Comments on: Google is Learning the Reality of Free ? http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/ the mark cuban weblog Thu, 18 Mar 2010 08:01:02 +0000 http://wordpress.com/ hourly 1 By: dallasrealestateman http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-66126 dallasrealestateman Wed, 19 Aug 2009 20:36:30 +0000 http://blogmaverick.com/?p=1331#comment-66126 Ad funded GASE (Google Apps Standard Edition) is here to stay but only scales up to 50 users. Over 50 users and you are forced to buy the Premium edition which has a monthly fee and competes directly with a hosted suite Microsoft sells. Google attacking MS on the productivity front is a waste of funds. All the Telcos and big partners are already making money off Microsoft and stand to make more money pitching the hosted version of the server products they already sell. This is another classic example of a company with a killer revenue stream (Search in this case) desperately trying to grow in order to hit wall street expectations. MS is doing the same thing with a $500M Bing advertising campaign. Ad funded GASE (Google Apps Standard Edition) is here to stay but only scales up to 50 users. Over 50 users and you are forced to buy the Premium edition which has a monthly fee and competes directly with a hosted suite Microsoft sells.

Google attacking MS on the productivity front is a waste of funds. All the Telcos and big partners are already making money off Microsoft and stand to make more money pitching the hosted version of the server products they already sell.

This is another classic example of a company with a killer revenue stream (Search in this case) desperately trying to grow in order to hit wall street expectations. MS is doing the same thing with a $500M Bing advertising campaign.

]]> By: Bill Gurley on the “Free” Business Model « abovethecrowd.com http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65702 Bill Gurley on the “Free” Business Model « abovethecrowd.com Wed, 15 Jul 2009 17:22:12 +0000 http://blogmaverick.com/?p=1331#comment-65702 [...] Distributed,” “When You Succeed with Free, You are Going to Die By Free,” “Google Is Learning the Reality of Free,” and “A Quick Ditty on Free.” Mark, like Malcolm highlights many of the dark [...] [...] Distributed,” “When You Succeed with Free, You are Going to Die By Free,” “Google Is Learning the Reality of Free,” and “A Quick Ditty on Free.” Mark, like Malcolm highlights many of the dark [...]

]]> By: hymanroth http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65633 hymanroth Sat, 11 Jul 2009 16:52:41 +0000 http://blogmaverick.com/?p=1331#comment-65633 Free allows you to create a big bubble of users - but when you try to touch the bubble with anything other than adverts - pop! - it's gone. Hence most SNs (for example) are, and will remain, free. If any one SN attempted to charge for the service, users would move to the next best available free network. So it's true: who lives by free, dies by free. The really nasty part of the free technique isn't the damage you do to yourself (or your investors). Pardon the pun, but it's a free world: if you want to beat yourself up, then you can. The real problem is what you end up doing to your competitors - you take them down with you. I call this <a href='http://lmframework.com/blog/2009/07/kamikaze-marketing' rel="nofollow">Kamikaze Marketing</a>. The reason why free, mainly in the guise of freemium, is so widespread has less to do with the merits of a model where on average 97% of your users don't pay - and a lot more to with a lack of a viable alternative. People hate subscriptions. When companies finally realize this and move to usage-based payment models then perhaps we can look back on this current obsession with free in the same way we look back at the way people dressed in the seventies. Free allows you to create a big bubble of users – but when you try to touch the bubble with anything other than adverts – pop! – it’s gone. Hence most SNs (for example) are, and will remain, free. If any one SN attempted to charge for the service, users would move to the next best available free network. So it’s true: who lives by free, dies by free.

The really nasty part of the free technique isn’t the damage you do to yourself (or your investors). Pardon the pun, but it’s a free world: if you want to beat yourself up, then you can. The real problem is what you end up doing to your competitors – you take them down with you. I call this Kamikaze Marketing.

The reason why free, mainly in the guise of freemium, is so widespread has less to do with the merits of a model where on average 97% of your users don’t pay – and a lot more to with a lack of a viable alternative.

People hate subscriptions. When companies finally realize this and move to usage-based payment models then perhaps we can look back on this current obsession with free in the same way we look back at the way people dressed in the seventies.

]]> By: markmontoya http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65623 markmontoya Fri, 10 Jul 2009 02:12:23 +0000 http://blogmaverick.com/?p=1331#comment-65623 Reminiscent of the saying 'there is no such thing as a free lunch'... perhaps we are coming to understand this more and more in today's economic/political/social climate. Mark Montoya http://www.MarkMontoya.com @MarkMontoya Reminiscent of the saying ‘there is no such thing as a free lunch’… perhaps we are coming to understand this more and more in today’s economic/political/social climate.

Mark Montoya
http://www.MarkMontoya.com
@MarkMontoya

]]> By: StevieB’s Shared Items – July 8, 2009 at Lost in Cyberspace http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65581 StevieB’s Shared Items – July 8, 2009 at Lost in Cyberspace Wed, 08 Jul 2009 09:59:43 +0000 http://blogmaverick.com/?p=1331#comment-65581 [...] Google is Learning the Reality of Free ?July 7, 2009 [...] [...] Google is Learning the Reality of Free ?July 7, 2009 [...]

