Is Google Going Better Than Free On Navigation? Will That Set Off Antitrust Alarms?

from the should-it? dept

A few friends have passed along Bill Gurley's excellent (as usual) analysis of how Google is disrupting the navigation market by ditching the two big players in the space (Tele Atlas and Navteq), going it alone and also (the big news) offering its navigation info for free. Gurley points out that the truly disruptive part is that Google is actually offering mobile operators a deal that is better than free, in that they get to share in some of the ad revenue associated with anyone using the services. The point is pretty clear: those who are relying on the old business model of getting paid for navigation info are likely in serious trouble.

Of course, there are some perception issues. Plenty of companies who have tried a "we'll pay you" approach to marketing often find that it actually breeds some level of mistrust, as partners/users start wondering why, and if there's some sort of nasty catch. Google, of course, has a pretty good reputation, and ought to be able to overcome that issue. However, it does make me wonder if this will set off the Justice Department (and Google's enemies) on some silly witchhunt, claiming that this is somehow "predatory pricing." That, of course, is ridiculous if you actually think it through. The only real problem with predatory pricing is if it's used purposely to drive others out of business to then jack up prices. But Google's idea is to just give it more opportunity to make ad revenue. It's not predatory, it's just smart from a business sense. However, with so much scrutiny on Google these days, you could certainly see this backfiring.

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Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

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The Death Of Paid WiFi

from the it's-over,-done-with,-kaput dept

It's been almost exactly six years since I got into a bit of a debate about whether or not there was a real business model for fee-based WiFi. Not surprisingly, I didn't think it would last, even as there were a bunch of startups (some well-funded) trying to stake out a claim that they could build huge networks of paid WiFi access points. Those businesses never got very far. While there are still some fee-based WiFi access points around (mainly in airports), more and more are becoming totally free. Starbucks (which had been a holdout) has gone conditionally free, and last week Barnes & Noble WiFi went totally free. So can we now close the book on the idea that fee-based WiFi was ever a good business model?

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Nebraska Forces City To Stop Advertising Free WiFi

from the how-dare-they! dept

I'm actually on a road trip across the US this week, still working along the way with a mix of EVDO and WiFi. I'm writing this post while connected to some WiFi in Cheyenne, Wyoming (nice town) and I'll be on my way into Nebraska shortly. That's why this story caught my eye: apparently the small town of Louisville, Nebraska has set up a free WiFi zone in their downtown and smartly decided to advertise that fact on the main highway that runs by the town. Yet, the State of Nebraska Roads Department has forced them to take down the sign, worried that other towns across the state might also demand that the state put up signs advertising free WiFi. Considering that the signs in Louisville weren't installed by the Roads Department in the first place, this seems like a totally misplaced worry. If other cities demand such signs, why not just tell them to put up their own signs if they want to? I might just have to swing by Louisville myself and post something using their WiFi.

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We're Still Debating Whether Or Not Free WiFi Is Good For Business?

from the wasn't-this-settled-already? dept

We thought that the whole debate over whether or not free WiFi helped businesses like restaurants had been settled years ago when restaurants like Panera shared some data on how much more business it drove. However, it seems some are still resisting this, so we get yet another series of articles asking whether or not free WiFi is good for business. There are definitely more businesses offering it these days, so that should be something of an answer itself. But it's surprising to see someone in the article include that old line about how restaurants are worried about people clogging up its tables. We've seen reports in the past showing that free WiFi actually tends to bring in people during off-peak times. As for the peak times? While there may be some freeloaders, it's not all that pleasant for them to hang out in a crowded restaurant or cafe either.

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'Free, With Ads' Phone Calls Trying Yet Again

from the at-least-on-the-company-side dept

At the height of the dot com boom, there was talk of how just about any business model could be shifted to the "free, but with ads" business model. That resulted in the ability to get free computers, free DSL and even free cars... as long as you were willing to put up with ads (or in the case of the cars, cover your car in ads). The concept died down a bit, going back to the traditional areas where such a business model made sense (newspapers, television, etc.). However, it seems like the idea is making something of a comeback in the telco realm -- at least on the company side. Whether or not users actually buy into it (or, rather, view enough ads to make it worthwhile) remains to be seen. First up, is Blyk, a company that we discussed a year ago, but which is finally launching. It doesn't appear that they've adjusted their business model (free mobile phone service and they put ads on your mobile phone) since we panned the whole concept. Similar efforts haven't gone very far, so it's difficult to see this suddenly getting much traction.

Perhaps even more interesting (though even less likely to get anywhere) is another company, named Pudding Media, that wants to offer free phone calls in exchange for displaying contextual ads on your computer. Yes, the company is claiming that it will use voice recognition to listen in on your calls, determine what you're talking about, and then pop up relevant ads on your computer screen as you talk. The obvious comparison is with Google's contextual AdSense (specifically within Gmail). However, early on people were pretty creeped out by the contextual email ads, and it would seem like people are even more likely to be creeped out by voice recognition systems parsing phone conversations. On top of that, there are so many options now for people to get cheap or flat-rate calling plans, that you have to wonder if this type of solution will really attract many users. The company is likely going to focus on bolting its contextual ad solution on top of other providers, but that really depends on how well it actually works. It appears the company is launching at DEMO this week, which I'll be attending, so I'll try to test it out and see.

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