New Zealand's Leading Daily Net-News Online Publication |
Net-Industry NEWS! |
|
|
Publishing Internet News and Commentary since 1995
.
| ||
| ||
|
Dateline: 5 April 2000 Early Edition Read The Previous Edition A permanent link to this page can be found here
Editorial
New Zealanders are now in what may appear to be the enviable position of
being able to choose from a growing range of "free" Internet services and
I've had a lot of email from people asking if there are any catches and
whether they should dump their existing ISP.
First-up, let's look at just how these companies are going to survive and make
money.
Well, call me a cynic, but I'd say that a free-ISP service is an ideal vehicle
for exploiting the Net-mania that still exists amongst investors.
If I had a spare million dollars, here's what I'd do:
In fact, even if we were to allow for the lesser value associated with the
users of a "free" service, this company would still be pretty easy to value
at between $5-$25 million.
Now that's not a bad return on a $1 million investment over a 3-6 month period
is it?
But... the big question is... what happens after the founders of the business
sell-out?
The new owners or shareholders are, sooner or later, going to want to see
some real return on their investment -- which means that the users of that
free service are going to have to be squeezed good and hard. That's going
to mean vastly increased levels of advertising (if they can find enough
advertisers) or they're going to have to find some other way of extracting
some revenues out of that user-base.
I'm not saying that this is what the current crop of free ISPs are planning --
but it's the only way I could see anyone getting a significant return
on their money when setting up such a service.
One thing that worries me a great deal about the free ISP services is that
you have to give them an email address before you can sign up.
I wonder why you can't just sign-up online and use the "free" email address you
get as a result? Perhaps its because they want your REAL address?
Certainly in the case of i4free, it appears that their "notices" (aka: advertising)
will be directed to the email address you provide and when the pressure comes on
to spin a profit, you can be sure as eggs that there will be a fair amount
of such "notices" arriving every day. Of course you can opt out -- but if you
do -- you lose your free Internet access.
So it would make good sense to rush off to
Hotmail or
Yahoo Mail and get yourself
a throw-away email address to use for signup purposes -- rather than risk
ruining your primary account by having it become the target for dozens of
daily advertising "notices."
The other thing that worries me about i4free is that you have to install
special software on your PC. Now call me paranoid (anyone remember
the RealVideo snooping?) but I'm a little reluctant to open up my
PC and my Net activities to any organisation that relies on generating
a powerful and accurate profile of my individual preferences and habits
in order to sell its advertising to the market.
There have also been the inevitable reports of the installation software
screwing up users' PCs to the extent that they have been forced to reinstall
Windows to restore its proper operation.
I'm afraid that I still don't see how free Internet access can survive in a
market as small as New Zealand.
So... sign up by all means and use them as much as you like while they're still
truly free -- but remember the caution about what email address
you give, be wary about installing any new software on your PC, and don't
ditch your existing ISP, you may need them.
Nick Wood Says
Nick made no bones about the fact that they blocked FreeNet and i4free
for purely commercial reasons.
The analogy discussed was somewhat akin to TV1 being allowed to refuse
advertising for a competitor such as TV3.
Nick says that he doesn't believe the free model will be sustainable and that
IHUG was attempting to protect its users -- which may be a little disingenuous --
I think I preferred his acknowledgement that this was really about dollars and
cents.
One thing that has to be acknowledged is that the Internet access business is
becoming somewhat cut-throat and it can be argued that ISPs have a right (some
would say a responsibility to shareholders) to protect their turf. Nick says,
if people are really that angry about IHUG's decision to block the sites then
they'll vote with their feet.
Whether you agree or not -- I must say that as someone who has to struggle
each day to find something new and interesting for my readers I'm glad we
still have a few "personalities" who are prepared to stir up the waters
on a semi-regular basis, even if I don't agree with what they're doing.
The big downside of the corporatisation of the Internet is that it has become
largely faceless. For example... at one time a good number of people could
name the people who headed up each of the ISPs around the country -- these days
they're all largely nameless, faceless suits. Ah.. I detect a whiff of nostalgia in the
air ;-)
Free republication rights available
on request
|
|
Aardvark Daily is a publication of, and is copyright to, Bruce Simpson, all rights reserved
|