Free!

Robert sent me an article on Wired about how 'Free' is the next business model. Basically, it comes down to this: In a perfectly competitive market, price drop to the marginal cost, so if the marginal cost drops to $0, then prices will drop to zero.

Of course, it's difficult to find a market that is actually perfectly competitive (homogeneous product, many producers, no barriers to entry in the market), yet some markets in the internet come close. I'm thinking of some music, video, and game markets on the internet. Also email providers (gmail, yahoo).

Of course, the price of these aren't always zero, due to the fact that some companies sell advertising on their sites where they provide a free service (Pandora), but I would assume that those are used to because the marginal cost of services isn't actually zero. And there is that pesky little thing called fixed costs to deal with.

Anyways, interesting article. I won't completely retell it, because you can just click on the link if you're interested. Oh, and there's a longer one here.

Also, strangely, I dreamed about Zeno's paradox last night, and here it is in an article. And I'm not going to decide which is weirder, me dreaming about Zeno's paradox, or it showing up that same day in something I'm reading.