The New Internet - FREE VS FEE

In the last three months of 2000, it is estimated that over
750 dot.com businesses went out of business forever.

It was to be expected and very predictable because far
too many dot.com enterprises were riding high on
investor cash infusions, were long on promises but
produced little if any cash flow.

The promise of success never materialized
and investors wisely refused to throw good
money after bad.

No business can survive having expenses but no revenue.
Not even on the Internet.

That was the "Old Internet" business model.

You could write down an idea for an Internet business
on a cocktail napkin and get millions of dollars from
eager investors. Reality has finally set in and once FREE
businesses are changing their stripes and attempting to
charge a fee for their content or services.

Enter the "New Internet".

The first quarter of 2001 has seen a rash of companies
jumping on the "Now We Charge a FEE" bandwagon.

A wide variety of services and content that was once
delivered for FREE are now being delivered ONLY if
you pay a fee.

This includes such services as web hosting, web
site content like the current time, weather and date,
stock quotes, music files and much more.

Those once FREE services and content were able to be
provided because there was a strong advertiser base
that paid for the show we all enjoyed.

But the advertising base has faltered.

Some of the big names that now offer new premium
services include Yahoo!, http://www.yahoo.com/, eBay,
http://www.ebay.com/, and of course, the new court
ordered changes at Napster, http://www.napster.com/,
which made it a legal necessity to charge a fee for their
music services.

Bizland.com, http://www.bizland.com/, has always
provided web-hosting sites for small businesses, as
well as email forwarding, e-commerce packages and
marketing tools.

For several weeks now, Bizland.com has been alerting
its nearly 1 MILLION members that changes in their
services would soon be implemented.

Their Basic FREE service is now little more than a
Business Card Web Page, with ads inserted and a
forwarding email address.

The next step up is their Charter service which allows
members 35mb of disk space with a monthly fee of $7.95.
On top of that, there is also a set-up fee of $7.95.

It is VERY doubtful that they will continue to boast
of nearly 1 MILLION members.

Especially when you consider that there are still many
web sites around that provide the same level of service
for FREE on which Bizland.com wants to start charging
a monthly fee.

A survey in our FBCN newsletter clearly showed that
100% of our 282 respondents, would NOT pay a fee for
service or content they can aquire elsewhere for FREE.

Perhaps some online businesses can get away with now
charging a FEE for previously FREE services or content.

However, any business playing with the idea of changing
their structure would do well to research the competition.

The Internet was born on a FREE exchange of ideas.

I do feel we will NEVER see the complete removal of
all FREE based services from the Internet.

However, it is only natural to presume that some
online businesses MUST charge a fee or cease to exist.

Which ones will depend on the unique type of
service or content that they provide.

However, I predict that the most valuable properties
online will be those that have a business model based
on BOTH FREE content and services, but with FEE
based content and services that are much more enhanced.

The promise of a FREE service or content will continue
to drive traffic to a web site. Once there, visitors will
be given the option of paying to receive PREMIUM or
ENHANCED service and content.

That will be the nature of , "The New Internet".