Consider the blogosphere for a moment.
Gartner forecasts that blogging will peak in 2007, leveling off when the number of writers who maintain a personal website reaches 100 million. The firm estimates that there are more than 200 million former bloggers who have ceased posting to their online diaries, creating unwanted objects on the Web.
It was reported by Chinese media Xinhua that the blog of Xu Jinglei received more than 50 million page views, claiming to be the most popular blog in the world.In mid-2006, it also had the most incoming links of any blogs on the Internet.
All of these blogs provide insight, commentary or topical content on the net for free. Many, if not all, envision making money through advertising using such engines as Goggles adsense and other related ad insertion engines that match ad content with the blogs topic matter. Income from advertising usually doesn't amount to much, certainly nothing considered worthy to support the definition of a business.
Now consider the medium of forums, the most popular being Yahoo Forums. Over 60 million different forums have been formed on Yahoo covering a vast variety of topics. Again, participation and moderation are free.
Blogs and Forums are mediums which enable people to connect with topics and to express themselves interactively.
Enter Social Networks
The medium of social networks brought a new dynamic to the web. People connecting with people. As previous discussed, there are over 500 million people registered and growing in one or more popular social networks. For the most part, with exception of upgrades for different features and functions, participation in social networks is free. The operators primary income driver is advertising. Thus the larger the community the more potential for advertising revenue.
Technological advances within the medium of social networks are enabling the integration of blogs, video, images, instant messaging and every kind of self expression tool imaginable. Social Networks are becoming the aggregators of self expression using whatever medium an individual desires for whatever purpose. Again, for the most part, all for free.
Free precedes commercial activity. Many are creating new economic models for social networks beyond advertising. However, the successful models are those which strategically think about how to convert "free" to economic gains and what value precedes commercial activity. In the follow-the-free economy that seems to precede commercial activity on the net, everyone must keep the community engaged because nobody is able to make a living from it on their own.
What are you giving away for free that represents value to a community?
What is the closest you can come to making something free, without actually pricing it at zero? Or, in a true gesture of enlightened generosity, you can figure out how to part with something very valuable for no monetary return at all. If either strategy is pursued with intelligence, the result will be the same. The network will magnify the value of the free you provide. But giving something away is not usually easy. It must be the right gift, given in the proper context. To figure out what to give away, consider these questions:
- Is the freebie a value added idea, insight or knowledge desired by a community? There is no power in the gift unless it is crucial to your business. Have you thought beyond the "free" and how it will or could become a commercial product or service in The Relationship Economy?
- What virtuous circle will this freebie circulate in? Is it the loop you most need to amplify? What segment of community do you aim to serve?
- In the long run, the unbounded support of a customer is more valuable than a fixed amount of their money. How will you eventually capture the support of customers if there is initially no flow of money?
The rules of The Relationship Economy are driven by the theory that free will inevitably illuminate all kinds of beneficial attributes that were never visible before. "Free" has long been a taboo price point. Perhaps because it has been forbidden, many low-hanging commercial fruit are waiting to be plucked by giving the free serious consideration.
What say you?
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