The free internet era is gone

A few days ago, Qihoo 360 company again into a war of words. February 26, "The Daily Economic News" published "360 Black Box Mystery", the article on the so-called Qihoo 360 "cancer" of the gene, and 360 at the same time accused the report is really insulting the safety of a number of 360 of its products, and said the prosecution of the daily economic news.

The above paragraph is the first of this article, but Black Horse today does not go to discuss the dispute about the dispute, but the recommendation of the founder of NTA, "entrepreneur" magazine former editor @ Shenyin a good article "free end." This article interprets 360 free models that survive and end the traditional Internet ecology and make it enemy. Internet entrepreneurs may be able to understand the mystery behind the war of words, perhaps to get a lot of inspiration from it!

The following is an excerpt from the article:

Once upon a time, it was a penguin butler wearing a scarf, at first you rely on it to pick up the chicks, then it helps you send text messages, play games, transfer documents, watch videos, open mailboxes, buy things ...

Once upon a time, he was an IQ of 250 of the 110 police, first initiative for you to block the rogue, and then the obligation to repair your system, kill virus, tube files, look at the Web page, select Download ...

They are willing to do anything for you, you are big Grandpa milk, not customers, do not pay, no transaction, hand over the key to worry.

Until one day, two "live Lei Feng" fights each other to compare who is more qualified to take care of our safe.

The user can be represented, does not represent you I should be fooled. China's internet installation of the first large and second-largest clients, have vowed to permanently free, all say, "User benefits First", why has caused the internet has been the most of the world's biggest war?

Because "free".

"Free" has long been a common sense in the Internet industry, and since the previous two years, Anderson, head of Wired magazine, wrote a masterpiece that everyone thought was the law of business success in the digital web age. The CEO of every internet company will tell you that the marginal cost of all the information products is zero, so our price is zero at all.

It seems to be true, ten years on, the global Internet success story is almost entirely free of products and services to attract a large audience, and then through advertising, or value-added services or other virtual product fees to achieve success, Yahoo has come to this, Google came to this, Facebook has come so far, as for Sina, Shanda, Baidu, QQ, Alibaba Taobao and so on are all the way to the fore.

In China, the "free" economy seems to have a richer commercial soil than the US. The original content and the protection of intellectual property have never really helped the practitioner to make a lot of money. Greedy plagiarism and duplication, but can bring a steady stream of income; consumers like gifts, piracy and cottage, there is no luxury to quality, enterprises are unwilling to pay for any software and services, do not care about the legal risks, the means of payment and credit system has not been perfected, offline charges are not easy.

What else is better than "free" fig leaf? What are they doing under a fig leaf, do you really know? Free "Can you continue gelivable?"

Dangerous free

When QQ eats meat, 360 is doomed to only with others rob Soup.

The first dark side of the free will inevitably bring a single big one. Because of the network effect, as long as the water lilies are filled with ponds, the following algae will be hard to get the sun. Google's CEO, Schmidt, once confessed: the problem with free is that it excludes all price discrimination structures in the market, often resulting in winners take all.

Google has become the search technology company most users use, and other searches, no matter how technologically advanced, are hard to shake. Video sharing industry out of a Youku, burned 160 million dollars to achieve a not yet make money also has 3 billion U.S. dollars market value of the company, because the lawsuit is not late on the potato value is not less than 1 billion U.S. dollars, as for cool six nets only 200 million, there are 3-400 of the money burned out, do you think this is to create value or destroy value?

Finally, you will find that the Internet industry to create a large company, far less than other traditional industries. Small trees are hard to live under the giant wood. It is not a normal business ecology to rely on the free form of an oligopoly economy. The content of traditional media, through the free channels such as Sina and Baidu, get the most effect of the user attention, but the value of advertising is directly after the two river closure, and users also reduce the purchase of paid paper version. As a result, content vendors are unable to pay high production costs and can no longer provide high quality content.

The second dark side of free is the extremely low cost of user migration, which is the result of zero user selection cost. As a result, the winners have to try their best to circle the users in a variety of applications.

It is not easy to build your own competitive barriers on a free basis. Free is not without cost, the forerunner in order to promote free, have to spend a lot of money, and in order to maintain the barrier, still have to spend more money, let later cannot surpass.

