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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: David R. Schaller who wrote (74664)	12/30/1999 10:37:00 AM
From: MeDroogies	Respond to of 97611

"These free services could eventually give the paid services a run for their money." Ok...a bit of disclosure here - not full, but some. I have spent 15 years selling advertising. I currently work in the online industry, selling advertising. I worked for an ISP, as well. It is doubtful the free services will ever give any of the full service businesses much of a run. As I explained before, the economics aren't there. The advertising isn't compelling, and even at drastically reduced cost-per-thousands (the basic unit of sale), it is nearly impossible to get advertisers in large quantities. The best method is to require a click-through every hour, since that is the primary method of quantifiable analysis they use. However, the evidence points to the lack of desire to click through...click throughs, in general, have been in decline over the last 3 years. To maintain a service, it may be seen as too much of a burden by the user. As far as being a fine backup service, yes, even I use one to back up my cable modem. That said, I haven't even used it yet. It just sits there. Big deal. No revenue for the free guy. For the short-term sign-on/off user, it's great. But again, no revenue for the ISP, since they don't sign on for very long. In addition, most users seem to be extending their online time (average usage time is climbing among paid ISPs). While this would SEEM to bode well for a free ISP, it doesn't, because these aren't the users who are signing up. By and large, the free services will be relegated to backup for high-bandwidth. As that becomes more and more the case, there will be no/low revenues coming in....and very high maintenance costs associated with them. There's nothing free in life, and this is a classic case of how people think they can make it work somehow. Consider the free-PC model....it's dead already. And after only about 2 years of "hype". The cost structure there was CONSIDERABLY lower than it is in ISPs...