Tuesday, November 4, 2008

It's Free

After reading the article “Free Why $0.00 is the Future of Business” you have to agree that going free is the only way to go. The idea of “free-economics” is where companies give away their products in order to sell their name. Wouldn’t life be great if everything were free? These days’ companies are starting to give away more and more products in order to get out their name. Companies such as Gillette got their big break by giving away free razors. Cell phone companies now give away free cell phones and sell the monthly plan; video game producers make the videogame console cheap and sell expensive games.

We have even seen this trend of free-economics in our presidential election. In order to get out the vote anyone who can prove they voted was offered free Ben and Jerry’s ice cream cones, Starbuck coffee, and a free Dunkin Donuts donut.
It seems like over time items and commodities that used to cost an arm and a leg are now on their way to costing little to nothing. For example digital information and storage has become free and universally available to everyone (Yahoo and Google mail). The web has become the land of the free.

Anderson then goes on to talking about the evolution of the transistor in the computer. First off, a transistor is commonly used to amplify or switch electronic signals in the computer. Over time the price of a transistor dropped from tens of dollars to .0000001 cents. Although the computer has not dropped in its value, in order to compete companies are forced to add new features for little to nothing. “The psychology of "free" is powerful indeed, as any marketer will tell you.” There is a difference between the zero free market and the any other price market.

Over time companies started using advertising as a means to make money. On the web Yahoo created pay per page view banners and Google created pay per click text ads. Next those companies expanded with paid inclusion in search results. The example the article used was if Wal-Mart were to advertise a $15 DVD. They hope to lure you into the store so that you would not only buy the DVD but also buy a brand new washing machine while you were there.

The article also makes a key point: it’s not a free lunch because you will eventually pay for it. The way I see it is there is nothing in life that is free. You have to work for your success. I agree that whenever I am presented with something that is free I will likely accept the item. What we need to worry about is our global economy and market. Will the stock market crash because everything has become free? How will global trading be affected by the free market? I guess all these questions will be answered with time.

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