I'm sorry, what? If the options were "Google for $5 a year vs. Altavista", you think Google wouldn't have still have gone public?

Clearly, Google had better ways to make money; when you have something as excellent as Google, you have options. But don't take as your thesis that "even Google had to go free".

$5 a year is a ridiculously low income when compared to advertising. I seriously doubt google would still be around if they had tried to charge users to search the web. Altavista wasn't that bad.

I'm simply pointing out that some services don't really work too well as a 'paid' model.

Also you've got the fact that some of your competition is going to be free. If you want to now charge users directly, you have to be at least 10 times as good, or be offering something seriously different to make them pay.

I'm still firmly in the freemium camp.

1. Make something, get people to use it

2. Grow, make profit from advertising (Stay lean, keep costs low)

3. Once you're big enough, some subset of your users will be willing to pay for extra features

If you instead go for paid only, I don't think you can reach anywhere near the same audience.

Google has over 128MM users. Assume Google just gets the "really amazing product" conversation rate of 10%; at $5/year, that's a recurring revenue stream of $64MM/yr, at the lowest conceivable price point you can come up with for a good product.

"But $64MM is fuck-all compared to the billions it makes now!" Of course that's true, but that's besides the point. Almost any product company number is going to suck compared to what Google can post now. I'm not arguing that Google should be a free service. I'm saying they had options, and it wasn't necessarily between "free or die".

The figure of 10% conversion rate seems pretty high to me. I'd expect something more like 0.1%. People expect things like 'search the web' to be free.

If you're telling me you wouldn't pay 40 cents a month to use Google instead of Altavista, I'm telling you that I do not believe you.

I might pay that if the small problem of micropayments (IMHO managed by your ISP) was solved. But it's not.

You're being a message board geek, axod. If you have to pick your poison, and it's signing up for recurring credit card charge versus using Altavista instead of Google, I already know what your answer is. Google didn't have to be free; they chose to be, because given a spectacular product, they had spectacular freedom to find the best way to make money.

Hmm do you think they would have gotten so big if they hadn't been free from the start? How would they have got the message out that they are better? Free trials? :/

Things that are "paid only" don't seem to scale quite as well.

Of course if/when a decent micropayment model emerges from ISPs, then it'll likely change everything.

No offense, but are you even reading me before you respond, axod? Do you see why I might ask that?

>> "Google didn't have to be free; they chose to be"

I read that, and thought "That makes absolutely no sense, because they would have failed if they had not been free".

Please explain how Google would have grown to its current size, had it charged users to use its search.

Google chose to be free, because the alternative would have been certain failure.

I think their point of losing faith is demonstrated by your last line: "...Clearly no one would ever pay..." Is that clear? Are we certain no one would pay a small monthly fee to use Google? What if it was tacked on to your high speed Internet bill?

Having faith in charging is realizing you will and CAN lose 95% of your audience and still make a decent living, simply by charging.

You make a good point. I was actually going to edit my post but for some reason it didn't let me.

If it was a simple case of having something tacked onto my ISP bill, then I'd be far more likely to pay for things. I think that's an area ripe for development. Why ISPs haven't attacked it yet I don't know.

Ad supported is still a pretty good model though and will be around forever. It does depend on who your users are though.

Because ISPs are terrible at picking winning technologies that are worth paying for. If they provided all their users with a search engine 10 years ago, it wouldn't have been google, it would have been some lame competitor.

On the other hand, perhaps they could get together to sort out a standardised payment method that would make paying for stuff online as easy as it is to purchase an iPhone app. No doubt, this would make them loads money and allow many more sites to charge money from their users.

Right. It just needs to be a generic payment system. Much as we had premium rate dial up ISPs for a while to access porn (Apparently).

It could just be a very simple setup:

  1. webapp notices you're on ISP A
  2. webapp asks ISP A to bill you $3/month
  3. you get an email from your ISP asking for authorization
  4. you click the link and it's added to your bill

But this falls flat once you remove the assumption that a user only accesses the internet from a single ISP. So what happens when I decide to make that purchase on my lunch break at work? Or from the free wifi at the coffee shop?

There was a time that this would have worked, but I think there are too many people that aren't tied to a single physical location for their internet services. And we haven't all switched to something provided by a cell company.

For your consideration, PayPal subscriptions service: https://www.paypal.com/cgi-bin/webscr?cmd=p/xcl/rec/subscr-i...

It works just fine and no need to get the thousands of ISPs that exist involved, which is incredibly messy.

Sure, but the user still has to have paypal setup, credit card, etc.

Going the ISP route is far cleaner, since they already have a billing relationship with the customer.

I would pay $10/month, maybe even a lot more for a search engine that learned my interests. Fore example, if I say 'spring', I am not interested in soap, or perfume, or early season vacations. Or if it finds a match in a forum, it discounts posts that have no follow on. My list is quite long, but I could see paying $100/month if it saves me a few hours per month.

"Clearly no one would ever pay to be able to use google to search" - So if Google started charging you a dollar a month tommorrow you would gladly start using Altavista instead?

I Don't think it's quite that clear.

If they did that, a competitor would quickly emerge that was free and of comparable quality, and ad supported.

The fact is though, they make far more from advertising than they could ever hope to make charging.

It's easy to find exceptional cases to anything, and it means nothing.

Are you kidding me?

Perhaps it's your own personal situation, but I would certainly pay for something as high quality as google is. Hell, I pay for fricken cable TV, and google is much more valuable than hockey games and the the odd HBO drama.

I think if you're going to ask "What would I pay for this?" you have to be honest with yourself and with your product. Are you the only guy you know without a cellphone? Are you living everyday on Ramen? Sometimes, "you" needs to be qualified. Assuming you are average though, it is a good start.

Sure, if it was an iPhone app, then definitely - people pay for it - it's easy. You just click. I'd probably pay something for a google iPhone app if it was good enough.

The web doesn't have such luxuries. Payment on the web still pretty much sucks. Especially for low value recurring fees.

With iPhone apps, you can pretty much trust Apple. They'll take your money and pass it on. If there's an issue, you take it up with Apple. Apple are the only ones who have your credit card number. That's why it works so well.

We need something similar for the web, managed by the ISPs, if we're to make paid for content more viable.

Come on, PayPal works just fine. They even have recurring payments. Its silly to pretend theres "problems" with accepting payments on the web. Anybody can do it via PayPal.

I didn't say it's not possible, but it's a massive hurdle for users.