The Wall Street Journal amazes us again with a stunning article about the new economics involving the internet. This thought provoking article is about the “giving it away for free” internet marketing strategy that is used by so many social networking sites such as Facebook, Friendster and MySpace.
Here is a little taste of the tastey filling inside:
Gratis can be a good business. How? Pretty simple: The minority of customers who pay subsidize the majority who do not. Sometimes that’s two different sets of customers, as in the traditional media model: A few advertisers pay for content so lots of consumers can get it cheap or free. The concept isn’t new, but now that same model is powering everything from photo sharing to online bingo. The last decade has seen the extension of this “two-sided market” model far beyond media, and today it is the revenue engine for all of the biggest Web companies, from Facebook and MySpace to Google itself.
You can read the full article here: http://online.wsj.com/article/SB123335678420235003.html
Pdf version inside.
For those of you who want a version to read without the internet, here is a PDF version of the article.
Download: The-Economics-Of-Giving-It-Away.pdf
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