It’s a Regular Free-for-All on the Internet
Adam Prentice, a Web entrepreneur working out of his home in Ottawa, Canada, has hit on the perfect price for the 1,000 products listed on his Internet site: nothing.
Called Totallyfreestuff.com, his Web destination links visitors to giveaways on hundreds of other sites, ranging from beef jerky to bath soap to pantyhose. Yet despite a lack of price tags, he says his business is expected to take in $70,000 in U.S. dollars this year, thanks to advertising sales.
“It’s doing all right,” said Prentice, 25, who quit his technical support job for Compaq Computer Corp. last year to focus full attention to his Web venture.
Prentice has good company: Giving away stuff on the Internet is big business. Spurred by intense competition for Web surfers, the occasional come-on of a few years ago has exploded into an essential commercial strategy--key to drawing visitors to Internet sites, stoking interest in for-fee products and getting online businesses off the ground.
“It’s a great time to be a consumer,” said Carl Steidtmann, chief economist at the PricewaterhouseCoopers consulting firm. “The price of everything is coming down.”
Nevermind just software and e-mail services. Like winners of a giant shopping spree, consumers can find items in Web categories stretching from technology to entertainment. Although figures on total Internet freebies were not available, a recent search looking for “free” and “giveaway” on AltaVista, itself a free search service, reveals 1,142,840 Web pages with both words.
The catch is that some free sites require bargain hunters to look at advertisements, give up personal information to marketers or buy related products.
But the offerings are clearly alluring.
There are music downloads, pornography and videos. There are desktop themes to jazz up any computer screen, animated greeting cards and a missing-person people finder. There are even free jokes.
Freemania.net, one of dozens of Web sites that lists only free stuff, includes a product called FreeDrive, which gives on-the-go computer users storage space on the Internet, easier than transporting files in floppy disks.
Hungry? Troll around a Web site devoted to giveaways, and find herbal tea, chocolate and even gourmet chocolate chip-oatmeal cookies ($1 shipping and handling not included).
Oh yeah, you could be using free Internet access, or even a free personal computer.
To be sure, businesses always have given away items to try to stoke demand, especially in the early stages of an industry. Like researchers experimenting in a laboratory, companies try different formulas to see which work best to make money and build markets.
“It’s a very old model of marketing.” Steidtmann said. “‘It goes back to Gillette giving away razors in order to sell blades.”
But while giveaways are typical of young, competitive industries, the nature of technology and the Internet has greatly escalated this tactic.
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For one, the broad reach of the Internet has vastly eased people’s ability to get the freebies. It used to be you had to trek down to the bank to get a free toaster. Now you simply click your way to a Web site and wait for the mail carrier to deliver.
That pervasiveness is spurring businesspeople such as Prentice to try to get bargain-hunters to observe paid advertisements on sites or purchase something else during visits. Some businesses, like the online magazine Slate, tried charging but later changed their minds. After abandoning paid subscriptions in February, the Microsoft-owned Web site says it saw monthly visitors nearly quintuple to 1 million as it brought in more than $2 million in new advertising.
Still other businesses give away software and services to lure visitors to buy a premium version of the freebie.
EFax.com, for instance, offered a free service last February that lets people receive faxes as e-mail attachments, so they can open them up on their computer screens.
But after signing up nearly 1 million people, the company recently started selling a premium version of the service, which lets people do the reverse--send an e-mail attachment as a fax. The cost is $2.95 a month, plus 5 cents for every 30 seconds of faxing. EFax.com Vice President Ron Brown says the company has signed up 14,000 paying customers.
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There’s another reason Web businesses are giving away the store.
In technology, unlike other industries, prices of parts routinely drop. Because computer chips and hard-disk drives cheapen every year, for instance, the cost of giving away the PC is less than ever, making it a cost-effective marketing tool to sell services, such as Internet access.
That’s why several makers of computers were able to join with providers of Internet service this summer to offer free PCs to people who agree to buy up to three years of Web access for at least $700.
Conversely, Dell Computer is offering a year of free Internet access to people who buy its $959 desktop computer (not including a monitor).
Elsewhere on the Web, businesses are willing to trade their products for what they view as an even more valuable currency: personal information about potential customers, from buying habits to addresses, that lets sellers precisely pinpoint potential customers.
Database software running on powerful computers enables companies to easily match the traits of millions of consumers with products they may like--and possibly sell the information to third parties eager for customer data.
Enjoy the bargains while they last. As Web carrots work their magic--the number of wired U.S. households will nearly double to 67 million in 2003 from 35 million today, predicts Jupiter Communications--businesses will start charging for what used to be free.
“Once the Internet is more popular, people will know the sites, and they won’t have as much of a need to give away stuff,” says Prentice, the Totallyfreestuff.com owner.
But it may not be a great loss, he adds.
“It’s not like you can live off the free items. They just give you a taste of the products you like.”
