Tuesday, June 23, 2009

The Danger of Free Lunch

When the Internet first captured our imagination, dotcoms were popping up all over the place, each one with the goal of offering free content or services, and then - once they had the "eyeballs" they would create revenue by selling advertising.

But it didn't quite work out that way. When the advertising model didn't pan out, very few dotcoms were successful in making the transition to a pay-for-services model, so they could not sustain themselves. Hence, the "dotcom bust."

With Web 2.0, a new generation of companies with that same dream has emerged. But according to The Economist, "The number of companies that can be sustained by revenues from internet advertising turns out to be much smaller than many people thought."

Is Internet history repeating itself?

As associations look for the opening in all this, and work with how to remain relevant enough to command membership dues in a world of free content and networking, it behooves us to gain insight into what Silicon Valley has learned over the past decade about whether there is such a thing as a free lunch.

Questions for discussion:

How is your association dealing with the pressure from online competitors to provide content and services free of charge? Where do you see the trend going? Where do you see it leading your organization?

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