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They're Giving Away The Product, But Making It Up In Volume

If you're selling information on the Internet, it doesn't matter how much people get for free -- the only thing that matters is how much you sell. The recording, movie, and commercial software industries don't understand that, but Jimmy Wales does. Wales co-founded both the not-for-profit Wikipedia and for-profit Wikia, which announced a bold new strategy to "give away—for free—all the software, computing, storage and network access that Web site builders need to create community collaboration sites." Wikia will let people build sites using MediaWiki, the software that underlies Wikipedia, along with the hardware and infrastructure to run those sites. Publishers can keep the revenue; all that Wikia demands is that the sites link back to Wikia, which is advertising-supported.

Giving stuff away as part of a business model is nothing new on the Internet -- Netscape pioneered that as a business strategy more than 10 years ago. But is Wikia going too far?

The article doesn't say but I suspect that Wikia hopes to use the giveaway to hook customers, and then get revenue from consulting services down the road. Nothing dishonest: A publisher plays around with Wikia's free tools, and says, "Wow, this online community stuff is complicated!" and Wikia says, "Sure is. Want some help?" Many companies won't seek that help from Wikia, but those companies don't matter much to Wikia's bottom line, so long as enough companies do.

Wikia co-founder WikiAngela says: "It’s completely free; free as in beer, free as in freedom, and free as in content, software, bandwidth, storage and computing power!"

Amazon.com recently took a stake in Wikia, at the same time Wikia bought sports community ArmchairGM.

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