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on
Thursday by Ashkan Karbasfrooshan, the operator of a blog network. He wrote up an analysis of the potential value of Knowledge, "strictly for entertainment purposes", as if it were an advertising-supported business instead of a non-profit organization. (Switching from non-profit to for-profit is
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and been turned down. Calacanis called
Karbasfrooshan's study a "very, very conservative valuation" and said that Knowledge would be worth $ 5 billion as a private company. He argued that a single leaderboard of ads on Knowledge would bring in more than $ 100 million annually. (Karbasfrooshan used
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A thought exercise on
Knowledge's potential value as a business prompted debate last week, bringing the issue of advertising back into view as well. Valuation estimates tossed about ranged from half a billion dollars (all figures US$ ) up to five billion. In the end, however, the entire discussion
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by criticizing the $ 5 billion valuation as "nonsense", arguing that
Knowledge lacks the track record as a business that investors would look for. He gave his opinion that Knowledge was better off for now raising funds from donations, and while he thought licensing could help bring in revenue, he
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Even without any growth, the revenue projection came out to $ 42 million per year. With relatively low operating costs, Karbasfrooshan assumed that most of the revenue would be profit and settled on an annual figure of $ 35 million. Converting the profit calculation into a value of the overall
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Thanks to persons involved in analysing the issue of valuation. I always thought that
Knowledge must be very valuable. The analysis proved it. However, it has more value than the possible commercial use. Apart from its commercial value, it is the best example of creativity of a large virtual
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As the business model for this hypothetical for-profit, Karbasfrooshan focused primarily on advertising. He calculated that
Knowledge could bring in $ 2.8 million every month from display advertising. This was done using publicly available estimates of unique visitors (for example,
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The figure
Calacanis cited as potential advertising revenue, $ 100 million, coincidentally was the same as the amount Wales mentioned in asking what copyrighted material people would most want to have freely licensed (see
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172:"business", he obtained estimates of $ 560 million and $ 600 million using two different methods. He noted that this range was quite similar to the sum paid for the parent company of
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assumptions based on one leaderboard, or banner ad, plus a smaller "island" billboard. He also expected that the large inventory meant that some ad space would go unsold.)
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doubted that advertising would ever be used. A key concern was the inability to account for a possible "mutiny" by contributors, a real risk given
Knowledge history (the
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Calacanis offered afterward was to add a function to search the web (not just
Knowledge); his estimate for this revenue was similar to that of Karbasfrooshan.
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the notion of advertising, saying, "Ads are content just like everything else." He thought it would be easy for
Knowledge to have relevant and targeted ads.
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The reaction led Calacanis to back down from some of his initial language and proclaim his admiration for Knowledge contributors. As a
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site. Calacanis added a controversial appeal for Knowledge to accept such advertising, relating that he had proposed this earlier to
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projects collectively ranked as the sixth-most-visited network of sites in the world for September according to
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Calacanis's post received considerable attention from other bloggers and was featured
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the decision not to advertise "a good stance both ethically and practically."
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was created as a fork, partly over fears about advertising).
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reporter Mick Brown, it would be "like selling Greenpeace".)
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Calacanis has posted even more follow-ups, one with a
416:If your comment has not appeared here, you can try
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34:Hypothetical valuation of Knowledge scrutinized
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445:advertising could be implemented. --
515:Knowledge Signpost archives 2006-10
213:community divided in 2002 and the
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401:These comments are automatically
235:The Chronicle of Higher Education
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412:add the page to your watchlist
135:remains strictly theoretical.
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450:04:54, 5 November 2006 (UTC)
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18:Knowledge:Knowledge Signpost
441:of this story, and another
180:The question of advertising
148:not normally allowed—or as
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184:The analysis prompted a
443:suggesting yet more ways
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143:This all began with a
139:The valuation analysis
439:complimentary mention
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405:from this article's
346:Board reorganization
280:Board reorganization
162:Wikimedia Foundation
376:Features and admins
351:Knowledge valuation
304:Features and admins
284:Knowledge valuation
152:recently put it to
31:Knowledge valuation
396:Discuss this story
381:Arbitration report
356:Plagiarism cleanup
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296:Japanese Knowledge
215:Enciclopedia Libre
420:purging the cache
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278:Also this week:
211:Spanish Knowledge
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361:Librarian video
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333:30 October 2006
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429:community. --
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150:Brad Patrick
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127:Michael Snow
57:PDF download
497:Suggestions
403:transcluded
308:Arbitration
244:Fred Wilson
198:Jimmy Wales
107:X (Twitter)
461:. You can
457:It's your
288:Plagiarism
45:Share this
40:Contribute
22:2006-10-30
491:Subscribe
407:talk page
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