If You Live By Free, You Will Die By Free

Hugh Pickens writes "Internet entrepreneur Mark Cuban writes that the problem with companies who have built their business around Free is that the more success you have in delivering free, the more expensive it is to stay at the top. '"They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo," writes Cuban. "Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience."' Cuban says that even Google, who lives and dies by free, knows that 'at some point your Black Swan competitor will appear and they will kick your ass' and that is exactly why Google invests in everything and anything they possibly can that they believe can create another business they can depend on in the future searching for the 'next big Google thing.' Cuban says that for any company that lives by Free, their best choice is to run the company as profitably as possible, focusing only on those things that generate revenue and put cash in the bank. '"When you succeed with Free, you are going to die by Free. Your best bet is to recognize where you are in your company's lifecycle and maximize your profits rather than try to extend your stay at the top," writes Cuban. "Like every company in the free space, your lifecycle has come to its conclusion. Don't fight it. Admit it. Profit from it."'"

Comments

This Is Madness

[eldavojohn]

Someone out there with a better idea ...

You mean I have to compete against innovation?!

... will raise a bunch of money, give it away for free, build scale and charge less to reach the audience ...

And my competitors can undercut me?!

This is madness! I demand protection against people trying to steal my customers with a better service/product and lower prices! Oh well, thank god I'm too big of a player for the government to let me go under.

Be warned fellow citizens, in my lifetime I have seen market after market reach the endstate of an American capitalism: protected stagnation.

Re:This Is Madness

[sys.stdout.write]

Indeed! My favorite part was:

run the company as profitably as possible, focusing only on those things that generate revenue and put cash in the bank

Companies should focus on making money?! Outrageous!

Re:This Is Madness

[hedwards]

I think you're being overly optimistic. We don't protect stagnation we protect and encourage failure. The US government tinkers in the economy more than most other free nations do, and it's almost always in the form of bailouts, protecting failing enterprises, insuring markets without demanding regulator authority. It's been going on for several decades and it's led us from one bubble to the next, and it won't stop for at least one more boom bust cycle.

What he's really complaining about is that there's a competitor that's out there forcing the price he can get to roughly approximate the marginal cost of production. Which is shocking for somebody that presumably believes in capitalism. Shocking because a competitive market pushes prices to just above the marginal cost of output.

OSS is a good example in software, credit unions in banking and hopefully a set of large scale co-op health insurers in the insurance industry. Corporations hate them because they have to compete on both price and quality. If there really were nothing to it they wouldn't be trying so hard to kill it.

Re:This Is Madness

[maxwell demon]

And my competitors can undercut me?!

Actually, if your services are free to the customer, in order to undercut you your competitors will have to pay his customers for using his service.

Re:This Is Madness

[that IT girl]

Bill Gates? Is that you?

Re:This Is Madness

[maxume]

Only if you insist on pedantic sematics.

For instance, you can provide more value for free (say, faster, more accurate results). Not quite undercutting free, because free is free, but you are giving more away, which is similar enough in concept.

Re:This Is Madness

[wjousts]

And my competitors can undercut me?!

Actually, if your services are free to the customer, in order to undercut you your competitors will have to pay his customers for using his service.

Actually, the mistake you are making is thinking that you are the customer from companies like Google or Facebook. You are not, you are the product. The advertisers are the customers.

Re:This Is Madness

[falconwolf]

What he's really complaining about is that there's a competitor that's out there forcing the price he can get to roughly approximate the marginal cost of production.

He, who, Mark Cuban? After building his own businesses, selling non-free stuff, Mark Cuban became one of the world's wealthiest men.

Falcon

Re:This Is Madness

[ArhcAngel]

Yeah, it's too bad the blacksmiths and carriage makers of the early 20th century didn't have a government like we have today to protect them from the that evil Ford guy.

Re:This Is Madness

[DriedClexler]

TARP recipient, is that you?

Re:This Is Madness

[CannonballHead]

The US government tinkers in the economy more than most other free nations do

It does? You mean the more socalistic a country gets, the less it tinkers with the economy?

I'm a conservative and I don't like the U.S. "tinkering" with the economy. But from what I understood, most other free countries tend to be more liberal (significantly) than the U.S. (and a lot of liberals in the U.S. complain about that. Hence the huge push for a national healthcare system at the moment?). And more liberal countries tend to want to regulate the market more. And regulate other things, too.

I'd be interested in seeing some backup for the claim that the U.S. tinkers more with the economy.

