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Florida Trend Archives - SEPTEMBER 2005 ISSUE
Wiki Mania
A former options trader now living in St. Petersburg is the brain behind Wikipedia, a free internet encyclopedia that’s become a cult phenomenon. Can he expand the brand into a money-making enterprise?

By Cynthia Barnett

wikipedia logoOn an unseasonably cool summer evening in New York, Jimmy Wales is the guest of honor at a party of young bloggers, Google programmers, tech reporters from the New York Times and others who have come to meet him at a trendy Japanese barbecue restaurant in the East Village.

The New York trip was one of seven that Wales took in July as he traveled the world on behalf of his non-profit company, Wikipedia. The St. Petersburg-based dot-com is the largest encyclopedia in human history. It is housed not on a shelf in the Library of Congress, but on 106 computer servers worldwide, including 70 that blink in tall stacks in a downtown Tampa office building. The website is among the 100 most-visited on the internet, according to the web-traffic analysis firm Alexa. The firm reports that Wikipedia is the 58th-most-visited site globally, compared to a 69th-place ranking for About.com, the citizen-expert site acquired by the New York Times earlier this year for $410 million.

The Wiki World
Wikimedia Foundation
Founded in 2003 as a Florida-based non-profit corporation, Wikimedia is the parent organization for Wikipedia, founded in 2001, along with Wiktionary and Wikibooks.

Wikia Inc.
Founded in 2004 as a Florida-based for-profit corporation, Wikia manages Wikicities, a collection of more than 250 wiki communities, and Wikiasari, a search-engine project.

Source: Wikipedia

Wired magazine recently called Wales “a minor geek rock star” because so many tech conferences in the U.S. and Europe clamor for him as a speaker. Since May, he has visited Croatia, the Netherlands, Germany, Denmark, Spain, Chicago, San Francisco, New York, MIT in Boston and Oxford, England.

Wikipedia events attract a mixture of computer geeks, free-software enthusiasts and the earnest volunteers who write and edit the encyclopedia. Usually, a bearded professor shows up from some nearby university, keeping Wales, 39, from being the oldest guy in the room.

Tonight in New York, the bearded professor is Yochai Benkler. He teaches at Yale Law School and studies the economics of networks. In Wikipedia and companies like it, Benkler sees an entirely new organizational model — “commons-based peer production.”

Peer production systems call into question economists’ traditional views on productivity: While typical encyclopedias hire experts to write and edit articles in their fields, anyone can contribute to Wikipedia. In just four years, the free-form encyclopedia has attracted a cadre of thousands of mostly young, fiercely loyal volunteers — “Wikipedians” — who write and edit from all over the globe in 92 language editions. The Wikipedians organize themselves without markets or management. They find their own tasks; they make their own decisions. Nobody gets paid. They write and edit content, check facts, mediate disputes, man help desks and real-time chats, debate and implement company policy and otherwise self-organize around Wikipedia’s mission: Providing a free encyclopedia for all on the planet in their own languages.

The same sort of online collaboration fuels eBay’s feedback system, builds Amazon’s millions of customer product reviews and enables the massive file sharing over the internet that gives the music industry fits.

Wikipedia and other open-source computer projects also challenge traditional ideas about executive leadership. The most-cited example of an open-source chief executive, Linus Torvalds, built Linux into the No. 2 operating system in the world with the help of thousands of volunteer programmers who consider him their “benevolent dictator for life.”

“Unlike with corporations, governments or armies, these leaders have to be of a very particular sort,” says Benkler. Highly technical, for example, and willing to bow to the wisdom of the group. Atypical. Like Jimmy Wales, whom some Wikipedians call “The God-King.”

Global Force: Jimmy Wales gets star treatment from followers in other parts of the U.S. and around the world but is nearly invisible in Florida. “Like the great artists Jerry Lewis and David Hasselhoff,” he joked on his blog, “I’m only appreciated overseas.
GLOBAL FORCE: Jimmy Wales gets star treatment from followers in other parts of the U.S. and around the world but is nearly invisible in Florida. “Like the great artists Jerry Lewis and David Hasselhoff,” he joked on his blog, “I’m only appreciated overseas."
Jimmy Donal "Jimbo" Wales
Born: 1966, Huntsville, Ala.

