The Freesphere has been bugging me for a long time. For the technology and publishing industries it's a major challenge to see how we are going to make money out of the services people are increasingly expecting to get for free.
Fred Wilson has a challenging blog entry on his VC blog on how it can work, he also links back to Chris Anderson's latest entry in Wired.
The fallacy in all of this thinking is that free is not the entire business model. Fred himself admits in his blog comments that of the businesses he's invested in "none use it as a primary business model but many use it as a part of their business model".
Chris confuses things in his Wired piece by comparing the Freesphere with the razor blade business model where the razor is sold cheaply, or given away, and the money made on the blades.
That business model is valid and works, but it's not comparable with the current free mentality on the Internet: You might be giving away the razor for free but your customers are getting their blades from the guy up the road whose business model is the exact opposite of yours.
In fact, Chris even touches on why the Freesphere model fails by mentioning how King Gillette was unsuccessful selling his razors below cost to the Army and banks in the hope soldiers and customers would like the product and be prepared to pay for it.
That's exactly the model many of today's free services use without success. We see Yahoo! fighting for independence, the New York Times laying off hundreds and even Google's share price fell today on fears the ad revenue that underpins the free services is threatened.
The simple fact is Milton Friedman was right; there is no such thing as a free lunch. Someone, somewhere pays.
Until now it's been willing investors that have picked up the tab. If in the new era of scarce and risk adverse capital we find investors are no longer prepared to pay for providing this free stuff, then a lot of people are going to have to get used to paying for things again.
Giving away products for free can be good marketing, and there's nothing new there, but simply giving everything away for free isn't the recipe for a successful business.
Wednesday, February 27, 2008
Sunday, February 24, 2008
email ettiquette
It's funny how we get a stupid email story almost every 12 months.
The last big one was fourteen months ago with the Kiwi event manager that called a prospective customer’s wedding “cheap, nasty and tacky”
This week we get a Brisbane restaurant that dismissed a customer's comments with a "Your are an idiot we don't want your feedback."
It's bad enough it made the Brisbane newspapers but it also made the Consumerist website. This really is publicity you cannot buy for all the wrong reasons.
Once again, the moral is "think before you send."
The last big one was fourteen months ago with the Kiwi event manager that called a prospective customer’s wedding “cheap, nasty and tacky”
This week we get a Brisbane restaurant that dismissed a customer's comments with a "Your are an idiot we don't want your feedback."
It's bad enough it made the Brisbane newspapers but it also made the Consumerist website. This really is publicity you cannot buy for all the wrong reasons.
Once again, the moral is "think before you send."
Monday, February 18, 2008
IT Wire jumps the shark
Jumping the shark refers to the Happy Days episode where in a desperate attempt to boost flagging ratings a waterskiing Fonz jumped over a shark.
It's quite clear Alex Zaharov-Reutt and IT Wire are doing the same thing with their "Mac invulnerability bubble to pop in 2008?" article.
Apart from the fact the story's based on no objective evidence whatsoever, relying on a press release written around a user poll conducted by an anti-virus company that even the authors admit "is not scientific", this article is simply nothing but Digg bait.
I could give Sophos a serve too for peddling this hype, but I'm simply sick of ranting about the tactics of the peddlers of Windows security software.
It's understandable Alex would try to drive traffic to his blog with this sort of inflammatory tripe given the revenue sharing basis ITWire writers have with the publisher.
That might help Alex's bank account today but he should remember that in the long term the only currency any of us writers have is credibility. Posting junk like this doesn't help his or IT Wire's.
It's quite clear Alex Zaharov-Reutt and IT Wire are doing the same thing with their "Mac invulnerability bubble to pop in 2008?" article.
Apart from the fact the story's based on no objective evidence whatsoever, relying on a press release written around a user poll conducted by an anti-virus company that even the authors admit "is not scientific", this article is simply nothing but Digg bait.
I could give Sophos a serve too for peddling this hype, but I'm simply sick of ranting about the tactics of the peddlers of Windows security software.
It's understandable Alex would try to drive traffic to his blog with this sort of inflammatory tripe given the revenue sharing basis ITWire writers have with the publisher.
That might help Alex's bank account today but he should remember that in the long term the only currency any of us writers have is credibility. Posting junk like this doesn't help his or IT Wire's.
Saturday, February 16, 2008
Simply Selling
Computer retailers and vendors have to simplify their product lines and marketing. It's too complex for the average buyer.
Our radio show a few weeks back had quite a few callers distressed at the difficulty to buy a computer. Then an article crossed my path that mentioned business owners and managers are struggling with the same thing.
