Free Isn’t Really Free

Lots of people, including me, use free applications. This blog is on the free version of WordPress.

But free really isn’t free. There’s always a price.

As Google grows, more people register to use their free tools, including GMail, Google Documents, YouTube, and this little tool called “Search.” Yes, and it’s all free. We love free, right?

Google is a for-profit company that has a responsibility to it’s shareholders and employees. The smart engineers who write the code for these free applications…well, they need to get paid. Everyone needs to get paid.

So how does Google make money? Well, right now, they leverage the immense amount of data that they capture every time we do a search. Or they monetize the content of our emails. Or our social networks. Or our video viewing habits.

And it’s all legal and completely above board. It’s right there in their privacy policy, if you choose to read it. It’s really not Google’s fault if you dont read the fine print. Google is an exceptional company, creates a lot of great of amazing products and does a lot of wonderful socially responsible things. But all this is made possible because they also run a hell of a business.

Google, Yahoo, Facebook, MySpace, YouTube, WordPress and others offer free services with the hopes of getting a LOT of people to register. Then, they monetize it by selling profiling data about how we use their free services. (Note: Broadcast television and radio work in similar ways. Newspapers charge a fraction of what it costs to print and deliver the paper. It’s all fueled by advertising.)

Many people are thrilled that there’s a free alternative to Microsoft’s Office suite. But when you buy their software, you get a certain amount of protected anonymity. Microsoft isnt data mining information from your private Excel spreadsheets, but free services like Google Documents and Zoho can. The front end of these services are free, but they need to find a way to earn a profit. And currently that’s done by aggregating user behavior and selling it to advertisers.

There’s really no such thing as free. And with Internet applications, free is a temporary concept. Eventually, we will all have to pay.

7 thoughts on “Free Isn’t Really Free

  1. Just to clarify on Zoho: we do not sell anything to advertisers (we have no advertising on Zoho), and we do not mine user data. Our business model is simple & straightforward: free for consumers, paid subscription plans for businesses. We don’t believe advertising mixes well with online productivity tools like Zoho.

    Sridhar Vembu

  2. Sridhar,

    Thanks for the clarification. So I stand corrected on that point. Zoho does not mine data to sell search engine marketing (SEM) through companies like Google & Yahoo.

    As of right now, it appears that Zoho is pursuing a tier-approach subscription model. In the past, we’ve seen companies take this approach…and then get bought up by large media companies.


  3. Y’know, it’s worth noting that I should have Googled his name before I responded. Sridhar Vembu is the founder of Zoho.

    Now, the guy posting could be just about anyone, simply claiming to be Sridhar Vembu. I mean, this is the Internet after all.

    But if it IS the actual Sridhar Vembu, then you have to be impressed with his desire to set the record straight on Zoho. We’ll be revisiting this topic again in the near future.

    In the meantime, check out Full disclosure: I have used Zoho myself and I have no stake in the company.

  4. Buddy:

    I have to disagree with you. Purchasing software will not necessarily grant you any type of privacy. There are quite a few instances of paid software packages “phoning home” or “providing user feedback” without the user (or purchaser’s knowledge). As a point, it may be more intrusive since your purchase is tied to a tangible identity via the registration process.

    That being said, there are a tremendous amount of freeware and shareware applications and services that are built and posted for no other reason than someone had a need, wrote software or a service and decided to share it. I’m sure that those same generous souls would welcome philanthropic donations, but the work is posted with no required compensation.

    As someone who builds websites, I am also aware that everyone wants to know who is on their website, doing what, when and for how long. Unless you are astute at covering your tracks, there no online behavior that isn’t tracked-free or otherwise.

    I believe that the opportunity for people to experiment with new software, both authors and users is what makes the internet so exciting and I’m willing to give up a certain degree of privacy in order to participate.

    Great entry Buddy!

  5. It’s sad that you found a library where the staff were so judgemental. At least they did have graphic novels in their collection. As the interest in the format continues to grow so too will the collection in the adult sections of the libraries. For now, the librarians generally know that the tweens and teens are driving the circulation numbers. Circulation is what earns money in the form of grants and federal funding. That teen or YA section you looked at more than likely accounts for up to 53 percent of the circulation numbers.

    As for kids reading comics? Probably wont happen. There are kids who do enjoy the pamphlets and floppies but the larger chunk of the demographic is looking for a book. They can do the math of how much a series of floppies will cost and compare that to the final book version. They have a totally different mind set than your older collector too. They dont have the discipline to hit the comic shop every wednesday.

    Add to that, they are more often than not, manga buyers. I know there are some folks in serious denial when it comes to manga but the category is crushing sales all over the globe. If you look at the bookscan numbers week in and week out, it is dominated by the likes of Death Note, Naruto, Fruits Basket…it’s the next generation of rock and roll.

    So, you can sound like a cranky old man or you can take a look at some of the other books out there. Dark Horse is creating great graphic novels, Top Shelf, D&Q, Fantagraphics, Image, IDW….they have great books.

    Your declaration of death is very premature amigo. Comics arent dying, they are morphing into the next cool thing.


  6. John,

    I moved this quote over to the Why Comics Are Doomed section. Somehow it accidentally got posted here. It’s a great thread, so I wanted to keep it alive. Please join me in this other post.


  7. Pingback: Freemium - A Net Business Model : Words + Pictures = Web

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