Re:This Is Madness

[interkin3tic]

Be warned fellow citizens, in my lifetime I have seen market after market reach the endstate of an American capitalism: protected stagnation.

There's only one solution: kill eldavojohn to save the economy!

Re:This Is Madness

[Anonymous Coward]

[quote]run the company as profitably as possible, focusing only on those things that generate revenue and put cash in the bank[/quote]

Thankfully, he's doing this with his business - the Dallas Mavericks.

Re:This Is Madness

[Atlantis-Rising]

I'm not sure what the grandparent meant, but I think the US does take more 'direct' action. Most other Western nations tend to have heavily developed regulatory structures in the first place, which necessitate less in-place tinkering after the fact.

Re:This Is Madness

[eldavojohn]

Be warned fellow citizens, in my lifetime I have seen market after market reach the endstate of an American capitalism: protected stagnation.

There's only one solution: kill eldavojohn to save the economy!

I like the way you think.

You're a shark, I like sharks. You're hired ... or bought out ... or men show up at your door and break your legs and urinate on your servers. It doesn't matter, it's all roughly equivalent to me. So long as the investors know the threat has been neutralized and taken care of; everybody that was in power stays in power and at the end of the day that's all they care about.

What's that? You're declining our offer? You're going to write a letter to your senator about anti-competition this and anti-trust that? Good, he and I have been running out of petitions and complaints to wipe our asses with when we play golf every Sunday after mass.

Re:This Is Madness

[Anonymous Coward]

No, no, you don't understand! He says that you only need to make money if you give your product away for free! If you charge for it, it doesn't matter if you don't sell anything and thus don't make any money! :)

Re:This Is Madness

[gad_zuki!]

>he US government tinkers in the economy more than most other free nations do

No way. The European version of capitalism involves a lot more regulation and tinkering, heck look at all the protectionist anti-MS regulations slashdot cheers. The US is pretty free, but its fashionable to pretend its borderline-communist because someone go elected the right-wing nutjobs dont like.

Re:This Is Madness

[Ex-MislTech]

I wonder if he knows his beloved money is fiat currency that is backed by nothing and
due to the derivatives bubble and the Fed secretly doling out 9 trillion it being depreciated
faster than most ppl can make it ?

Re:This Is Madness

[Yvanhoe]

I think you're being overly optimistic. We don't protect stagnation we protect and encourage failure. The US government tinkers in the economy more than most other free nations do, and it's almost always in the form of bailouts, protecting failing enterprises, insuring markets without demanding regulator authority. It's been going on for several decades and it's led us from one bubble to the next, and it won't stop for at least one more boom bust cycle.

Heh, socialism is better done by liberals, conservatives suck at it. If you want good government tinkering instead of thinly veiled money diversion, elect a true socialist liberal ;-)

Re:This Is Madness

[mcgrew]

The US government tinkers in the economy more than most other free nations do

[citation needed]

it's led us from one bubble to the next, and it won't stop for at least one more boom bust cycle

Booms and busts are inevitable, especially without regulations. But as long as we have the best government money can buy, you're not going to get any meaningful regulation. For instance, the only reason they're thinking about universal health care now is because the corporations have started to realize that employer-provided health benefits put them at a disadvantage to companies in countries where they don't have to pay those costs. Notice that the insurance companies won't be out of the loop; more likely we'll still have health insurance, only it'll be mandatory and the employer won't be forced to provide it.

Boom and bust
The term boom and bust refers to a great buildup in the price of a particular commodity or, alternately, the localized rise in an economy, often based upon the value of a single commodity, followed by a downturn as the commodity price falls due to a change in economic circumstances or the collapse of unrealistic expectations.

Boom and bust phenomena have existed for centuries. During a "boom" period, buyers find themselves paying increasingly higher prices until the "bust", at which time the goods and commodities for which they have paid inflated prices may end up as valueless or nearly so.

On a broader basis, the phrase boom and bust can also refer to an economy's credit cycles that occur as a result of fluctuations in "fiduciary media" or fiat money. This view is predominant in the business cycle theory of the Austrian School of economics.