In free mode, all the weaknesses of human nature, will become a breakthrough in making money. Free mode will earn more profit than the charge. You really have the nerve to let own QQ image to wear a briefs to talk with the person naked?

As the wise man knows, fortresses are often not breached head-on. You want to do a ray of IM software, QQ will not copy you. But any other client could be its fatal backdoor.

So, don't scold QQ plagiarism, this is a kind of subconscious "knee jump reaction" completely. It will certainly prevent any company that attempts to capture its users through a free client. Just let the user's attention flow to their own control of the site. And those who are free software will find it hard to get through business models to sustainable profit models.

The third dark side of free is that it is likely to undermine all commercial foundations: credit.

No one will always be Lei Feng, how much you get for free, how much you will lose accordingly. Losing money is trivial, losing your privacy and life is a big deal.

Indeed, companies still have the potential to collect customer information in a paid business model, but they can only better help it analyze the behavior of the user's purchases, not the source of their main revenue. In the free mode, you are only users, not customers, enterprises do not have to worry about the risk of contractual relationship. They have a strong incentive to search all the privacy and sell it.

Wei, a communication scholar, in the article "Behind the Privacy", cited a well-known domestic SNS privacy policy: "Commitment will not be without access to the user's personal information information to rent or sell to any third party, but the following circumstances: Site found that you violate the terms of service or other use of the site rules. In other words, if you violate some of the rules of the station, your personal data is entitled to be sold.

We still have trust in Google. Because it has a public commitment to "not be evil", and to prove it, even to give up some countries ' markets.

But for the Chinese Internet industry, which cannot charge users directly, one of the most realistic ways for companies to achieve revenue is by scanning and collecting user information, achieving so-called "precision advertising", or selling information to others. And there's no need to worry about being punished.

For QQ and 360 security such installed capacity of hundreds of millions of software, its hundreds of millions of users in China computer information and user behavior, has become the basis for survival and development of these software.

Behind the privacy is the commercial interests, is the advertising value. The free mode of greed for user privacy will go far beyond the charging model. If the next generation of the Internet is a human-centred social network, then there will be more and more predators staring at our exposed privacy.

You and I don't know how much value we have, but they know. Don't think we take advantage of them for free, but they steal personal information that we could have sold at a high price.

Free, not only expensive, but also dangerous.

Paid Internet

When I saw the ipad version of Wired magazine this summer and didn't blush to mark the 4.99 dollar price in the App Store, I realised that Mr. Bald was ahead of us.

Fees--free--charge, this is actually a "common sense" process.

Mobile Internet, real name social media and E-commerce, the next 5 years the development of the Internet three main themes. Together they prove one thing. Is that the virtual world is more and more integrated with the real world. In real life, free is just trial, the charge is the normal.

We do not have to split the personality of half in the real world hard to earn a living, half in the cyber space. On Facebook and Sina Weibo, we are increasingly building real-world relationships through genuine-name authentication. The accumulation of personal credit in the Internet community makes it possible to pay for it.

The mobile phone hides almost all of our life secrets and personal information, through which we reach everyone's social network and spend more than 2/3 of our lives. and electronic commerce not only means the information flow and capital flow, the trinity of logistics, but also "online 2 Offline" (online and offline combination). No charge, you are not at ease.

It is quite possible that the inflection point of the "free Internet" era is coming.

Think about what is the hottest Internet model this year (2010), apart from Weibo?

is a group purchase. Groupon, which was founded in November 2008, only took two years to create a 6 billion dollar acquisition valuation. The fastest breakthrough in the history of 50 million U.S. dollars in monthly turnover, 50% gross margin, 30% of revenue growth. At home, the handle, the United States such as imitators, has reached a monthly turnover of tens of millions of yuan, 30% of the net profit, such a business is very sexy.

This is a typical paid business model, and is the best "prepaid" mode. Through a large discount to mobilize the rational purchasing power of consumers, one day a group of time to buy is the most direct perceptual stimulation, users must first pay after the service. It's not selling ads, it's selling customers directly.

