WIKIPEDIA, the collectively compiled and edited online encyclopaedia, is one of the more remarkable achievements of the digital age. If published, its contents would fill 75 volumes; it contains entries too obscure for even the Encyclopaedia Britannica.
But would you bet on its reliability? Probably only with the greatest caution. So Wikinvest.com is an interesting development. Based on the same principles as Wikipedia, the site – which officially went live on Monday – contains collectively written and edited profiles of publicly traded American companies. A separate section tells investors if they should be bullish, bearish or neutral, while the Concepts page allows you to look at an investment idea – carbon trading, say – and see which companies the user community thinks are most likely to benefit or suffer from it. Another feature allows you to track recommendations of an individual user and follow their reliability; this is probably how most people will eventually use the site, adopting someone as their de facto investment adviser.
Parker Conrad and Michael Sha, the founders, have raised $2.5m through venture capital backers. They intend to use this to build up an audience; once established, they will sell advertising. Unlike Jimmy Wales’ Wikipedia, this is not intended to be a not-for-profit venture.
But the idea is not without its flaws. The biggest is that people will use it to try and spread false information or otherwise manipulate the market; this already bedevils financial discussion boards. Wikinvest.com tracks the IP address of every user and will ban offenders. But the perception that false information could still get through will be a problem as the fledgeling site strives to gain user trust.
Likewise, errors on Wikipedia are rapidly corrected, but even the quickest amendment on Wikinvest.com might not be enough to stop day traders, expected to be the heaviest users, from getting burned.
The Wikipedia concept is truly revolutionary. How though it translates into a reliable and profitable business model is far from clear.
