Wikis emerge as a social networking component

Investors in companies that provide wiki technology are betting that social networking applications are where the growth lies.

For example, Seattle-based Inc., which last month raised a $25 million round from DAG Ventures, Accel Partners, Trinity Ventures and Frazier Technology Ventures, plans to use the funding to ramp up its new Wetpaint Injected service that can add wiki and social networking functions to pre-existing websites.

Wetpaint’s cash infusion comes six months after Palo Alto, Calif.-based SocialText Inc. raised $9.5 million in a Series C round of funding led by Draper Fisher Jurvetson. In April, SocialText announced it was incorporating more Facebook-like functionality to its enterprise wiki service.

SocialText expects to release services called Dashboard and People in the next several months to add a stronger social networking component to its offerings.

Combining social networking and wiki technology—which allows multiple people to collaborate and edit a website—is happening as wikis are becoming ubiquitous, according to G. Oliver Young, an analyst at Forrester Research.

“I think the big reason wiki vendors are pushing into things like social networking is that wikis are now more commoditized,” says Young, who notes that the Wikipedia online encyclopedia has grown into one of the Internet’s most popular destinations.

While companies such as Wetpaint and SocialText are competing against a host of inexpensive and sometimes free alternatives, the merging of Facebook-style social networking with wikis “is relatively valuable and could be game changing,” Young says. He points to Forrester research that indicates spending by companies on social networking technology will rise from $149 million in 2007 to nearly $2 billion in 2013. Spending on wikis, meanwhile, will only grow from $63 million in 2007 to $451 million in 2013, according to Young’s report, “Global Enterprise Web 2.0 Market Forecast: 2007 to 2013.”

VC-backed Wetpaint, which has primarily been known as a company that allows users to build their own wiki-related websites, says that it is enjoying soaring growth in the number of unique visitors to its service. With about 1 million wiki sites built by its users already, Wetpaint boasts that it is adding 2,000 new sites every day.

“Our view is that wikis are just one part of a social networking platform,” says Len Jordan, general partner at Frazier Technology Ventures, which led the recent investment in Wetpaint.

While SocialText and Wetpaint have different business models—SocialText charges enterprises to use its service while Wetpaint makes its money through advertising—they compete with Google, which bought wiki startup JotSpot Inc. two years ago for an undisclosed price. Google Sites is based on technology developed by JotSpot, and the service only re-emerged for use this year.

Prior to the Google acquisition, JotSpot was funded by Redpoint Ventures and Mayfield Fund.

Meanwhile, some search engines are also turning into wikis, and vice versa.

In late May,, the people-powered search engine, announced it was becoming more like a wiki. The Santa Monica, Calif.-based company announced that it would allow anyone to edit its article pages, essentially turning itself into a full-fledged wiki search engine. Internet entrepreneur and Sequoia Capital investor Jason Calacanis launched Mahalo last year with an undisclosed amount of funding from Sequoia, News Corp. and individual investor Elon Musk.

Mahalo’s announcement came a few months after Wikia, a service that hosts ad-support wiki communities, announced it would begin building a people-powered search engine. Wikia is funded by Bessemer Venture Partners, Omidyar Network and

With so many wiki companies, Young wonders if all the startups will last.

“The big problem [business customers] are going to face is not getting wiki technology but what to do with all the wiki technology they have,” he says. “I see a near future where a company has a wiki from SocialText, they have one from Microsoft, and a number of others from different companies, and they don’t know which one to use.”