Thanks to a librarian relative who tipped me off, I started using Google early on, before the company started making money from ads. I remember thinking it was just a matter of time before Google started charging users for the valuable search service they provided. But one reason Sergey Brin and Larry Page are multi-billionaires and I’m not is that they figured out a much more powerful economic model. Google’s real product is not providing search solutions for consumers; it’s segmentation of consumers for marketers. The Google-led approach has become so pervasive that consumers just assume any service they receive on the web will be free and don’t tend to think through the implications.
In Privacy Groups Fault Online Health Sites for Sharing User Data With Marketers, the New York Times points out that consumer oriented health sites such as QualityHealth collect information on users that they then sell to marketers. In this case, as with many health care sites, the real customers are pharmaceutical companies seeking qualified prospects for their wares. As you might expect, some people are up in arms about this. In a way I don’t blame them, because the sites seem to treat the consumer as the customer, at least at first glance.
If someone offered you something valuable for free in real life you’d be suspicious and ask, “What’s the catch?” It’s time consumers starting thinking that way on the web, too. Eventually it might lead to services where the user is the paying customer, but I don’t think we’re nearly there yet.November 25, 2010