The traditional photo studio was changed by group buying. The original is to take a set of thousands of yuan, one day will take two or three single live. The last time you buy, you can bring thousands of passengers. Even if the price is only 1/5, the passenger flow may be 10 times times the original. Local life services like this can be changed by group buying.

A new generation of consumers with whenever and Gen-A will be more willing to spend money on the Internet. In the past decade, the backbone of Chinese society has been indifferent or even hostile to the Internet. Young people who dare to embrace the Internet are not financially well-off.

Now, it is their turn to become the stream of society, the creators of wealth, but also become business decision-makers and executive level. They are the digital generation and have no fear of the Internet. They have seen how hardware products are diving, and are willing to pay for the contents of "Harry Potter", "The Ming Dynasty," and "World of Warcraft", and they are genuine.

Their businesses are accustomed to buy Alibaba's integrity, Baidu keyword, Taobao mall location, they understand that E-commerce is the future of business. And as the Internet releases huge user needs, the company's background it ability to form a force. At this point, does the business-class software related to cloud computing have a big development?

Have paid treasure, have net silver, have Lakara, have Q currency and point card, although pay still some trouble, but already not so unbearable. In a closed systems such as mobile apps, App Store, the view can be quickly converted to income. The problem is that the city's young people have been spoiled by too many free products for years. Even if they bought a iPhone4, their first thought was "jailbreak".

If the traditional internet is from elite to grassroots, then the mobile Internet route is from the grassroots to the elite. The "fragmented Internet" is likely to be more fragmented and socially marginalized under the banner of paying. This is not a bad thing, because the Free + advertising model is set up to meet as many users as possible the most common needs, only led high-end users pay, most people watch ads. And the user pays the pattern is the deep excavation specific user group market demand, intensive cultivation. It turns out that mobile internet companies like Skye, which revolve around Shanzhai machines and wage earners, are more frightening.

There is no doubt that Apple and Amazon are the two companies that are now playing the ultimate role of "paid Internet". Around the ipad and the Kindle, they are reshaping the value chain of the content industry, with the core of giving users a more timely and enjoyable experience than free, allowing content producers to get the money they need.

User Selection

For the past 6 months, I've spent 20 dollars a month on my ipad, paying with two-currency credit cards.

This is not an astonishing number. has not affected my quality of life. This is about the same as a couple at the Beijing Wanda Film City to see a large amount of basic expenses.

But this is only 20 dollars, let me exempt from the guilt of free piracy. In fact, I would enthusiastically use every paid software I downloaded. and mercilessly erase the free software that is unsightly.

What age is it now? Information excess, material abundance. Because we have a surplus, the result is impossible to choose. In psychology, paying a dollar and not paying for money is the essential difference. Charging means the cost of choice. Once selected, it means the establishment of a relationship of interest.

I asked myself why I had not been successful in charging me in the past. Products are not good enough, the purchase method is not convenient, the price is unreasonable;

Now these problems are basically no longer the problem. The key is, why do users choose?

The first is "scarcity". Ma believes that not to be intimidated by "free", with a "scarcity" of weapons that break free spells. Not all valuable things can be found in the market price, such as air for everyone is very important and valuable. But no one is buying and selling the air.

A way to create scarcity? The first is to have a large number of long-term brand investment and word-of-mouth dissemination, such as LV, such as the Beatles, such as Feng Xiaogang. The second is to create a unique experience that cannot be replicated, like the ipad, where customs fines cannot be stopped.

The scarcity of the digital age must be created, and is limited. Like blockbuster "Avatar", only in the IMAX screening Hall can see the shock effect. What if there is a high definition of piracy? It's a month or two out, still in line. If not a ministry shout stop, 1.7 billion domestic box office is definitely not a period. Michael Jackson is dead, he left the unpublished songs, sell one less one song. You're a big fan, don't you remember?

Second, there is the "time cost". What's the most expensive time cost in 2011? To sell his itunes, Jobs said something vicious: "Your average income is lower than social average wages in order to not pay for music." It doesn't work in China, and many of the music that China pays for downloads are workers at Foxconn's factories. Why? Because they have to make money to work overtime, did not see the "non-interference" time, did not Taobao time on Baidu. At least have a mobile phone, can relax after work to relax.

