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Information Wants To Be Free

Published: 2/27/2008 10:06:16 AM

There's an interesting debate about the prevalence of "free" services on the Internet, especially for those businesses where the marginal cost of delivering the next item is close to zero.

Although it is a complex topic, my take on it is that for those online businesses that are principally aimed at communications, such as social networks, free is an idea that works pretty well.

The reason is that networks that can grow through word of mouth and gain rapid adoption can then monetize those page views through advertisements - at least enough to support the capital structure of the company.

Other online businesses that can't scale quickly, and thus require greater investment in longer term marketing, simply won't be able to offer their services for free and survive. 

I foresee a period in the coming years where various types of online businesses will discover which can be supported by third parties, i.e. advertisers, and which cannot.

Don Jones

VentureDeal

 

Don Jones
CEO, VentureDeal

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