Is the Internet a Free Lunch?
Wednesday, March 25th, 2009

In a traditional sense, people will purchase something when they believe that the value is greater than or equal to the cost of that item. Let’s take an example, I go to the store and see a shirt for $10. I like the shirt and would like to own it. I pay the $10 (plus tax) for the shirt and now it’s mine to wear as I please.
I think that I’ll get value from the shirt, so I buy it.
The Internet, provides value to lots of people for a variety of purposes. Aside from e-retail sites like www.Amazon.com, most of the value is provided in the way of content. In this case, I’m not using the Internet to buy a t-shirt, rather I’m using the Internet to communicate, learn, find information, be entertained, etc.
This brings me to the question…why don’t more companies charge for the value that they provide to website visitors? I’ve been with www.hotmail.com for over 10 years. In that time, I’ve enjoyed a tremendous amount of value from the service. I’ve sent and received countless emails and it’s been a wonderful tool. At the same time, I haven’t paid www.hotmail.com one penny for this incredible service. In this situation, I get value, but I don’t pay for it.
There are lots of websites that I greatly enjoy, but never pay for. The Internet has adopted a free lunch approach where most websites just give away their valuable content.
My websites (www.CareerTreeNetwork.com) are no exception. I give unrestricted free access to job seekers and also have a free service level for employers. Revenue is generated from employers who want additional exposure and access to site visitors and elect to pay for an employer membership. The membership is a fancy adverting package.
I believe that people have come to expect free access to on-line content. Why should I pay to watch on-line videos when I can go to www.youtube.com and see them free? Why should I pay for news when I can go to www.cnn.com and get it for free? Why should I buy an encyclopedia when I can go to www.wikipedia.com and get it for free?
This leaves content focused websites to primarily earn money through advertising. And with so many websites out there, competition for those advertising dollars is steep.
At the end of the day, I question the long term economic engine of the Internet. If people are unwilling to pay for valuable content can the Internet really survive as a viable place to do business?
