Wiki CEO talks about lunacy and lack of profits

Gil Penchina, CEO of Wikia Inc., showed up for a recent interview in a brown T-shirt that said “Wikia” in yellow letters on the front, and “Lunatic” on the back.

“We have a monopoly on lunacy,” he said, when asked about the shirt.

While Google Inc. works hard to nurture its image as a whacky, non-corporate company, Wikia seems to manage it quite effortlessly. Started by Wikipedia cofounder Jimmy Wales, the company is not making much money yet, and its executives seem barely interested in doing so. But they do like to work. The company began life building Web sites using its wiki collaboration software where users can discuss their passions, vent opinions and share experiences. So far there are 3,000 sites and around 80,000 Web pages, supported by the 38 people at Wikia.

Somehow that wasn’t enough, so the company decided to build a search engine, too. And when they’re done with it, they plan to put all the software, algorithms and a constantly-updated index of the Web on the Internet, for use by anyone. For free.

Penchina even showed this reporter an e-mail to a potential investor which started: “To be honest, you’d have to be crazy to invest in us …” It’s not exactly a pitch that most venture capitalists would go for. But sometimes it works, according to Penchina. “Wikia has had several buy-out offers,” he said, but he’s “not interested.”

He sat down recently with IDG News Service to talk about his company and what makes him tick. What’s the biggest site in your community today?

Gil Penchina: WowWiki [World of Warcraft]. It’s where people give advice to each other on the game, how to build guilds, get through parts of the game, that kind of stuff. There are over 30,000 pages, all by contributing members.

ITB: Is it a non-profit?

Penchina: WowWiki is a for-profit site. You can barely tell by looking at it, but we sell a very modest amount of ads. We’re not a non-profit, we’re profit-less. We’re not really worried about profit now. We’re worried about building revenue. Our theory is we’ll make a little money on a lot of topics, instead of a lot of money on a few topics.

ITB: How did you get involved with Wikia?

Penchina: We’re about two and a half years old. I’ve been here about a year and a half. I was originally an investor, and I invested without having much information, which is scary. Welcome to Silicon Valley. So I had dinner with Jimmy a couple months after I did my investment, basically to find out what the heck I’d put my money into. He started to talk about what Wikipedia was trying to accomplish, its mission to make information free, and how it had become global and how people were sending him checks for $1,000 to donate, and I said seriously? People are sending checks for $1,000 to a Web site? That’s pretty passionate, who are these people?

So it got me all amped up on how interesting it was and I asked him what his biggest challenges were, both with Wikipedia and with Wikia, and he said it’s the same challenge. You have to expand the breadth of topics and expand the breadth of languages and you have to make it easier to read and write and to find information and to share information. And I said “wow, that’s interesting, because at eBay [Penchina’s former employer], we had to expand the categories, expand the countries, and make it easier to buy and sell.” Then for the next two hours at dinner we basically finished each other’s sentences over and over again.

I had just retired from eBay and was planning to do what people in Silicon Valley do after they retire: venture capital. But when I left that dinner, I called my wife and told her I had just figured out what I’m doing for the next 10 years.

ITB: Have you started a Wikia site? What’s your passion?

Penchina: Sadly, mine is frequent flyer miles. I was documenting all the ways you could get frequent flyer miles, all the different credit card offers, and all the other kooky ways you can get them. I have six and a half million frequent flyer miles. I am obsessive, clearly. I can talk about it for an hour at a cocktail party.

ITB: Do you think you have enough miles?

Penchina: No. I’ll never have enough miles. I have enough miles now that I can fly around the world 26 times, yet I am completely obsessed. That’s what you realize when you run a site like this. Everybody is passionate about something. It’s also fun to be an expert. It’s nice to have people come to you for advice.

ITB: You’ve talked a lot about how the search engine project will make it easy for anyone to build a search engine for about $500. But one question I’m still not clear on is, if you’re going to create competition for yourself, how is this project is going to pay off?

Penchina: People say to me, “That’s crazy, this is something you spend a million dollars putting together and probably a half a million dollars a year updating, and you’re just going to give it away for free?”

Actually, we might spend a quarter million dollars this year on the whole search project, on the engineers we pay, the search we run. … But by having users help out with this, the cost of crawling the Web is close to zero. There are some storage and bandwidth costs, but some partners are providing storage and bandwidth for free. [He declines to name them, citing nondisclosure agreements]

Between the crawl being free, plus the bandwidth and storage, it’s pretty cheap. Plus, by offering it out to the community, anyone else developing their own search engine will feed back software, patches, etc., which will strengthen the overall project. This is a mission our users believe in.

The philosophical tenets are so in tune with what we were doing anyway — volunteerism, free information, free software, making the world slightly better in some way — that we sort of had to do it.


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