Henry Davis

I'm riding my bike across America, and hope to be helpful along the way.

MOSCOW In a museum here is a box of detergent that stands as a symbol of the reverence that Russians once held for Aleksandr Solzhenitsyn, the literary giant who died on Sunday night. Within the box is concealed an illicit copy of Mr. Solzhenitsyns masterpiece about the Soviet labor camps, The Gulag Archipelago, which was obsessively circulated in Soviet times despite the penalties for those who read it.

Speaking as a Facebook app developer, if there were an integrated payments system available I would not use it to charge access to my apps ala the iPhone store.I would use it to charge access to premium parts of my apps. In my opinion, the freemium model will do VERY well on Facebook. Its true that most of the throw-away apps have nothing that anyone would want to buy.But believe it or not, there are some applications that have passionate user bases with real perceived value and community. When you paint every Facebook developer and application with the same useless distraction brush, you do developers like myself a disservice. To give you a concrete example, I run one of the largest sports applications (Hockey Pool, 350k users, 40-70k daily active users last hockey season). I focus on creating a great experience for the participants, rather than maximizing my pageviews and eCPM yield. Since the season ended in early June Ive received more than 1000 emails and messages thanking me for the application, telling me how much fun it was, and volunteering time to help organize next seasons contests. I think many of my users would happily pay for an upgrade to a premium service. Bottom line: having an integrated payment system in Facebook would encourage the development of high-quality apps.

Microsoft is eager to expand its Live search, which has languished far behind Google and Yahoo for years.In May the company launched an apparently desperate move to actually pay users for using the site through its Live Search Cashback program.That initiative has proven to be a success, increasing search usage by 15%.But Live search still trails Google and Yahoo by huge margins, accounting for only 9% of all search queries (Yahoo and Google account for 21% and 62% respectively).

. You've made an excellent point, Mark. In fact, this is something I-and our team- has been wrestling with for quite some time. We are the world's leading and only global think tank, professional association, educational institute, certification provider, and conference producer solely focused on modern virtual organization management, a discipline I have founded and pioneered since 1997.Being that we are in essence a monopoly in that space, and based on our market surveys, I thought it would be a slam dunk--so to speak, no brainer--selling our premium membership services.But what we've found is that internet users have come to expect things for FREE and, therefore, flock to the FREE membership part which basically offers a monthly newsletter which, by the way, is free to everyone else. The problem with the FREE membership is that the premium conversion rate leaves a whole lot to be desired. On the other hand, we have a ton of useful information we offer to the public at large that is distributed for FREE to leading industry publishing sites which do not require any sort of membership or fees which, in turn, provide us with a tremendous amount of global recognition as "the godfather of virtual organization management" .... all the accolades that go with it ... and having just about everyone wanting to partner with our organization [[ as a result of this FREE information ]] we make available.We are now using a MODIFIED FREE version.We provide a great deal of educational information regardingWHAT companies should be doing with respect to virtual organizing their workforce and workspace and WHY for FREE. And with that same piece of information we alsoprovide them at the end a link to a PAID document we offer that will show them HOW to do it.I guess it really boils down to WHAT you are providing for FREE and WHO you are providing it to.

3. I think the sites that will get it right will offer 3 options:1.A high end paid premium service that someone can't live without.2. An ad supported low end service that pushes people into the product.3. An option to buy out ads for life on the low end service at a pretty cheap price.I think the really tough question is when it comes to content.The NY Times went free because they could open up their archives to search engines and monetize it much better at that time.The key words are "at that time".If everyone offers ad supported products, advertising will get very cheap.

When we see enough other people actually paying, and how much they are paying, that becomes our "due diligence" and market pricing mechanism. It also becomes part of the decision tree as to whether or not we would prefer a free version , or are willing to pay. For some, it becomes the determining factor on whether or not they are willing to steal rather than pay.Which translates to the conventional wisdom that free is the way to go on the web as being wrong. I think many websites are making a huge mistake by going free only for their products. The real upside comes from being a hybrid, with both free and for pay versions.When people actually pay for your product, you define a value to everyone. First you have to keep your paying customers happy. They want their money's worth. Which in turn, keeps you improving the product and the service surrounding it. Just as importantly, it creates a revenue stream for your company. Always remember this. Without a revenue stream, you have no company.Of course, you can sell advertising around the product. But while culture of the web is such that most of us understand that if you get something for free, you accept advertising or limited features in return.The challenge for businesses is figuring out what the right balance of price vs features and advertising is.