Embracing the financial-market leanings that led him to launch Wikipedia, former Chicago options trader Jimmy Wales tries to take an Internet phenomenon into the black.

Jimmy Wales had no life, which suited him just fine. It was 1994. He had abandoned the insular world of academia to take a dream job at Chicago Options Associates. He loved it -- nearly to the exclusion of all else, working long hours. Once he did get home, Wales spent much of his free time running computer models in pursuit of risk-arbitrage strategies late into the night. His idea of a good time was pinpointing price discrepancies between Fed Funds and LIBOR futures contracts.

"I was pretty obsessed," he says, looking back on the four years he spent as a quant trader. It would not be his last obsession.

Among the earliest known forms of encyclopedias came courtesy of ancient Greek philosopher Speusippus, who in the fourth century b.c. looked to his uncle Plato as a scholastic role model. In the mid-nineteenth century, Isaac Funk drew upon his experiences in publishing and at the pulpit as he set out to create bound volumes of knowledge. (Wagnalls was his college buddy.)

Wales, by contrast, owes his inspiration to the financial markets. A student of free-market thinking, Wales used the tenets he honed as a trader to form Wikipedia, the online user-generated encyclopedia that has become, since its founding seven years ago, an Internet dynamo.

The core mechanism that makes the site work is, after all, an offshoot of the free market, the ultimate play on the wisdom of crowds. A virtual community of users (anyone with an Internet connection can create, write, revise, correct, vandalize or make incorrect a Wikipedia entry) controls the content -- it is a decentralized, bottom-up structure that in many ways parallels the bid-sell, price-discovery action of a financial exchange.

"All of my work is influenced by market economics, in thousands of subtle ways," Wales says. "It underlies my thinking about everything."

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