Free as in beer? Some other ways of offering something for free
Written on March 14, 2008 – 1:13 pm
Jeroen Bakker,
Free, as in ‘for nothing’, is the theme of the latest issue of Wired. The issue, centered around ‘Free! Why $0.00 Is the Future of Business‘ by editor in chief Chris Anderson of The Long Tail fame, has sparked a long list of blog posts on every aspect of ‘free’. In this post I’d like to list some of my favorite ways of offering something to the market for free . Of course, lots of start-ups are focused on selling advertising directly or through Adsense, but there are other options to consider. The list isn’t complete of course, so please feel free to comment with other ideas!
Offer products for free and extract data from its use to sell
The best example I think is Newsgator. Newsgator offers several RSS readers and services (Newsgator, NetNewsWire, FeedDemon) and used to charge for them - they had actual revenue by charging for their products! Recently however, Newsgator decided to offer all readers for free. That way they gather a lot more data, which they will aggregate and offer as ‘attiontion data’ to publishers, journalists and other people interested in buzz. A risky way of transforming a business, but also one that could inspire a lot of other start-ups to rethink their sources of income.
If you want to learn more about this concept you should head over to the podcast section of Educators Corner by the Stanford Technology Ventures Program, where Mitch Kapor talks about his new start-up Foxmarks. Foxmarks enables users to synchronise different lists of bookmarks for free and plans to develop business cases on top of the many millions of bookmarks they aggregate through their product.
Offer the main product for free, charge for complementary products
This is the main thinking behind some of the recent acquisitions of open source products like MySQL. When you offer a product for free (MySQL), if you’re lucky, you’ll see a growing demand in your complementary products (like the servers that SUN offers).
Google is another great example: they need more pages to plave relevant ads on, so news, e-mail, search results, book pages, product search are great ways to serve more pages to more people and thus having more space to put ads on. For an excellent article on this, head over to Strategy+Business for ‘The Google Enigma‘ by Nicholas G. Carr.
I hope you like that post!
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