Monday, May 29, 2006

There's still no free lunch

Here, Nicholas Carr explains why Google and Yahoo have an active interest in subsidizing the creation of free internet content:
The enforcers of the new model are the search-based ad-placement services, mainly, at the moment, Google and Yahoo. Their business comes down to scale - in particular, the overall scale of internet use. To expand the scale of use, they want to ensure that there's as much content as possible available on the internet for free. Think about it. Every piece of content - indeed, every service - on the internet is simply a complement to these companies' ad placement business (and the underlying search business). It's thus in their interest to drive the price of those complements down as far as possible, preferably to zero. Subscription pricing, and any other barrier to the free availability of online content and services, is anathema to them because it necessarily constrains the use of the internet. I am not criticizing these companies. I am simply pointing out that they are very powerful presences on the internet and that their core business turns all other web businesses into, in their view, complements that should be free. For Google and Yahoo, the so-called "gift economy" is indeed a gift.
This is, of course, why they fund programs like Performancing and services like Blogger.

Tanstaafl lives on, even in Web 2.0.

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