The cost of free: the business model of the internet

No one wants to pay for information anymore, after all the internet is overflowing with free information that is available to me even on the move on my mobile device. This seems to be the prevailing notion for many who continue to insist that the internet is “free”; but “if you are not paying for something, you are not the consumer; you are the product being sold” and the trade off for this deceptively free access to information is your personal data.

The gears of internet commerce are greased by an intricate information exchange system that has players in the hundreds who are all angling for a piece of your data. With internet penetration in Africa rising and juggernauts like Google having set up shop; this confirms that Africa is next frontier with a large non-profiled population.The data that is collected and mined from your online journeys is used to fine tune the content that you consume with the biggest value tied to targeted advertising. Simply put, everything you do online, is of value to someone.

Facebook, a social network that has the world buzzing with talk of a $100 billion valuation as it looks at going public, employs some serious talent – think PhD level to build new models to analyze and position all the data that you so freely provide when on their platform with the sole aim of presenting businesses with a  tool to market their products and services.

The ecosystem that powers the free internet consists of buyer, seller and a host of intermediaries who are looking to either improve one process or another or provide more meaningful interpretation of data.

When free is not really free, can be seen in instances when accessing content online you get served with a notice – this content is not available in your region. What’s going on here is that there is insufficient information on you to make you a profitable consumer for the free offering. The cost vs benefit to the content provider is nil, and therefore they will not expend resources – think bandwidth , lead commissions on a prospect whom they can’t convert to paying in one way or another. They will therefore not license their inventory for viewing in region.

As we get more connected, expect even more targeted content to come your way; but remember there is nothing like a free lunch.

An Africa based entrepreneur in the pursuit of opportunities without regard to resources currently controlled striving to build services that have real-world value for my beloved continent and beyond while having fun along the way.
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