Home: St. Petersburg

Family: Wife, Christine, and daughter, Kira, 4

Business: Founder and president of Wikimedia, a Florida non-profit corporation whose primary product is Wikipedia; founder of Wikia, a Florida for-profit corporation whose primary product is Wikicities

Fellow: The Berkman Center for Internet and Society, Harvard Law School

Favorite apps

  • Internet browser: Firefox

  • E-mail client: Thunderbird

  • Internet relay chat: X-Chat Aqua

Home economics: Wales is a big fan of the book “Your Money or Your Life.” The millionaire former options trader drives a Hyundai and books his own discount flight tickets online.

Sweet home, Alabama
In 1970, Doris Wales, a math teacher in Huntsville, Ala., had a problem familiar to many parents of bright children. By the time he was 4, her oldest son was reading but still too young to start public school. So she and her mother, also a teacher, started a private school in a historic home on the outskirts of Huntsville. They called it the House of Learning.

Wales traces his passion for books, and encyclopedias in particular, to the house where he was schooled for nine years. It was white with black shutters. The inside was painted Aztec Gold. He knows the color well because he, his two sisters and his brother had to repaint it every summer.

Wales’ dad, a grocer, graced his son with optimism and a sense of humor. Jimmy Wales also taught his namesake to handle a .22-caliber rifle and a shotgun. To this day, Wales is a firearms enthusiast who is as passionate about the Second Amendment as he is about free software.

family photos

From the House of Learning, Wales entered Huntsville’s Randolph prep school, graduating at 16. He earned bachelor’s and master’s degrees in finance from Auburn and the University of Alabama, then headed to Indiana for a doctorate. In Bloomington, he finished all his course work and co-published a journal article, “The Pricing of Index Options When the Underlying Assets All Follow a Lognormal Diffusion.” Wales then dropped out of the Ph.D. program to become an options trader. During six years with a small firm in Chicago, he met his future wife, Christine, a Tokyo-born steel trader for Mitsubishi. He made enough money trading options and futures that he and Christine would never have to work again.

Wales acknowledges an early addiction to the internet; in college, he was obsessed with the virtual-reality game Multi-User Dungeons. But his decision to become an internet entrepreneur came gradually. Like many dot-com fantasies, his was sparked by Netscape’s eye-popping IPO in the summer of 1995. Wales began investing in internet companies, and in 1996 started one of his own, a search portal called Bomis. Bomis sells advertising and original content, including erotic images on the “Bomis Babe Report.” Wales says the company never made money and that he’s no longer involved in it. Bomis’ CEO, Tim Shell, is one of five members of the Wikimedia board of trustees that controls Wikipedia.

Free software
The more Wales learned about the business of the internet, the more enamored he became with free software such as Apache and with the ideology that software should be free to be copied, improved and adapted by all users. He moved from Chicago to San Diego in 1998 and became obsessed with creating a free encyclopedia, written by volunteers collaboratively on the internet. An initial version, called Nupedia, bombed. After 18 months and $250,000, it had only a dozen articles.

Then, Wales heard about “wiki” technology — software that enables all users to add, delete and edit content on a website. Wales set up Wikipedia as a way to generate more content for Nupedia. But Wikipedia’s popularity soon made it the dominant project. Within a month of launching in January 2001, Wikipedia had 200 articles. Four years later, it had more than a million articles. The English version is the largest, with more than 600,000 articles, compared with Britannica’s 65,000 and Encarta’s 68,000.

Wiki Warning
Contributors to Wikipedia are not experts or professional editors. Anyone can edit an entry. Sometimes information is disputed and notices, such as the one below, are posted on the site.
Wiki Warning: Contributors to Wikipedia are not experts or professional editors. Anyone can edit an entry. Sometimes information is disputed and notices, such as the one below, are posted on the site.

Wales estimates he spent $500,000 in Wikipedia’s first three years to get it up and running. For the past two years, the project’s annual budget of $500,000 has been funded fully with donations and grants, most of them small. (Advertising is strictly forbidden on the site.) Earlier this year, a fundraising drive set a goal of raising $75,000 in three weeks. It raised $95,000 in two — almost all in small donations between $50 and $100.

Recently, the donations have gotten larger. This summer, Netscape co-founder Marc Andreessen gave the company a $50,000 grant. Yahoo! Search donated hundreds of thousands of dollars’ worth of servers, hosting and bandwidth to help Wikipedia increase its capacity. The Yahoo! donation wasn’t purely philanthropic. The partnership between Yahoo! and Wikipedia allows the search engine to automatically display Wikipedia content on special “shortcut” tabs on its search results page, which both companies expect will increase their traffic.

