Is the web's greatest gift free content and services? Chris Wright, information architect at cScape, examines if such models are sustainable, and what can we expect in the future?
The web has changed almost beyond recognition since its inception in the early nineties. It has moved from a specialist tool for scientists to something the man on the street uses every day. Many things have driven this adoption, but one factor in particular is often underestimated - the free nature of much of the modern web.
A typical user can access a wide range of free software, services, and content online. They can manage emails and contacts lists, store and edit photo collections, and create simple office documents - all online and all without opening their wallet. Youtube, Wikipedia, and Facebook all provide very sophisticated services without charging any money to their end users.
Tasks that I used to carry out on my PC, using software bought in a big cardboard box from my local computer store, can more and more be completed online without any cost to me. Developments with technologies such as Flash and AJAX have very quickly transformed the web from a static page based medium, to one capable of offering a near desktop style experience. This transformation is not limited to software but also content and services. The original Encarta encyclopedia software struggled to complete when faced with the might of the world wide web, especially when powered by modern search engines. It faired even worse when faced with services such as Wikipedia, a model it has now partially adopted. There really has been a seismic shift, even in the last five years, in how we complete tasks using our computers and how we pay for the privilage.
Users seem to be in a win win situation but is the free world wide web sustainable?
Before we address that point lets look at one of the many reasons we are where we are today. And that's Google. Google appeared in 1998 as a search engine and transformed how we found things on the web. In these early years Google didn't really have a solid business model, and no real idea how to monetise its service. Then it launched Adwords in 2000 and never looked back. Adwords gave Google the financial muscle, estimated revenues in 2007 were 16.5 billion dollars, to branch out into a wide range of other areas. From these efforts came GMail, Google Calendar, and Google Documents - to name but a few. These products, whilst famously often 'beta' software, made people sit up and realise the web could be used as as platform, and a free one at that. Google could afford to invest in these services because of Adwords, and many of its new services have helped it to expand the reach of this advertising model.
Google may not have been at the dawn of this free web, but it certainly helped to wedge open the flood gates. Many of us would now struggle to imagine life without Flickr, Facebook, and Last.fm. More significantly Google inadvertently highlighted online advertising as a way of supporting this new web.
But all is not well. After five years of steady growth, cracks are starting to appear in online advertising. The Financial Times reports that online advertising is in decline for a third quarter. Whilst some of the bigger players will be able to ride out the storm, its clear alternatives need to be found for many. Mark Zuckerburg has already admitted he doesn't think Facebook can make money in the same way as Google has, and is looking to other avenues. He doesn't yet know what these avenues are, but is confident in time they will be found profitable.
So if Facebook doesn't yet know how to make money, what hope for the rest of the web? Clearly there must be other
options. Micro payments is a popular alternative model, indeed this is something Facebook are looking at right now. Turning this concept into a sophisticated 'virtual goods' industry, much like that in Second Life, is seen as sound strategy for many companies to adopt.
Paid for versions of services, with added features or content, is something sites like Hotmail have long used to support their user base. Many streaming music sites have started looking at similar methods. Subscriptions are also something businesses are far more likely to invest in than consumers are, so long as they get the added support and security they often require. There is currently much rumour of Twitter licensing its technology for internal use within private companies - and using the profits to fund its core service.
It is certainly a positive step forward to see alternative business models being increasingly explored. The web is ever changing, and new ways need to be found to support it. What is clear though is consumers now expect ever increasingly sophisticated software for free - and that isn't going to change anytime soon.
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