I found how hard this was first hand over the weekend when I looked at tablet computer options for a client. It's simply amazing how difficult vendors make it to research this stuff.
A special mention in these stakes has to go to Toshiba. Don't get me wrong, I like Toshiba laptops and their warranty is the best on the market. However their website and product code numbering is simply brain damaged and leaves one rushing to Dell or Lenovo.
Retailers, service providers and vendors make it too hard for buyers. Not only are there too many options, but they are dressed up in arcane terms. All they do is confuse shoppers.
It's tempting to go back to the Henry Ford line of any colour as long as it's black. Apple almost do this, for instance the Macbook Air comes in two basic models but even they lose the plot as we see with the five hundred flavours of iPod.
The industry needs to go back to basics and focus on what the consumer wants; simplicity. Believe it or not, they would actually sell more product.
Our radio show a few weeks back had quite a few callers distressed at the difficulty to buy a computer. Then an article crossed my path that mentioned business owners and managers are struggling with the same thing.
I found how hard this was first hand over the weekend when I looked at tablet computer options for a client. It's simply amazing how difficult vendors make it to research this stuff.
A special mention in these stakes has to go to Toshiba. Don't get me wrong, I like Toshiba laptops and their warranty is the best on the market. However their website and product code numbering is simply brain damaged and leaves one rushing to Dell or Lenovo.
Retailers, service providers and vendors make it too hard for buyers. Not only are there too many options, but they are dressed up in arcane terms. All they do is confuse shoppers.
It's tempting to go back to the Henry Ford line of any colour as long as it's black. Apple almost do this, for instance the Macbook Air comes in two basic models but even they lose the plot as we see with the five hundred flavours of iPod.
The industry needs to go back to basics and focus on what the consumer wants; simplicity. Believe it or not, they would actually sell more product.
Tuesday, February 12, 2008
Web 2.0 blues
One of the problems I see with web 2.0 apps is the requirement for them to be "always on". System hiccups are simply not an option.
Today we see outages with Blackberries, Gmail and Salesforce. No doubt thousands of users of all these services have had a frustrating day.
If web 2.0 is really going to revolutionize business applications as its boosters claim, then we'll need the services to be far more reliable.
Today we see outages with Blackberries, Gmail and Salesforce. No doubt thousands of users of all these services have had a frustrating day.
If web 2.0 is really going to revolutionize business applications as its boosters claim, then we'll need the services to be far more reliable.
Trend Micro joins the AV hall of shame
If you needed an example of why you shouldn't trust computer reviews, I stumbled on this gem in Australian IT this morning.
The reason it raises my ire is that I was at client's site last night where a spyware scan came up with ten separate spyware infections, including oldies like Cool Web Search and 180 Search Assistant.
That client was running an up to date, fully patched Trend Micro 2007 security suite.
Roland Tellzen, the AustralianIT writer, gives a computer security suite that doesn't detect the most common spyware a 75% mark because;
"Installation is clean and straightforward. It took less than 10 minutes to install and activate, and the user customisation screens are well-designed and user-friendly."
All fair reasons, except the thing doesn't do what it's supposed to.
I guess it's no surprise we learn today that Trend Micro is suing ClamAV for alleged patent infringement, it's so much easier to sue people than do hard work like release products that actually work.
The reason it raises my ire is that I was at client's site last night where a spyware scan came up with ten separate spyware infections, including oldies like Cool Web Search and 180 Search Assistant.
That client was running an up to date, fully patched Trend Micro 2007 security suite.
Roland Tellzen, the AustralianIT writer, gives a computer security suite that doesn't detect the most common spyware a 75% mark because;
"Installation is clean and straightforward. It took less than 10 minutes to install and activate, and the user customisation screens are well-designed and user-friendly."
All fair reasons, except the thing doesn't do what it's supposed to.
I guess it's no surprise we learn today that Trend Micro is suing ClamAV for alleged patent infringement, it's so much easier to sue people than do hard work like release products that actually work.
Tuesday, February 05, 2008
Vista service pack 1
Microsoft have released service pack 1 for manufacture which means we'll start seeing this on the shelves in the next few weeks.
The download center won't have it available for six weeks so we won't be seeing it on client computers for a while. This is a handy gap for us techs to get our heads around the changes before it's unleashed on the general public.
The next three months will be the make or break time for Vista; this service pack has to deliver the performance improvements if Vista is to shake the slur of being the "new Windows ME".
