Best known for its "enthusiast" wikis, Wikia hosts more than 50,000 fan sites including the Star Wars Wookieepedia, Harry Potter Wiki, Twilight Saga Wiki and World of Warcraft WoWWiki. In addition to some of the larger fan sites, Penchina also points to the Cannon Hacker Development Wiki, Recipes Wiki and Pet Diabetes Wiki as great examples of Wikia contributors.

While Wikia hosts nearly 3 million pages of content with a number of niche community sites, it's the fan pages that drive the majority of advertising and marketing revenue. Wikia's small team of less than 10 sales staff create packages that consist of everything from branded banner ads to embedded shows and contests. In addition to sponsors like World of Warcraft, a number of television studios are also in partnership talks.

Says Penchina, "In many cases, these sites are like small franchises and the editors are really dedicated. The input we've had from editors regarding advertising are suggestions I generally agree with." In the World of Warcraft Wiki the community has asked that no advertisements be permitted that might negatively affect game play. For this reason, Penchina's team does not allow advertisements for WoW gold.

By providing an environment where die hard fans and premium brands can coexist, Wikia is doing a great job maintaining its authenticity while also turning a profit. While the service has struggled to establish itself as a separate brand from its Wikipedia origins, it appears that the fan communities have done everything they can to make it a success from the ground up.

When Mahalo first launched, my instinctive reaction (which I recorded on my personal Blog) was that this was "old wine in new bottles". Traditional publishers have been doing "human powered search" even BI (Before Internet) but these went by boring names like Directory. Human editors work great in well defined niches, always have done and always will. Human editors produce the expert content that Google finds for you. This is long tail publishing. This is Business Media and Enthusiast Media, large but slow growth traditional publishing segments of the media industry.

But an Internet scale venture powered by humans rather than software? We look at three reasons why this might work and two reasons why it won't work.

Three Pros And Two Cons

Most ventures in this space highlight three things that a human editor can always do better than a software program. These are the three Pros:

1. Spam control. Humans can easily spot even the most ingenious spam .

2. Duplicate control. 10 articles that all say virtually the same thing are just a waste of time.

3. Disambiguation. Computers need an awful lot of expensive programming to always spot the difference between "apple" as a fruit, a consumer electronics company or a record label. Humans can do it in a flash.

The two Cons:

1. You cannot persuade people to break their Google habit until your searches are better than Google for most cases (not just the few cases where you specialize). This massive hurdle is true for all search engines.

2. You cannot win as a destination site if you are general purpose. You go to the sites that specialize in the areas that interest you. If you don't know what sites to go to, Google will find those sites for you.

So, do three Pros beat two Cons? Not in this case. The Pros are three relatively minor irritants that human powered search fixes. The Cons are total showstoppers.

Pay People To Write Content?

Mahalo pays people to create content. That means they can predict the quality of the results. Paying people requires lots of funding. Mahalo has plenty of funding and it is unlikely anybody else will get funded with the same model. So Mahalo has a fairly long and clear runway before take-off. Mahalo is private company so we don't know how long it will take them to get to profitability or even if the basic economics make profitability feasible at all. In today's climate, nobody will buy Mahalo without a clear path to profitability.

Are you Bullish or Bearish on Mahalo? Cast your vote in our Company Index (powered by TradeVibes). My vote was Bearish and I was in the majority at the time I cast my vote (80% Bullish vs 20% Bearish). The sample size on that vote was too low to be meaningful (40), so the more votes the better.

The Elephant In The Community Generated Content Room

Most other ventures get "the community" to create the content. The elephant in this room is of course Wikipedia. How on earth do you get general knowledge content that is better at scale than Wikipedia? How do you motivate people to create content if, unlike Mahalo, you are not paying their salaries? Google's answer with Knol was to pay them indirectly via Adsense revenue. The market jury on Knol is still out. If Google cannot win, how can any other start-up without their brand power? If the Knol competitor also monetizes through Adsense, their margin is even less.

About The Players

The other well funded venture that wears the human powered search label is Wikia. Founded by Jimmy Wales of Wikipedia fame, this looks like the largest pure Wiki style venture. Content is community generated, but it appears that they have editors/moderators/curators on payroll.

Squidoo looks like a bootstrapped venture. It is hard to tell if it has traction. Looking at Squidoo's page on TradeVibes will point to many other inexpensive Wiki style ventures. The basic technology of Wikis is now a total commodity.

One of the earliest ventures, About.com, is now owned by the New York Times. On my survey of one, About is the one site other than Wikipedia that surfaces a lot in general knowledge type searches. At the scale they operate, it may well be profitable. So Mahalo, Wiki and other human powered search engines may have a bright future.

What do you think? Can general purpose human powered search engines scale and make money? Or will they either fail or move into small niches? What new ventures have a fundamentally differentiated approach to this market?

The ability to set up an Open Source social network is now available to anyone who can put a Mediawiki install on their servers. Look out Ning and other proprietary social networking platforms!

ArmchairGM in particular has been a big social networking innovator in the Wiki market and was acquired to help drive the design of the whole Wikia ecosystem. That site is made up of news driven editorial and has a remarkably active community of participants.

Why do social networking on a wiki? On one hand, a wiki is just a web site that's easy for anyone to edit - see Mahalo for example, another Mediawiki-based community. Beyond that though, social networking features create more points of contact for users with a website and help populate the site with content far beyond what the site's owners or solitary users editing alone could put in.

What's Included

The source code released offers Wikia's features for profile creation, avatar upload, friending (and "foeing" - the making of enemies in a network!), and a Facebook-"Wall" style messaging system for individual and group friend messaging called the Board. These features are now available for Mediawiki-based sites anywhere on the web, including for commercial use.

[Story continued below screenshot of profile page]

There are quite a few other features on ArmchairGM that I wish were being released but aren't. See the Digg-spy style Site Scout, for example. The Recent Changes display on GM is also quite nice but not being open sourced.

Why This Matters

This release is sure to be of interest to the owners of and participants in thousands of Mediawiki-based communities focused on a wide range of topics.

More generally, though, it could impact the social news and networking economy overall. We wrote earlier this week that the big social news aggregator model (Digg, Yahoo! Buzz) is vulnerable to market share erosion at the hands of niche social news sites. The same can be said for the big, general interest social networking sites. While most users will probably always want some presence on big sites, the potential is there to have the majority of communication online occur in a targeted niche community of people interested in and informed about the specific topics that an individual is interested in.

Related Resources

If you're interested in the wacky world of wikis, here's an RSS feed of blog posts about wikis (filtered with FeedRinse to remove mentions of Jotspot just because that's going to clog the airwaves for the next 48 hours), here's a wonderful video explaining wikis in plain english from CommonCraft, and here is wiki consultant Stewart Mader's great short video series 21 Days of Wiki Adoption.