Fee pushes
aside free in the Web world
by Alan Zisman (c) 2002 First published
in Business in Vancouver
, Issue #672 10-16 September, 2002 High Tech Office
column
During the years of the Internet hysteria in the late 1990s, many
dot-com
startups had a business model that assumed getting large numbers of
users
somehow would translate into eventual profitability. The easiest way to
build
a large user-base was to offer something compelling, for free.
Businesses offered free content, free software, free e-mail accounts,
free
Internet service providers, even free computers, with tortured
explanations
of how these services would evolve into profitable businesses.
Even now, "free" isn't dead. The open-source movement, for example,
survives
and continues to develop and upgrade outstanding software such as the Linux operating system, the Apache web server, the Mozilla browser, and the OpenOffice suite. Making freely
available
open-source software the basis for a profitable business isn't easy,
however.
Free e-mail is still available, but at many free services, the pressure
is
on users to convert that free account to a paid subscription. At
Microsoft-owned Hotmail, for
example, free accounts
have a limited amount of storage, which can quickly fill up with
unrequested
junk mail. And the useful POP mail retrieval service, which allows
Hotmail
users to retrieve e-mail from other addresses into their Hotmail
mailbox,
is no longer included with free accounts. In both cases, Hotmail
suggests
users sign on for MSN Extra Storage costing US$19.95 per year.
At the summer MacWorld conference, Apple CEO Steve Jobs announced the
end
of that company's free iTools online services. They had provided Mac
users
with free e-mail and home pages, Web-based disk storage and more.
Instead,
the company hopes to migrate customers to .Mac,
an
enhanced
version costing US$99.95 per year (US$49.95 for the first year
for current iTools subscribers).
Like Hotmail, Yahoo has offered a
popular
free e-mail service. That service is continuing, but as with
Microsoft's Hotmail,
Yahoo has begun to charge users for mail forwarding and collection
options.
In its search for profitability, Yahoo, which lost almost US$100
million last
year, is not just turning to its e-mail users. Best known as a
search-engine,
Yahoo earlier this year announced it would begin charging commercial
Web sites
US$299 for placement in its search results. This announcement does not
mean,
however, that businesses that haven't paid will no longer have their
Web
sites show up in response to searches on Yahoo.
Fee payment gets your Web site (or your competitors') placed near the
top
of the page of hits, under a category labelled "Sponsor Matches."
Searching
Yahoo, for example, for "Internet Service Provider Vancouver" got me
one sponsor
match, followed by 24 Web site matches, businesses that have not paid
Yahoo
for special placement.
Yahoo has joined other Web sites in starting to charge users for at
least
some content. Yahoo-users can now search the New York Times archives
back
to January 1, 2000 for US$2.50 per article.
Similarly, Salon.com, initially a
free
online magazine, now offers a US$30 per year subscription fee.
Subscribers
get additional content without the ads that overlay the free articles.
CNN
recently eliminated all free video content from its site. Would-be
viewers
now need to subscribe to the Real
Networks
SuperPass service offering a variety of video content for US$9.95 a
month.
RealNetworks claims to have signed up more than 500,000 subscribers,
splitting
fees with content providers such as CNN and ABC.
Patrick Keane, an analyst with Jupiter Media Metrix, suggests paid
content
"needs to be very proprietary and original to succeed." Many porn
sites, for
example, have created successful online business models based on
charging
for content. And Business in Vancouver
has
its weekly and archived content, including this column, available only
to
subscribers of the print edition at www.biv.com.
Still free, however: www.theendoffree.com,
chronicling
the
evolution of the Net from free to fee.
