Is FreeRice.com making $150k each day in profits?
FreeRice.com is a site that tries to educate and feed the world at the same time, but just taking a quick look at their figures shows there is a massive potential of earning money from this "philanthropic" gesture. Just how much is the owner keeping?
I'm going edge around this one carefully because what FreeRice is indeed a noble idea. Ending poverty and needless starvation around the world is something that should happen. The maths (and some conclusions) in this post are from the school of napkin-mathematics and should be treated as such. If you see any massive errors, wang me an email or pop in a comment and I'll correct it right away.
Disclaimers aside, FreeRice.com is a site that promises to educate and feed at the same time. It's a vocabulary test and every time you get a word correct, FreeRice donates 10 grains of rice to the United Nations World Food Program, paying for it from funds it receives from sponsors at the bottom of the page.
However, FreeRice is not a registered charity. As far as I can see, this all boils down to the work of one man: John Breen, who started poverty.com in January 2007. This is significant, I believe, because there is no accounting and no legislation regarding funds (other than tax).
So how much rice is being given away? Thankfully FreeRice publishes its daily totals. As you can see, November the 11th saw 136,236,930 grains of rice donated. Going on the figure I've seen in a few places (1, 2 & 3), there are approximately 50,000 grains of rice to a kilo. So on a busy day like yesterday FreeRice donates 2724.7kg of rice. An admirable amount.
Next question: how much does rice cost? This is a much tougher question. Depending on the quantities used, the prices of rice, change dramatically. I did find a Thai site selling it for $309/ton. Given that a [short] ton is 907kilos, the price for 2724.7kg of rice is a mere $928.
How much could the site be earning? This is an iffy bit. We know from the totals that that at least 13,623,693 correct words were submitted. I'm estimating a 10% failure rate. So we're looking at upwards of 14,986,062 pageviews. There is no way of knowing (from the outside) how many people visit the site and don't play, so I'm just leaving that off but remember that this pageview figure is guaranteed to be lower (probably much lower) than the real value.
If we went on average AdSense advertising rates, we're looking at 50 clicks every 1000 pageviews and each click being worth $0.20. So based on the ~15million pageviews figure, revenue could be upward of: $149,860.
$149k of profit*
So taking off the cost of rice, there's just under $149k of profit, every day at the current traffic level. There's actually more because my pageview value is deliberately low, missing off people who don't play.
Points that need mentioning in conclusion:
- While there is the potential for $150,000 a day (if not more), only John Breen knows the real revenue.
- Following on from that, there is a severe issue with the system. Breen should register a charity and funds (both in and out) should be publicly visible and accountable. Sponsors should demand this.
- The revenue model is probably not a CTR model, rather a flat fee or CPM.
- There are other costs involved too that I haven't worked out. Hosting will be petty but things like ordering and delivering the rice may be significant. However, in bulk the UN World Food Program may pick up this side of things.
It all boils down to accountability and the people giving him this money should be the ones asking these questions. Breen may or may not be getting a ton of revenue off this. He may just be covering his costs but what is clear is there is either scope for improvement and donating more to charity, or Breen is getting rich from faux-charity.
Update: I called it faux-charity, my reasoning being that not all charity is equal and pouring hours into a system like this, although fun doesn't actually accomplish as much as, say, giving your loose change to charity collectors. I've formed this sode of things into it's own argument: Is all charity good?
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