Slide 5.1. Topics of this lecture Introduction to 10 different online business earnings models The rise of the “Freemium” business model on the Internet.

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Presentation transcript:

Slide 5.1

Topics of this lecture Introduction to 10 different online business earnings models The rise of the “Freemium” business model on the Internet

Learning Goals For This Lecture Be able to name 4 – 5 different online business models Name 3 technological changes over the past 20 years which have helped make the Freemium model viable Understand how cross-subsidies support Freemium off-line and online business models Be able to come up with 2 examples of online Freemium models which are NOT talked about in this lecture Voettekst3

Taxonomy of 10 Online Business Models BrokerInfomediaryAdvertisingCommunity Freemium ManufacturerSubscriptionUtility Affiliate Merchant

Off-line/On-line free models Cross subsidy model Rise of Freemium Online Business Model Can it be really Free?

Cost of Web Services going to $0.00 In 2007 – unlimited Storage from Yahoo Bandwidth getting cheaper (fiber optics) Processing Power get cheaper (Moore’s Law)

Software Economics – prices go down each year – until it’s FREE Open Source Free Software

Freemium Business Model Characteristics Old - Off-line: Give away a small amount of free product Hope user’s get hooked and buy a LOT more Newer - On-line: Give away LOTS of free product; Only a very small percentage of users pay for premium service ~ 1% Create a huge community

Facebook & Twitter – Free? What is the trick when you are offered a free service online via a social media link?

End of Video - Thank you Please take the online quiz associated with this video and join the online discussion about Freemium Business models as well.