Wikia Inc. plans to offer a free online application hosting service in the near future, but has no idea how it will make money from it.

The company will launch Openserving with one hosted application, an open source content-management platform that it acquired when it bought sports fan-site ArmchairGM last week.

"Open source was the beginning. Free culture is what's happening next," Wikia CEO Gil Penchina said.

Openserving will go further than Wikia's current services, by giving away hosting services and bandwidth, in addition to allowing site creators to keep the advertising revenue generated by the site.

"If we give away the bandwidth and the storage, and we get none of the advertising revenue, what's the business model? Well, I don't know yet," Penchina said.

The software acquired with ArmchairGM will let Openserving customers create collaborative publishing sites, combining elements of blogs and wikis.

Wikia received a total of $4 million in funding from Bessemer Venture Partners, Omidyar Network and individual investors including Marc Andreessen and Mitch Kapor earlier this year, and last week received a second round of investment from Amazon.com. The companies did not disclose the amount of Amazon's investment.

Wikia, Inc. the leading site for information on thousands of topics written by a community of contributors, today announced that it has agreed in principle to acquire popular online sports community ArmchairGM in a deal valued at more than $2 million.

Both companies share a vision of creating free and open content that enables passionate users to create online communities around any topic of interest. Already, both Wikia and ArmchairGM leverage the same underlying software and encourage users to play an active role in the creation and maintenance of the community by allowing them to easily edit, share, and enhance all content on a given topic.

“Our users have been asking for more interactive and graphically intuitive features,” said Gil Penchina, CEO of Wikia. “When we looked at what the ArmchairGM guys had created, we saw tremendous similarities and some real innovation. You can expect to see us move quickly to incorporate some of the more interactive features of the ArmchairGM technology into Wikia—particularly the voting capabilities. At the same time, we continue to look for other acquisition candidates building off Mediawiki software.”

In the coming weeks, the two companies will combine technologies to create numerous highly-interactive information communities on topics ranging from restaurant reviews to politics, and everything in-between.

Started in March of 2006 by a group of four New York sports fanatics, ArmchairGM has grown to more than 52,000 pages of user-generated content on all-things sports. The site currently offers a sports encyclopedia and dictionary, sports travel guides, “Ask the Chair” Q&A board, a sports blog index, the ability for users to submit and vote on the day’s most popular sports stories, and much more.