The Complete Guide To Freemium Business Models

This is something I struggled with for a long time in regards to my own company. I did ultimately though end up with going with a "Freemium" model though. The article does a good job pointing out the strengths of freemium, and I think for any sort of social network based company (I believe he used linkedin as an example) you would be hard pressed to find a pricing model that works as well as Freemium.

<i>"Guess what? Because of declining hosting and bandwidth costs, for most Internet products the marginal cost today is practically … zero."</i><p>That's not really true at all. I remember reading an analysis of Google's costs somewhere (sorry tried but can't find the link) that each search costs something like 70c.<p>Even if it were much less (1c or 2c) that's still a hell of a cost for the "paying" customers (ie. the circa 10% of people that actually click on google ads) to be covering.