For the moment, we'd recommend holding off Vista even with the service pack until we've had an opportunity to evaluate the changes and identify potential problems.
More on our PC Rescue website.
The download center won't have it available for six weeks so we won't be seeing it on client computers for a while. This is a handy gap for us techs to get our heads around the changes before it's unleashed on the general public.
The next three months will be the make or break time for Vista; this service pack has to deliver the performance improvements if Vista is to shake the slur of being the "new Windows ME".
For the moment, we'd recommend holding off Vista even with the service pack until we've had an opportunity to evaluate the changes and identify potential problems.
More on our PC Rescue website.
Monday, February 04, 2008
Internet Explorer strikes again
The Active X flaw in Facebook and Myspace is another example of why you should not use Internet Explorer for day to day websurfing. Once again we see why using Firefox or Opera is essential for safe computing.
Another issue raised by this bug is that people are too quick to install Facebook apps, not to mention how much junk appears on the typical 13 year old's MySpace page.
The only thing that really surprises me is this doesn't more often.
If you are using Facebook or Myspace, avoid using Internet Explorer.
Another issue raised by this bug is that people are too quick to install Facebook apps, not to mention how much junk appears on the typical 13 year old's MySpace page.
The only thing that really surprises me is this doesn't more often.
If you are using Facebook or Myspace, avoid using Internet Explorer.
Saturday, February 02, 2008
An admission of failure: Microsoft's bid for Yahoo!
Microsoft's proposed acquisition of Yahoo! will only end in failure. In fact, this proposal is an admission of failure.
One of the things that's often baffled me about the business world is how one struggling company will buy out another to create a bigger struggling company. The AOL and Time-Warner merger is the poster child for this.
In this case, Yahoo! is on the decline. Their publisher network is a joke while their search and directory functions have long been eclipsed by Google. The only two things that Yahoo! does well is Flickr and Yahoo! Mail.
So the only real asset Microsoft gets is Flickr and given Microsoft's abysmal track record in integrating acquisitions we can't be sure they would be able to use it properly.
The real problem is Microsoft see the future as being online but they don't know how to get there; they simply don't do online functions well. In search, Microsoft have always struggled even in their own products, let alone with net searching.
As a response to their struggles with Google, Yahoo! have 61 products. This "range bloat" is one reason why Yahoo!'s management is struggling. Integrating this lot into Microsoft would be a nightmare and Long Zhen lists 23 that Yahoo! has in common with Microsoft.
Microsoft too have challenges with range bloat. In their flagship products; Office and Windows, there are too many versions that take too long to come to market and arrive buggy.
Rather than spend 44 bn on a declining company, Microsoft would be far better to look for the next Larry Page and Sergey Brin. Put some bets on some promising start ups being run by smart young guys.
This offer by Microsoft is really an admission of failure. Steve Ballmer and the rest of the Microsoft management have admitted they have run out of ideas and rather than take the option of developing new ideas they are just going to throw money at tired old failures.
It suits me however, I'm not a Microsoft shareholder and more competition between advertisers means better deals for us web publishers and bloggers.
One of the things that's often baffled me about the business world is how one struggling company will buy out another to create a bigger struggling company. The AOL and Time-Warner merger is the poster child for this.
In this case, Yahoo! is on the decline. Their publisher network is a joke while their search and directory functions have long been eclipsed by Google. The only two things that Yahoo! does well is Flickr and Yahoo! Mail.
So the only real asset Microsoft gets is Flickr and given Microsoft's abysmal track record in integrating acquisitions we can't be sure they would be able to use it properly.
The real problem is Microsoft see the future as being online but they don't know how to get there; they simply don't do online functions well. In search, Microsoft have always struggled even in their own products, let alone with net searching.
As a response to their struggles with Google, Yahoo! have 61 products. This "range bloat" is one reason why Yahoo!'s management is struggling. Integrating this lot into Microsoft would be a nightmare and Long Zhen lists 23 that Yahoo! has in common with Microsoft.
Microsoft too have challenges with range bloat. In their flagship products; Office and Windows, there are too many versions that take too long to come to market and arrive buggy.
Rather than spend 44 bn on a declining company, Microsoft would be far better to look for the next Larry Page and Sergey Brin. Put some bets on some promising start ups being run by smart young guys.
This offer by Microsoft is really an admission of failure. Steve Ballmer and the rest of the Microsoft management have admitted they have run out of ideas and rather than take the option of developing new ideas they are just going to throw money at tired old failures.
It suits me however, I'm not a Microsoft shareholder and more competition between advertisers means better deals for us web publishers and bloggers.
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