‘Huge impact’
Wikipedia stands apart from blogs, internet forums and other interactive websites in several important ways. Most are vehicles for individual opinion and expression. The blogger writes, and her readers post their responses. Wikipedia, by contrast, establishes a collective mission — the free encyclopedia — and asks all interested to participate in its creation and evolution. Most significant, any writer can change what any other has written.

Devotee: Wikipedia allows volunteer Florence Devouard — who spends at least three hours a day on the site — to work on ‘something which really matters... which will not depend on our look, gender, diploma.’
DEVOTEE: Wikipedia allows volunteer Florence Devouard — who spends at least three hours a day on the site — to work on ‘something which really matters... which will not depend on our look, gender, diploma.’
Wikipedia’s growth is due chiefly to its ability to engage volunteers in the collaborative process. Some 20,000 people a month edit Wikipedia, with about 3,000 doing the majority of the tasks. Florence Devouard, 36, an agricultural engineer in south-central France, first visited the Wikipedia site one night in February 2002 after tucking her two children into bed. Exhilarated by the possibilities of both contributing and consuming information, she edited at first in fields she knew well — agriculture, ecology and the environment. Soon, she began writing and editing on all sorts of topics, in both her native French and in the English edition of Wikipedia, “to help American people understand things that are usually not explained in the U.S. media,” with postings on issues such as Muslims in France and the European perspective on genetically modified foods.

Today, Devouard estimates she spends three to four hours each weekday volunteering for Wikipedia. Weekends, she spends even more time. And “much to my husband’s despair,” she says, “I also use part of my holidays to go to meetings or do presentations of Wikipedia.”

Why would someone like Devouard devote so much time to Wikipedia? Wales is tired of the question. “One of the main reasons people work for Wikipedia is because it’s fun,” he says. “When people spend hours playing softball on weekends, no one questions it. No one tells them to get a life.”

Devouard’s answer is more telling. She likes interacting with people from all over the world. She says she has grown closer to fellow Wikipedians and sometimes trusts them more than people in her own workplace. Finally, helping to create an information source like Wikipedia makes her feel she is taking part in “something which really matters,” she says, and “that we can have a huge impact, which will not depend on our look, gender, diploma.”

‘Public restroom?’
Some critics of Wikipedia see weakness in those traits rather than strength. In an essay called “The Faith-Based Encyclopedia,” former Britannica Editor in Chief Robert McHenry compared Wikipedia to a public restroom: “It may be obviously dirty, so that (a visitor) knows to exercise great care, or it may seem fairly clean, so that he may be lulled into a false sense of security. What he certainly does not know is who has used the facilities before him.”

Indeed, Wikipedia’s contributors aren’t experts or professional editors, and anyone who spends time digging into the site can find inaccuracies. “Some articles have only recently been started; some have never received the attention of anything like an expert; some (fewer) have been degraded from superior earlier versions,” says Larry Sanger, who worked for Wales as the editor of Nupedia and “chief organizer” of Wikipedia and now works for another internet company in California.

Case Study: Yale law professor Yochai Benkler, who studies the economics of networks, says operations like Wikipedia present a whole new organizational model, one based on “commons-based peer production.”
CASE STUDY: Yale law professor Yochai Benkler, who studies the economics of networks, says operations like Wikipedia present a whole new organizational model, one based on “commons-based peer production.”
Perhaps more important, Wikipedia is vulnerable to “trolls,” as volunteers call troublemakers who routinely make mischief on the site. One troll recently embedded “The Holocaust never happened” into the middle of Wikipedia’s extensive Holocaust entry. Another stuck a hammer and sickle over Wales’ picture and added “Wikipedia is Communism!”

In addition, the Wiki community’s insistence on consensus over credentials means Wikipedia lacks the most cutting-edge research in any field — the site has a strict rule against “original research” to protect from crackpots. Meanwhile, the unfailing adherence to a “neutral point of view” makes some of the copy downright boring.

Undaunted, Wales and his volunteers insist that Wikipedia can be more accurate than a printed encyclopedia on the shelf because it contains up-to-the-minute information. When Wikipedia’s accuracy disclaimer drew a blast from an editorial in the New York Times, Wales wrote the author a humorous e-mail that included similar disclaimers published by Encyclopedia Britannica and the Times itself. Wales says the open structure will ultimately lead to a better product than any other online as more and more users constantly improve upon it.

