diversity among volunteers. For example, content about women, ethnic minorities, and non-English-speaking cultures is often overlooked. How to attract more volunteers and encourage participation from people of different backgrounds and regions is another key to the platform’s future development.
Summary
The success of Wikipedia lies not only in its outstanding achievements as a knowledge sharing platform, but also in providing valuable insights for the sustainable development of public goods. As the world’s largest open encyclopedia, Wikipedia does not pursue commercial profit and strives to maintain content neutrality, successfully addressing the challenges of the internet era. This has profound implications for the management of other public goods.
The history of Wikipedia shows that only through stable economic sources, efficient use of funds, transparent financial management, and community participation in Depth, can public goods move steadily in long-term development. At the same time, we also need to see that the operation of Wikipedia, whether from a financial, organizational, or public opinion perspective, is not perfect and has significant problems that are difficult to ignore. Lessons from the past serve as a teacher for the future, and these issues undoubtedly serve as a strong warning for the builders of other public goods.
In the future, the sustainable development of public goods will face more complex environmental changes, including the distraction of user attention and the steep increase in operating costs caused by fragmented self-media impact, as well as the adjustment of laws and regulations worldwide, and the continuous evolution of user needs. This means that public goods not only need to continue to attract user participation, but also need to actively explore more sources of revenue to open up a robust and sustainable development path.
