Wikipedia spinoff heads west
The for-profit progeny of the St. Petersburg startup will go to California, where its new chief lives and tech talent is available.
By TOM ZUCCO
Published September 9, 2006
It's one of the biggest concerns of the Tampa Bay area business community: How to keep promising young high-tech companies from leaving.
Case in point: Wikia.
Jimmy Wales, founder of St. Petersburg-based Wikipedia, the free online encyclopedia that in three years has become one of the top 50 most visited Web sites in the world, is sending Wikia, a for-profit spinoff, to Silicon Valley.
He has two reasons: The most qualified person to run the new company lives there and doesn't want to move; and the southern part of the San Francisco bay area is a magnet for the best minds in the tech business.
Wikipedia has a handful of paid employees and relies on the voluntary efforts of about 13,000 contributors. It depends solely on contributions for its $1.5-million budget.
But Wikia, Wikipedia's smaller sibling, is more of a public forum. As a company official described it, Wikipedia is an encyclopedia, while Wikia is the rest of the library and the magazine rack.
Eventually, with low overhead and text ads supplied by Google, Wikia could also become very lucrative. And that money would likely stay in California.
"It just made sense to locate the office out there," Wales explained Friday. "We're hiring engineers out there and Web people. You go where the talent is.
"I love the Tampa Bay area and the cost of living in California is ridiculous. But at the same time, there is a certain lack of density in this area of people who know about the Web and are Web programmers."
There was also the matter of Gil Penchina, the former eBay vice president of international expansion, who agreed in June to become CEO of Wikia only if he could remain in Silicon Valley.
"We had a big debate about where to locate the company," Wales said. "Gil Penchina was available but not willing to move. So for a startup company to get talent of that caliber, we had to make concessions."
It's just that kind of scenario that worries those who want to see Tampa Bay's tech community expand.
"Do I blame Jimmy? No. He wants the guy Penchina. What are you going to do? But boy, it would have been great to have Wikia here," said Tom Wallace, CEO of RedVector.com in Tampa and co-founder of the Tampa Bay Technology Forum, a group dedicated to expanding the area's tech footprint.
Fritz Eichelberger, founder of HotSpaces.net, a Tampa consulting and recruiting service, was more blunt.
"This area wants to be known as a tech area and here is one of the top 50 Web sites in the world, and in order for them to succeed, they need to move out of the area," Eichelberger said.
"This market has seen high-growth IT companies that have typically sold for billions - Intermedia, Digex.com and Tradex. Another search engine, Inktomi, was started locally and that sold for a billion dollars. So the market has had good success, but has faced challenges."
To keep tech companies like Wikia from relocating to the "other" bay area, industry watchers say, will take money, and a little attention.
In May, Wales raised $4-million in venture capitol to start Wikia. The money came from Silicon Valley investors.
"Tampa Bay is an aspiring startup hub, and there are a lot of things being done," said Ken Evans, vice president of marketing and product management for Persystent Technologies, a Tampa tech company. "But Wikia is an unfortunate loss because people think of this (the Tampa Bay area) as being the place where it was founded.
"We've got a lot of smart people in Tampa Bay. They exist. The one thing that's missing is the smart money," Evans said.
"Where are the venture capitalists in Florida? They're investing in Sonic Burger or a new parking garage."
But investors need to know about rising tech stars, Evans and others argue, and in Florida that may not always happen.
"We've got some really good tech companies that got their legs here in the Tampa Bay area, and sometimes, I'm not sure they get recognized for what they are," said Kurt Long, CEO of EpicTide Inc., a St. Petersburg security software firm. "So a company here might be a bigger deal 2,000 miles away.
"I'm not sure enough people in our area are really in tune with the significance of Wikipedia," Long said. "We should be holding on to the assets that we created with both hands."
At least for now, Wales said, that won't happen.
In May, Wales was named to Time magazine's list of the top 100 people whose power, talent or moral example is transforming our lives.
But in the Tampa Bay area, Wales flies below the radar screen.
"My wife and I always joke that if not for our daughter, we wouldn't know anybody in town," said Wales, who has lived in St. Petersburg for the past four years.
But the future of high-tech companies in the bay area is promising, he said.
"More people are moving here," he said, "because it's still a great place to live. You can't discount that."
Tom Zucco can be reached at email@example.com or (727) 893-8247.