[edit] Examples of "Booms and Busts"

• the Tulip mania of the 1630s, in Holland[1]
  towns such as Bodie, California that prospered during the California Gold Rush of the late 1840s and early 1850s then became ghost towns[2]
• the Roaring Twenties in the United States, followed by the Wall Street Crash of 1929 and the Great Depression[3]
• the Dot-com bubble, involving new electronic technology and the internet, in the late 1990s[4]
• the American subprime lending boom in the 1990s and early 2000s, followed by the Subprime mortgage crisis of 2006 and beyond[5]
• The Irish Celtic Tiger which led to massive economic growth in Ireland beginning in 1994 and continuing through to 2007. It was based on exports of Information Technology, Software and financial service up until 2001. The economy then veered of course due to government mismanagement and the economy grew based on Domestic housebuilding up until 2007. In 2008 Ireland's economy entered recession and in 2009 this recession has grown to a full blown economic depression.

Note that this article doesn't list all of history's cycles; there were other panics, such as the one in the early 20th century before the 20s.

Re:This Is Madness

[Anonymous Coward]

One example is Canada. During 'normal operation' Canada regulates its economy a bit more than the US. But that very regulation keeps things reasonably stable. So when the economic crisis hit, the Canadian economy suffered but was remarkably stable. No Canadian banks failed. (Regulations that were in-place prevented many of the things the US financial institutions were doing...) The Canadian government did intervene because of the crisis, but the magnitude of the intervention was small compared to what we've seen in the US (after scaling for the obvious differences in the sizes of the economies).

So the point was that by having constant oversight, it wasn't necessary to engage in massive amounts of intervention (bailouts, subsidies, new regulatory frameworks, etc.) during dire times. So, on average, Canada intervenes in its economy less, because it doesn't need to engage in these massive interventions. (Of course this point could be debated depending on how you scale things like occasional massive bailouts compared to constant low-level regulation.) Despite its support of the free market, the US doesn't let the free market run wild when push comes to shove. In fact the US intervenes substantially.

(This point, among others, is discussed in this interview.)

Re:This Is Madness

[Anonymous Coward]

I'm not sure what the grandparent meant, but I think the US does take more 'direct' action. Most other Western nations tend to have heavily developed regulatory structures in the first place, which necessitate less in-place tinkering after the fact.

I have to agree with CannonballHead and ask to see some backup for that claim.

And I'd like to suggest that "heavily developed regulatory structures" are not a panacea and need to be updated regularly to accommodate changing technological, economic and political conditions.

Re:This Is Madness

[Atlantis-Rising]

Well, for example, I could point you at the Canadian banking system as a contrast to the American banking system. This article talks about it a bit.

By forcing banks to maintain significant capitol reserves on hand, the chances of them collapsing and then requiring point intervention by the government is significantly lessened, and ultimately I think it's a much less significant intervention in the management of their affairs.

Re:This Is Madness

[Anonymous Coward]

Bing, bing, bing! We have a winner!

https://cashbackaccount.bing.com/cashback/welcome.aspx

Re:This Is Madness

[JAZ]

yeah. The real problem is the assumption that a company should expect to run in perpetuity.

Do your thing. Provide value. When someone better comes along either innovate and compete or say "hey, we had a good run", close up shop, and go try something new.

Both are good solutions.
Soliciting protection from the government, bankruptcy, and fighting to your last breath aren't very productive solutions.

Re:This Is Madness

[Anonymous Coward]

Only an inordinate amount of regulation - to the point of stagnating the economy - could prevent bubbles and busts. There has been a bubble and bust every 30 to 50 years since the United States was born. Some mostly within our borders, others international.

• http://en.wikipedia.org/wiki/Panic_of_1837
• http://en.wikipedia.org/wiki/Panic_of_1873
• the 1970's energy crisis leading to the 1981 recession

Bubbles and busts will likely continue to happen as long as people are involved. Regulation can stifle economic opportunity into oblivion, and likewise limit bubbling in order to mitigate butsing. The only cure, however, is education. Most people seem to be droning on about how awful this particular bubble/bust combo was, but I can only guess that it because they have no clue as to what happened in the 1800s.

Lack of education will be our undoing, if it hasn't already sent us well down the road.

Re:This Is Madness

[Anonymous Coward]

"The US government tinkers in the economy more than most other free nations do,"

The above statement is absolutely incorrect.

Re:This Is Madness

[tb3]

He became one of the world's richest men by sheer blind luck, according to that Wikipedia article. Broadcast.com was just another over-valued dotcom company until Yahoo came along and paid $5.9 billion for it. Cuban was just smart enough to take the money and run. Look at his other business ventures after broadcast.com. They're all massive dogs.

Re:This Is Madness

[bennomatic]

Had I had mod points, I would have given this one a +1 interesting. The implicit message here, to me, is that by not letting the big companies fail, we may be preventing the next great success story from being realized.

