A Relevant Thought About ‘Free’

This week we learned that Samsung will be the latest Android licensee paying huge royalties to Microsoft, and a general sense that the final nails in the ‘Android is free’ coffin have been hammered.

We also heard the uproar about the Spotify-Facebook linkage, and even though Spotify now has a ‘private listening mode’ they still require a Facebook account and connection.

Finally, Facebook itself has gotten criticism for its practice of tracking users even when they are logged out of the service! This is yet another security issue for online services, something I talked about in Invasion of the Super-Cookies.

Yet none of it is surprising – or at least it shouldn’t be.

The thing to remember – pretty much every company in existence is trying to make money. The larger the company, the more employees it has, meaning more payroll and benefits and facilities. If the company makes a physical product that also means manufacturing facilities and so on.

Look at some of the big players in the tech news related to this article: Samsung, Microsoft, Motorola, Apple, Spotify, Google and Facebook.

With companies like Samsung, Microsoft, Motorola, Apple (and Dell and HTC and HP and on and on) things are pretty clear: they design and manufacture products, you buy the products, they make profits to overpay executives and keep the cycle going.

Even with Spotify, they offer a service you need to pay for in order to use fully. There is a limited ‘free’ mode – but as time has progressed and the need to pay publishers for music has become more pressing they have pulled many features from free – and it is also largely funded through advertising … and those of us who are paying $9.99 per month.

Then there are Facebook and Google. I have been using Google for search since 1999 and for email since 2004 and for documents since 2007 and for a social network since this summer and much more … and I have NEVER paid Google ANYTHING for any of their services. Nor am I doing anything illegal by NOT paying them. Similar with Facebook, I have been a member since 2007, yet haven’t paid anything for the time I use, the photos I store, and so on.

In fact, pretty much NO normal person is paying Google or Facebook ANYTHING and yet would count them as part of their daily life. My wife every morning opens her laptop and clicks on Google Chrome to check her GMail and Facebook while having her first sips of coffee.

And yet Google has revenues of ~$27 billion and Facebook ~$4.7 billion. Yet how are they getting all of this money? The easy answer is ‘advertising’ and in the case of Google through corporate tools (still a minor fraction of revenue).

But the real answer is in the comic above – Google and Facebook are not selling TO you, because YOU are NOT their customer! YOU are the PRODUCT that is being sold to the highest bidder.

Something to think about when you assume that since the Facebook tracking thing isn’t in the news that it must have been resolved …

Source: Consumerist

Categories: News

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1 reply

  1. Good points that need to be re-iterated every now and then since we humans forget so quickly.  Oddly It’s like a theme running through my RSS feeds today.  Just noticed the FT had a nicely done opinion piece on the subject as well. http://www.ft.com/intl/cms/s/2/ff69e0f0-e976-11e0-af7b-00144feab49a.html Though theirs focuses mostly on Facebook rather than the general privacy/lack of privacy of the digital world.