Freeconomics

[firewalker 10]

First we had freakonomics, now we have freeconomics

 

"The rise of "freeconomics" is being driven by the underlying technologies that power the Web. Just as Moore's law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero."

 

http://www.wired.com/techbiz/it/magazine/16-03/ff_free

 

What happened to the classic TANSTAAFL?

[BlowFish 10]

Note it is the cost of doing business i.e. overheads. Actually the statement is flawed the 'web presence' is just a small portion of the cost of doing business. The largest portion will always be things like staff power transportation (presuming you deliver something physical). Flawed thinking and logical fallacies, all well and good but you expect better from 'academics'. Having said the I enjoyed the book when I read it

[firewalker 10]

Note it is the cost of doing business i.e. overheads. Actually the statement is flawed the 'web presence' is just a small portion of the cost of doing business. The largest portion will always be things like staff power transportation (presuming you deliver something physical). Flawed thinking and logical fallacies, all well and good but you expect better from 'academics'. Having said the I enjoyed the book when I read it

 

The book 'Free' isn't published yet, so how come you've already read it?

 

Nowhere in the article does Anderson deny there is a cost of doing business (for example technology, bandwidth, storage*), but what he's talking about is that these costs are being carried by a third agent. And from the consumer's point of view, he is getting a free lunch.

 

Just look at the websites of newspapers; here in Belgium we might not be early adopters, but the biggest national newspapers have all made 75% of their printed version available online for free in the last couple of years. Apple threw DRM away just couple of weeks ago. Google Books, Scribd, ipaper,... But examples are abundant really.

 

What logical fallacies are you talking about?

 

(* As for storage in everyday use, look at the prices of SD memory cards the last couple of years...)

[BlowFish 10]

Ahh OK my mistake I thought it was from freak...that was the one I enjoyed Seems to me that to conclude the costs of a business are going to approach zero because of plummeting 'IT costs' is a non sequitur. It conveniently ignores the other costs of doing business.

 

Even assuming these companies can get there costs close to zero (can't imagine customer service will be up to much ) the majority of companies will still need to produce 'stuff'. Of course everyone could become third agents I suppose but without stuff to sell I don't suppose they would last long.

 

I wonder what ebay's balance sheet looks like? That has to be one of the closest models to what is being talked about? It would be interesting to compare them to other webcentric companies (google maybe) that actually produce things.

[firewalker 10]

Ahh OK my mistake I thought it was from freak...that was the one I enjoyed Seems to me that to conclude the costs of a business are going to approach zero because of plummeting 'IT costs' is a non sequitur. It conveniently ignores the other costs of doing business.

 

Ah yeah, Freakonomics, fun read as well

I think the author kind of stole his title from Levitt in this came!

 

Most important from the 'free' point of view, is that it will come without an additional cost for the consumer, at least not a monetary cost. But I think that's something that has been going along for a while. Take webmail for example, for as long as I can remember most popular webmail providers have been free, with the possibility of paying for a premium version (more storage, pop3 connectivity, SSL...). But nowadays the premium has also turned free (unlimited email storage), so I wonder how far can we go?

 

Also interesting, was this interview:

http://globeinvestor.com/servlet/story/RTGAM.20080505.wranderson05/GIStory/

[BlowFish 10]

Ha thats interesting my vantage point was pretty much from the point of view of the business rather than the consumer

 

This guy http://www.amazon.co.uk/Logic-Life-Uncovering-Economics-Everything/dp/031602757X/ref=sr_1_3?ie=UTF8&s=books&qid=1232112262&sr=8-3 is my next door neighbour similar but different sort of thing.