As for “trolls,” the volunteers monitor all edits on the site’s “recent changes” pages: The Holocaust vandalism was fixed three minutes after it was posted; the Wales vandalism three seconds after. Wales also announced a plan that could lead to freezing some contents to prevent vandalism. Occasional headaches are worth the value of an open community, Wales says. He says most web developers are victims of their own “a priori thinking,” anticipating problems instead of potential. “To me, that’s like opening a steakhouse and saying, ‘Wait. What if people want to stab each other with their steak knives?’ What does that do to your civil society? What does that do to your community?”

Next, profits?
On the road, Wikipedia’s “God-King” wears the uniform of internet entrepreneur: Steve Jobs-style black crew neck with a brown tweed jacket that matches his reddish-brown hair and close-clipped beard. At his home base in St. Petersburg, he’s considerably more casual: On a recent sunny day, he showed up at Wikipedia’s downtown offices in shorts and a wrinkled white cotton shirt. The company’s digs were strewn with boxes, papers, computer screens, servers and other random hardware. A couple of printers were stacked on the floor, a fan was lying on its side. Linux journals were piled up everywhere.

Frankfurt Fest: Wiki supporters attend the first international Wikimedia Conference in Frankfurt, Germany, in August.
FRANKFURT FEST: Wiki supporters attend the first international Wikimedia Conference in Frankfurt, Germany, in August.
Wales, Christine and daughter Kira have lived in St. Petersburg since 2002. Wales says he and Christine chose St. Pete for the same reasons you’d hear from a couple million other Floridians: The weather. The water. A nearby international airport. And the price: “I’d say our St. Pete house cost about a third of what it would have in California,” he says.

For all his notoriety in global tech circles, Wales is all but invisible in Florida. Due to lack of interest, an organizer once had to cancel an event in St. Petersburg where Wales was to speak. “Like the great artists Jerry Lewis and David Hasselhoff,” Wales joked on his blog, “I’m only appreciated overseas.”

As he continues to travel promoting Wikipedia, Wales is spending less time on the day-to-day workings of the project. Devouard, who has worked her way up to vice president of Wikimedia, says the site has become “a sort of virus and is self-replicating … in this sense, (Wales) is not much necessary anymore.” Wales does not disagree and disavows his God-King moniker. “I’m more like the Queen of England — my power is decreasing over time,” he demurs. “Soon, I’ll just wave at parades.”

Wales will remain much more than a figurehead, however. For one, he has chosen Wikimedia’s board of trustees carefully enough that he is not likely to lose control: Among five directors are Wales and two business partners who are friends from his trader days.

Wales needs the Wikipedia brand, and his geek-rock-star status, to parlay Wikipedia’s popularity into a new, for-profit website he’s now operating through a closely held Florida company called Wikia Inc.

Fundraiser: Joichi Ito, an internet leader in Japan, helped Wales raise $1 million for the new for-profit Wikicities.
FUNDRAISER: Joichi Ito, an internet leader in Japan, helped Wales raise $1 million for the new for-profit Wikicities.
The site, called Wikicities, lets users create “wikis” — sites edited collaboratively — around specific topics of interest. On Wikipedia, users can’t just go and make a page about their hobby, their company or themselves. On Wikicities, they can — for free. And in contrast to Wikipedia, where content is supposed to reflect a rigorously neutral point of view, the Wikicities sites are free to reflect the perspectives of their organizers and participants.

The biggest project on Wikicities so far is called Memory Alpha, “a collaborative project to create the most definitive, accurate and accessible encyclopedia and reference for everything related to ‘Star Trek.’ ” Dedicated Trekkies who used to blog or chat on hundreds of different websites now are building one together.

Wikicities makes its money from small Google ads that appear on the right side of all Wikicities sites — in the case of Memory Alpha, it’s Darth Vader costumes for sale on eBay, “Star Trek” ornaments for sale at happydayscollectibles.com.

Why won’t Trekkies or others just band together outside the Wiki umbrella? For one, the sophisticated, high-quality Wiki software provides them with the bandwidth and editing platform they need to have the kind of collaborative effort they want.

In addition, Wikipedia has become a powerful, attractive brand, says Joichi Ito, an internet leader in Japan and the CEO of the venture capital firm Neoteny. Ito, who has helped Wales raise an initial $1 million for Wikicities, believes Wales has created enough consumer loyalty to make a for-profit Wiki model work. “Jimmy and Wikipedia are THE Wiki brand."

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