Friday, November 28, 2008

How Much? How Do You Feel About Free?

Gwen and I lived in Manhattan during the peak of the dotcom bubble, and at some point became familiar with a company that in retrospect has to be considered one of the shining examples of the period's excess and incongruity - Kozmo.com.

The idea was simple. Go to a computer, dial up the Kozmo Web site, place an order for anything from Ben & Jerry's ice cream to a Palm Pilot and - within an hour - one of the company's grizzled bike messengers would bring the item to your door. Delivery charge? How about free.

It was tremendous, ridiculous, and unsustainable, and yet - back then - was considered a reasonable enough idea to spawn a copycat competitor, Urbanfetch, which performed the same basic function for the same exact delivery price, namely nothing. These companies were going to go public, make billions, branch out into other markets, take over the world, toppling old-line "brick-and-mortar" merchants on the strength of a million foot soldiers in spandex bicycle pants, able to leap pedestrians and taxi cabs in a single bound, delivering pints of Cherry Garcia along the way.

It all came tumbling down, of course, Kozmo maybe more spectacularly than most, given the audacity of its business strategy, high visibility and close connection to an appreciative (dumbfounded?) customer base. Seems funny now, but back then the leap of faith required to place a real-time order over the Web wasn't even rooted in whether or not your stuff would show up, but in whether or not there were really people on the other end of this collection of tubes who would see your request in the first place.

After the collapse, a handful of companies like Amazon and eBay emerged from the rubble more or less in tact, then Google made everyone believe again, and now we're firmly in a new period of Web-enabled services and commerce. If there's one common thread that has persisted from the last time around, maybe it's this: price point, zero.

We pay actual money to heat our house, and for the water that comes out of the faucet above the kitchen sink, the gas that powers our cars, clothes, pizza, you name it. The pork store charges about $8 for a decent-sized ball of fresh mozzarella, and we have no complaints. But out there in Web-land, virtually everything is free.

Start with Google, and search, and the fact that finding something - anything - has never been easier or more cost effective. Trip to the library? Why? When's the last time a World Book or Britannica salesman knocked on your door? If it has succeeded in anything, and of course they're still only getting started, Google has indeed made the world's information useful, and yours, all for the price of an Internet connection.

But don't stop at search, Google is the gift that just keeps on giving. We communicate with family and friends through Gmail, the best and most functional e-mail service on the planet. Google News keeps us up-to-the-minute on events and developments around the world, and we never have to worry about missing a story we're interested in, not with Google Alerts out there scanning the headlines 24/7 with an eye that never blinks. Google Reader lets us monitor a couple hundred blogs and news sources. Google Maps tells us when and where to turn. This blog was created, and is hosted, by Google's Blogger. Posts are sent to subscribers via e-mail or RSS by Feedburner, another company in the Google fold. And there's one common thread to all of this - it's all provided gratis. There's another one, too, which David Carr of the New York Times noted earlier in the week, but that's a whole other post.

We listen to customized radio stations we created through a site called Pandora, communicate through Twitter, the kids play on Noggin. Sitemeter tells us who shows up here, how they found us, and what they saw on their way out the door. Facebook, Flickr, Picasa, YouTube, this is not a comprehensive list. I know there's a complicated advertising model at work here enabling all these virtual goodies, but I really don't care, it doesn't apply to me. I'm not sure I've ever clicked on a banner or contextual ad, and if you want to give me the world in the hope that someday I will, that's just fine.

I sometimes wonder when the virtual gravy train is going to end, when we're going to get a notice that Gmail accounts will now cost $2 per month, or an invoice from Blogger threatening immediate site deletion unless we cough up a few cents for each previous post, and agree to pay a nominal monthly "account maintenance" fee going forward. Looking to establish a new Google News Alert? Cool. That'll be an initiation charge of $1 and 10 cents for every resulting e-mail, have a nice day.

It's hard to imagine significant changes in this virtuous circle anytime soon, with real companies generating real revenue (at least some of them) serving up all this benevolence. But I still marvel at how much we get for free on the Web, and am not entirely sure it isn't just a new version of the bike messenger standing at the door at 11:30 p.m. on a Tuesday night, bearing ice cream and a colorful logo to go along with an unworkable business model.

2 Comments:

Blogger fred said...

good post, but if Kozmo has just stayed in NYC instead of opening up in 18 markets, it would still be around. by the time it went under, Kozmo was making a lot of money in the NYC market by delivering stuff. there was a delivery charge by then, of course.

7:48 PM  
Blogger Eric said...

Competitors have spring up in L.A., namely Yummy.com and Pink Dot. They've been around for a while, but they also charge a healthy delivery fee. (And FWIW, I'd happily pay $2/mo for my Gmail account! heh.)

4:17 PM  

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