Ever wonder why so much stuff on the Internet is free? What brought about such a precedent, and how do sites manage to make money by giving their products away? According to a recent Wired article the answer lies in traditional media, stretching all the way back to the Gillette "give away the razors, sell the blades" model. In the digital online age, these tried-and-true giveaway strategies are taken to realms of scale and interactivity that lie beyond simply exchanging cash for services and goods.
Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.
Central to the online freeconomics explosion are the non-existant marginal costs associated with digital content distribution. Once you imagine the world as a place in which everything is free, you have to ask yourself: what is it you're really selling? On the user-created, self-policed streets of the online marketplace, commerce isn't just about money - it's also about respect and honesty. And marketers everywhere are challenged daily to overhaul their messaging to adapt to these new, more personal currencies.