The Long Tail: Google: The all-time biggest company based on free

The Long Tail: Google: The all-time biggest company based on free: "Google: The all-time biggest company based on free

I've always assumed that Google was the best--and biggest--example in history of a business model based on free, but until today I hadn't actually run the numbers. Before I get to those, let's definite what 'built on free' means.

Until the advent of the Web, the biggest companies built on free were broadcasters in radio or TV ('free-to-air' services, where a third party--the advertisers--pay for content to be free to consumers). In the rabbit-ears broadcast era, these were pure free plays: virtually all their revenue came from direct advertising payments or syndication revenues from their local affiliates, who were just passing along their own advertising revenues.

This is what's commonly referred to as 'the media business model'. Sometimes it means that advertisers subsidize 100% of the content costs, other times they subsidize just 70-80% of those costs, as in the case of magazines and newspapers."