Yesterday the NY Times decided to discontinue their pay-for-view service after a review of cost versus benefit. Now it looks like the Wall Street Journal online will also be free. While this may be good news for readers, it is not good news for the other newspapers that were using their free content to attract visitors. Of course, the NYT and WSJ are fighting with thousands of blogs that take their stories and release the essential details free.
This reminds me of the time when my first company encounter our first competitor on the Internet. We had developed an online purchasing system for labs and schools to buy research supplies. We were charging 2% to the customer to enable the easy search and find supplies, and then the easy creation of multiple orders. We did not charge suppliers to sell what they were already selling. Our competition decided to charge the supplier and give their service free to customers - using the concept of grabbing a large base and holding them away from suppliers who did not cooperate. After a while both sides wanted the full service for free.
It was announced today, that IBM will begin giving away their version of the Open Office Suite - Symphony. This follows what Sun, Yahoo, and Google have already done. How does a small player compete in a market such as this? In many cases such actions would be viewed as anti-competitive, but not when Microsoft is involved. After all, they won the browser battle (maybe not the war) by giving away the friend of hackers and virus writers, Internet Explorer.
Clearly, it is not time to start a new software company around office software. If you read the IBM announcement far enough you will see that they are going to be offering fee-based support! Here is where a local company, that can respond with more personal service can take advantage of the opportunity. With free software, more people will want to use it and thus more people will need assistance. As with Linux, teams of geeks and teens will have a large population of part-time employers.
There are other ways to survive. What would you suggest?
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