Free Comes at a Price

I love the American way of defining “free” on the Internet: it’s free as in beer and free as in speech. But of course, as an American economist famously said:
“There’s no such thing as a free lunch.”

That price started innocently enough: ads. But the Internet gradually moved from showing ads the way existing media did (same ads for everyone) to showing personalized ads. But to do that, sites needed to know more and more about you. That is why Ethan Zuckerman reminds us:
“The internet spies at us at every twist and turn not because Zuckerberg (Facebook), Brin, and Page (Google) are scheming, sinister masterminds, but due to good intentions gone awry.”
Initially, Google’s ads were based on what you searched for but they didn’t (couldn’t?) track you all the time (That was the era when families still shared desktops). Then social networking happened and websites knew your ID. Then came the personalized devices for individuals: smartphones and tablets. Suddenly, knowing you (or surveiling you, depending on your point of view) became ridiculously easy for websites.

Venture capitalists would want to know how an Internet start-up would make money and the answer would be ads. The next question would then be: Why would your ads be better than the others out there? And the inevitable answer: because we will put out even more targeted ads. And to do that, of course, the site would have to track you even more.

Ironically, the Internet being free is what attracts billions world over; but the sites had to make money somehow. And that way became via ads; and to make ads give more bang for the buck to the advertiser, the ads got more and more personalized by tracking us more and more.

Or as Zuckerman puts it, free as in beer is the root cause for the “Internet’s original sin”: making money via ads, not subscription fees.

And guess what? There is room for improvement for these targeted ads. Felix Stadler did the calculations to show that Facebook makes just $0.60 per user. And that’s in an entire quarter! Don Marti then showed that print newspapers make 4 times that! If you thought Facebook is evil, it would worry you to know that they have enormous room for improvement (deterioration?).

The only solution to avoid all this surveillance might be to pay sites, even a tiny amount. But as the Indian Oil attempt to ask LPG cylinder users to voluntarily forgo subsidies showed, people don’t like to pay.

I guess you get what you pay for. Or, in this case, what you didn’t pay for.

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