]]> By: jdodge349 http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65560 jdodge349 Tue, 07 Jul 2009 21:06:18 +0000 http://blogmaverick.com/?p=1331#comment-65560 Hey Mark, I think you are overplaying the free thing. Not quite sure how free changes industry dynamics. Here's my point of view. http://bit.ly/d3gDf Hey Mark,

I think you are overplaying the free thing. Not quite sure how free changes industry dynamics. Here’s my point of view.

http://bit.ly/d3gDf

]]> By: Cuban’s Death by `Free’ Theory Overplayed - SmartPlanet http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65559 Cuban’s Death by `Free’ Theory Overplayed - SmartPlanet Tue, 07 Jul 2009 20:59:08 +0000 http://blogmaverick.com/?p=1331#comment-65559 [...] another post, Cuban writes that Google’s attempts to steer customers toward  paying versions of [...] [...] another post, Cuban writes that Google’s attempts to steer customers toward  paying versions of [...]

]]> By: MobileJay http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65557 MobileJay Tue, 07 Jul 2009 20:21:22 +0000 http://blogmaverick.com/?p=1331#comment-65557 I think you're right on the reality of free. Businesses, especially start-ups, have a choice to make. They can go after the consumers, but this forces an ad driven business model, since consumers aren't typically willing to pay for services. Alternatively, a business can target other businesses, and this b2b model can actually create revenue from the start, since businesses are more understanding about actually paying for something they use. It does tend to weed out the less utilitarian applications though. I wonder how something like flickr would have done if it weren't free. I think you’re right on the reality of free. Businesses, especially start-ups, have a choice to make. They can go after the consumers, but this forces an ad driven business model, since consumers aren’t typically willing to pay for services. Alternatively, a business can target other businesses, and this b2b model can actually create revenue from the start, since businesses are more understanding about actually paying for something they use. It does tend to weed out the less utilitarian applications though. I wonder how something like flickr would have done if it weren’t free.

]]> By: maltschul http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65554 maltschul Tue, 07 Jul 2009 18:40:09 +0000 http://blogmaverick.com/?p=1331#comment-65554 It appears to have been a UI redesign mistake. Via TechCrunch: http://www.techcrunch.com/2009/07/07/google-apps-standard-edition-findable-again/ Google responded, "In experimenting with a number of different landing page layouts, the link to Standard Edition was inadvertently dropped from one of the variations. We are in the process of restoring it and you should see it soon. We have no intention of eliminating Google Apps Standard Edition, and are sorry for the confusion." It appears to have been a UI redesign mistake. Via TechCrunch: http://www.techcrunch.com/2009/07/07/google-apps-standard-edition-findable-again/

Google responded, “In experimenting with a number of different landing page layouts, the link to Standard Edition was inadvertently dropped from one of the variations. We are in the process of restoring it and you should see it soon. We have no intention of eliminating Google Apps Standard Edition, and are sorry for the confusion.”

]]> By: M.Wanzer http://blogmaverick.com/2009/07/07/google-is-learning-the-reality-of-free/#comment-65551 M.Wanzer Tue, 07 Jul 2009 18:12:07 +0000 http://blogmaverick.com/?p=1331#comment-65551 <a href="http://www.isit5oclock.com" rel="nofollow">M.Wanzer</a> Well, I guess I have to question what you mean by survive by an exclusively free model. I would say Red Hat is an example of a company that completely gives its <b>product</b> away, but charges for support. I think every company has to charge for something, while that might not be its actual products it could be support, or analytics about who is using their software. Is this what you mean? If you are asking are there any companies that survive by not charging for anything, I have to say no. I mean twitter is a company that is surviving by making no money (but thats because inverstor keep dumping capital into them)..but eventually they are going to have to charge for something..probably analytics for companies that want to know if the public is actually paying attention to their ads that are masked as "tweets". <strong> From MC> Actually doesnt Red Hat give away an open source product that they have updated some ? My take on their business is that nothing they offer is for free. They started a service business around Unix and charged every step of the way. But you make my point with the Twitter example. They will have to charge for something. Butwhen they do, what happens to the dynamics of a company that has never sold anything ?</strong> M.Wanzer

Well, I guess I have to question what you mean by survive by an exclusively free model. I would say Red Hat is an example of a company that completely gives its product away, but charges for support. I think every company has to charge for something, while that might not be its actual products it could be support, or analytics about who is using their software. Is this what you mean? If you are asking are there any companies that survive by not charging for anything, I have to say no. I mean twitter is a company that is surviving by making no money (but thats because inverstor keep dumping capital into them)..but eventually they are going to have to charge for something..probably analytics for companies that want to know if the public is actually paying attention to their ads that are masked as “tweets”.

From MC> Actually doesnt Red Hat give away an open source product that they have updated some ? My take on their business is that nothing they offer is for free. They started a service business around Unix and charged every step of the way. But you make my point with the Twitter example. They will have to charge for something. Butwhen they do, what happens to the dynamics of a company that has never sold anything ?

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