Since the response to my question on which services you’d keep using if they weren’t free - and yes, it was primarily a question - has been great, I’ll call it a successful poll and post the results here.

Let me just emphasize a couple of points which might have been misunderstood in the original article.

It’s naive to think that asking this question is bad because it’s giving the owners of these services the idea to start charging for them. People who sit at Google and Netvibes and Yahoo headquarters know very well what their business options are, and there’s a very good reason why they’re offering these services for free. The question is, however, worth asking, because this situation may change in the future. Users’ dependency on online applications will grow. AdSense might not always be the major driving force behind the Web 2.0 phenomenon.

Secondly, sometimes free is not really free. If you’re a working man/woman, then time is money. Whatever saves you time, earns you money. Whatever wastes your time, costs you money. If it takes considerable time and effort to switch from one free service to another, then the cost of switching is not zero any more.

Example: let’s say you’re using Gmail every day. It’s your primary e-mail reader. Would you rather give $5 a month for this product, or would you transfer all your mail to another product and having to change your address, and spend days learning the intricacies of this new service, discovering that many of its features don’t work quite as they did in Gmail? I’m not saying that there’s a correct answer here. I just wanted to know what the answer was.

So, to rephrase my initial question: which free services and products that you are using now are valuable to you in the sense that you would pay a reasonable fee to be able to keep using them? (just to clarify, i was referring to online applications & services, but some readers also named free desktop products in their lists)

Although some readers said that they wouldn’t pay for anything web-based, which is perfectly OK, many readers did name a couple of services and products they find valuable enough to pay for them. Here’s a top 15 list, extracted from the comments in the original article:

1. Firefox (12 votes)
2. Gmail (11 votes)
3. Digg (9 votes)
4. Google Search (8 votes)
4. Wikipedia (8 votes)
6. YouTube (6 votes)
7. Wordpress (5 votes)
8. Feedburner (3 votes)
8. Blogger (3 votes)
8. Technorati (3 votes)
8. del.icio.us (3 votes)
11. Adium (2 votes)
11. Netvibes (2 votes)
11. Google Reader (2 votes)
11. Flickr (2 votes)

Some runners-up, taken from the comments on Digg, are Slashdot, Fark, Opera, Google Analytics, and IMDB.

Some conclusions

What have we learned from this discussion? First of all, many users still cannot accept the idea of paying for online services and online applications. This is hardly a surprise: if it were any different, then many Web 2.0 startups would have a subscription-based business model, something which is currently a rare occurrence.

To understand why this happens, we must consider why these same people have absolutely no problem paying for desktop applications. The price tag on non-free desktop applications is a derivative of many factors, some of which are:

- intrinsic quality of the application/service
- robustness and quality of the platform the application/service is based on
- the potential value the service/application can create
- customer support

It’s easy to understand why online apps are not quite there yet. Their platform is the web, and it’s definitely not as robust as your standard desktop/network environment. Also, many online applications are just ‘light’ versions of full desktop applications, which creates the notion that they must be free.

In this light, the above list makes a lot of sense. People would be willing to pay for either quality desktop applications (Firefox), great blogging platforms (Blogger, Wordpress) or online applications which provide value that cannot be replicated with a desktop app (Flickr, Google Search, FeedBurner, Technorati). They are also willing to pay for services that provide quality information, like Wikipedia or Digg, and many of them would be willing to pay to keep the quality of these services on the current level.

There are a lot of valuable lessons to be learned here. Online applications that seek for business models other than advertising cannot be just online copies of desktop apps. It just won’t work until they are really better than their desktop counterparts, and until the web as a platform offers sufficient security, privacy, storage, speed, reliability and robustness. Applications like Picnik or Zamzar are nice, but people will use them if and only if they’re free.

Secondly, the community increases the switching cost. No wonder Firefox is topping the list: many people cannot imagine switching to any other browser, not only because Firefox is very good (Opera is good, too), but because of the thousands of extensions which cannot easily be replaced (this is illustrated well in the comments on the original article, where many users named some Firefox extension as a product worth paying for). Digg, Wikipedia, YouTube, Flickr, Wordpress - sure, there is an alternative for all of these, but the community around them is strong, and the community adds the value - be it in Wikipedia’s numerous articles, quotations and corrections, or the many Wordpress plugins, or YouTube’s millions of videos. You can switch from Digg to Reddit (or vice-versa), but you lose your friends, your diggs, your comments - and all those are worth something. You can switch from Flickr to some other service, but Flickr has all your photos and all your friends photos, and all of your friends’ friends photos, and you cannot move all that with you.

Thirdly, in the world of online applications and services, being first means a lot. Much more than in the realm of desktop applications. Many companies were the first and the best with their desktop application (remember Netscape?) but they lost it all when a better or a cheaper app came along. However, when you’re the first to create a popular online application, and it results in a thriving community, runners-up will have a hard time catching up. The community is the added value you cannot simply conjure out of thin air, and no amount of funding can help you there.

All this makes for an interesting future as far as online apps and services go. There is still no clear business model for them to adopt, and although there are some signs showing the way, no one has the guts to make the plunge. A huge majority of services will obviously have to stay free, for reasons stated above, and keep working with an advertisement-based business model. But as Web 2.0 applications become more and more complex, robust and usable for business purposes some of them will not be able to survive on ads alone, and will be forced to pave a new way. Google will definitely be a forerunner here. Its introduction of Google Checkout is no accident - it will most probably be instrumental in monetizing many of their services. With their Google Apps Premier Edition, which costs $50 per person per year and is aimed at business users, they’ve made the first tiny step. They are offering the same thing free but if you want support and reliability, you must pay a reasonable fee. We’ll see if they’ll succeed in convincing the world that sometimes, free is not the best choice.

This entry was posted on Sunday, February 25th, 2007 at 7:30 am and is filed under Web, Web 2.0, Features. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.