Mar 16, 2009
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There have been several business models around and some have changed over time due to the economy and nature of the business. One of the more popular business models of late is the FREE business model which is where companies give things away for FREE.
What was once used as a gimmick has now become a whole new business model and there are several large corporations who are changing their business models over. At one time giving away something was a very radical and outlandish idea that was not heavily considered.
Since the internet has come to life the model of giving things away for FREE has become more mainstream as internet marketers have tried several ways to get people to give over their information and their money.
Consumers always love getting a good deal and their interest is more peaked when they hear that they can get something at a discounted price or even FREE. There are several offline industries that are doing this more and more as time moves on.
The cell phone industry is practically giving away cell phones that are accompanied by 2 or 3 year contracts. The shoe industry is constantly running their BOGO deals which means “buy one get one”. This means if you do buy one then they will give you another one at a discounted price or even give it to you for FREE.
The internet is surrounded by FREE things. Think about all of the software that you use on your computer that you did not have to pay for like browsers and email. Yahoo recently announced an unlimited email storage just like Google has for their Gmail.
If you are using all of this for FREE how are these type of companies making money, by advertising. In a recent interview that Chris Rose performed with the CEO of Google, Eric Schmidt, he said that 98% of Google’s revenue comes from advertising.
When you give something away for FREE there are several people who will want to jump at the opportunity to get on your list. When there are enormous amounts of people in your database that highly attracts advertisers and marketers.
Giving away incentives using the “F” word can be very lucrative and a very powerful business model. Here is a great article on Wired about the FREE business model that you might like which talks more about “freeconomics” including a video.