The Problem with Free Web Content

Introduction

In the late 1990’s when the Internet boom caused the saturation of the dot-com companies, business models were focused on targeting users at zero revenue. Market strategy consisted in investing in all the effort in technology and developers to build platforms on the web in order to attract more and more customers; however the concern of gaining profits was placed in the background (Wikipedia, 2010).

Dot-com companies like Hotmail and Nupedia did not get any profit in their first years of operations. While Hotmail spent capital on extending its users adepts by granting email accounts for free, Nupedia struggled to invest lots of capital in professionals - editors, writers and academics. This will maintain constant updates of their free online encyclopedia updated (Geuss, 2010). These events led to the prejudices we know as the dot-com bubble whereby many companies went to bankruptcy like Nupedia, others had to be sold out like Hotmail and the rest were forced to reconsider their business model. Perhaps this was the first catastrophe registered on the Internet caused by the impact of “free content” phenomenon. Consequently some survivors to the bubble bust like Google, Amazon and Microsoft would apply different strategies to maintain their life on the network but not precisely giving everything for free.

This chapter seeks to discover the consequences of the distribution of free content in the digital media market on the web, based on the perspective of the players (customers, authors and media companies) and the application of the concept of “free”.