Where is the other place to pay for the song? It is a matchmaking dating site century Jiayuan, for the first timetable white mind, potential lovers to the song as a virtual gift, selling songs became one of the important income of the site.

"If you want to pay", don't take money for money. Facebook, the world's largest social network, recently launched its own virtual currency system (Facebook credits, is it a bit like Q-coins), users need to first use cash to buy this "credit", 1 dollars is equivalent to 100 credit coins (inflation, money is not worth it?). After buying the appropriate number of credit coins, users can give their friends a number of credit coins, the recipient of Facebook users will be used to improve their "prestige level", but also to buy the virtual gifts Facebook offers. Users can also purchase virtual goods from millions of Faceboo application partners in this credit coin.

Although Facebook has to deduct 30% from a single payment, the small and convenient "credit coin" will still significantly increase the number of users paid in games and other applications. Ray Valdes, a research firm Gartner analyst, estimates that the billing model could have a 1/3 share of future revenue for Facebook. That means Facebook does not need to rely heavily on revenue from online advertising. In other words, Zuckerberg doesn't have to rush to sell our privacy.

"The user participates in the labor", the laborer consumes own labor fruit. Why is the farmer's vegetables and fruit fish more expensive than the Wal-Mart at home? People have to drive to the suburbs, their own hands to pick their own money to sell. Because the user is not satisfied when a cosumer (consumer), to be a prosumer (production consumer).

Is Li Yuchun the most beautiful female star to sing? Absolutely not. But she is the most popular actress to pay fans. Why, she is tens of millions of corn to send a text message one vote. At the beginning of Chinese network mode, the most cattle writers will receive a reward from fans to encourage them to write more quickly. This creates the pleasure, is cold of Baidu Library can not solve. It's not how much the fans are, it's how you mobilize the 10,000 fans to make money for the stars.

Users do not want to pay online, but also want to play games to buy pets how to do? Zynga, the biggest gaming developer on Facebook, has a tough move. As long as you agree to help his advertisers fill out the form, or go to the corresponding electric dealer website to buy something you need, you can earn to buy the game merchandise "credit coins." These "credit coins" are 0 costs for Zynga, but they are valuable to players. Put these two together, there will be standard low buy high selling "arbitrage Space" (arbitrage).

What's the last? Personalized "? Wrong, is" private ". A large number of users of the various customized, short-term, not reliable, this not only requires a lot of data mining and analysis, but also need precision intelligent referral ability (accessibility). This is probably the remote "cloud computing". Watercress is a good experience, but will you really listen to Faye Wong or Lady Gaga for the next song? I doubt that.

Actually, it doesn't have to be that complicated. Everyone has a lot of real needs that are not met and don't want to be made public. The more personal the problem, the more "just needed". In the graduation season, online paper trading business is hot. At this time, it is definitely not priced at the cost, but according to the psychological expectations of pricing.

I have been very strange, why no one thought to the judicial, postgraduate, civil servants, such as examination training to move online to do video on demand. And it doesn't have to be a long classes, it's just 10 minutes of short video downloads OK. Each video teacher tells a test key, everybody chooses the radish basket. Learn by subway. That's a bigger bet than a video site that spends a huge price on a premiere show.

Platform era, entrepreneurs must learn to charge

The internet has grown to today, there are only a few qualified to do the platform. In essence, a free business is a real big player's business, and smaller companies are increasingly playing games.

Free only to adapt to platform-oriented enterprises, platform is the operator, whether they open a casino or open a playground, the rules are set. Why do the fake machine secretly buckle, is not moved by the Division of Policy to force. Facebook is jealous of Zynga making more money than it does, and will demand a 30% royalty clause. Any basic service, any application that helps to enhance the user's viscosity, the operator will do it himself.

So instead of counting on the magnanimous of platform operators, rely on their own energy. If you don't have the skills to make money from the user, you don't have the money to give to the operator. What motivates him to work with you? The more users you have, the more platform you can operate, the more afraid you are, and once you run away, who does he want to collect money from?

For entrepreneurs, you must learn to charge, do not charge on behalf of your own product is not confident.