Free internet depends on your spending: oops!
byOct 16th 2008 11:00AM
The free internet is built on a house of cards. Sites such as this blog offer you the free content you want, accompanied by ads. Some of you follow those ads, to buy the product advertised (thanks). The company that makes the product pays AOL for more ads, which it uses to keep WalletPop chugging along. So what happens if you quit buying?
The house of cards collapses. The pharmaceuticals industry is already seeing diminishing returns on its $5 billion plus advertising spend, and is pulling back. Look for cost cuts in the network national news programs, reflecting the lower response to ads from the incontinent, the impotent, the artery-clogged and the chalk-boned.
Newspapers are another good example of what happens when ads dry up. Many papers have let go staff, cut back on features, or closed their doors altogether. In television, the reality-show infestation reflects the network's need to cut costs as ad dollars dry up.
The internet is similarly threatened. Sites like WalletPop are ad-supported, and if you quit responding to the ads surrounding this post, how much longer would this site remain viable? If you've become accustomed to watching video entertainment, ask yourself how long Hulu.com will last if viewers quit buying in response to the sidebar ads? Same thing with YouTube, Facebook, Engadget, or the Huffington Post.
Google is perhaps the most threatened, as it derives the most cash from ads on its search feature and the many other programs it offers to help individuals and companies monetize their sites. If Google falls short, how long can it continue to offer the features I use every day; Mail, my web site hosted for free by Googlepages, Google Docs, Reader, Notebook, Grand Central?
How much will the internet cost if sites are forced to reinvent themselves as pay services? And how much longer can consumerism continue to carry the cost of what has become an essential service? It appears that we may be about to find out.