It's a pity that--assuming you believe that time is a single vector, moving in only one direction and at a constant speed--our lives are a conglomeration of one-act plays with no rehearsal. We can not know how much better or worse off we would have been having made different decisions, especially considering everyone has a different picture of what "we" means.

Re:This Is Madness

[Burning1]

How are you delivering that product at a reduced cost?

Have you improved your method of production?
Are you running a leaner business?
Are you exploiting your employees?
Are you undercutting the market in a bid for monopoly power?
Have you cut the quality of your product, and stepped up advertising?

There are a lot of ways to produce a product at competitively low price. Some of them are good. Some of them are stupid. Some of them are illegal.

Re:This Is Madness

[mcgrew]

BAD regulation can stifle economic activity, but good regulation does the opposite. Look what happened to telephones when AT&T was broken up. Breaking that monopoly was an extreme form of regulation that produced extreme innovation. Until then, the only two innovations since the 1920s had been coiled cords and buttons replacing the dial. Afterwards we had cordless phones, answering machines, caller ID, etc.

And the price for monthly service went down signifigantly. Ad example of bad regulation was California electricity, resulting in high prices and blackouts.

Re:This Is Madness

[m.ducharme]

And I'd like to suggest that updating regulatory structures can be far, far less expensive than correcting the damage done by refraining from putting in regulations. Now having said that, I'd tend to agree that heavy regulation itself is not a panacea, and that what works better is "smart" regulation.

Re:This Is Madness

[Dogtanian]

But from what I understood, most other free countries tend to be more liberal (significantly) than the U.S. (and a lot of liberals in the U.S. complain about that.)

When you say "more liberal", do you mean "more left-wing"? The word "liberal" tends to have connotations within the U.S. political system which don't really apply elsewhere, and it makes it confusing if you use it within both contexts like that.

Re:This Is Madness

[bickle]

I realize that you are just trying to be snarky, but what exactly are you saying? You are mocking him by agreeing with what he said. That seems to be common here though...

Re:This Is Madness

[Anonymous Coward]

This is madness!

THIS... is ... SPARTAAAAAaaaaaaaaa.

Re:This Is Madness

[Anonymous Coward]

What you want to become like Microsoft ?......

Re:This Is Madness

[Anonymous Coward]

I'd be interested in seeing some backup for the claim that the U.S. tinkers more with the economy.

As would the rest of the US government, but the Federal Reserve doesn't have any congressional oversight.

Re:This Is Madness

[Mister Whirly]

Soliciting protection from the government, bankruptcy, and fighting to your last breath aren't very productive solutions.

By "not productive solutions" I assume you are talking about the public who ends up financing these. They seem to be very productive for the corporations asking for them these days...

And just as soon as we stop handing them out, the corporations will stop asking for them. But until then, what would be their incentive?

Re:This Is Madness

[Mister Whirly]

I think those innovations have more with the lawsuit brought by CarterPhone in 1968 more than the breakup of Ma Bell. Until the lawsuit, you couldn't attach any devices not approved by Bell to any phone lines, or even own any phones (they were all "leased" from Ma Bell indefinitely). The Bell breakup wasn't until 1984, and there were plenty of cordless phones, answering machines etc. around before then.

Re:This Is Madness

[JAZ]

yes, I did mean for the greater good of the economy. Although I'd say there are precious few cases were a business that uses legal or political means to stay afloat manages to fully recover.

They are far more likely to fall into a regular bailout cycle - see Chrysler for an example.

Re:This Is Madness

[smchris]

Yeah, sounds great. Looks like Free is a recipe for snowballing innovation.

Re:This Is Madness

[Tycho]

I would rather have the economy of the country I live in NOT be diagnosed with bipolar disorder or cyclothymia. The last six years were fairly free of intervention, more corporate profits were good, so even more must better, right? The unnecessary depth of the current recession is the result of the lack of regulation. I'm also fairly certain that the mean value of the area below/above the curve of economic growth/decline was less than the time period after Reconstruction and before the 1920's than the mean for the time after World War II. The 1920's and the Great Depression are a special case. Government intervention is necessary to prevent wild oscillations of the economy, wild oscillations disproportionately hurt the poor and middle class, while doing less damage to the finances of the rich, which is a group I am fairly sure you are not a member of nor will you ever be. Also keep in mind that the economy can grow, but can leave to middle class and the poor behind, this is not acceptable in my book. I suppose government intervention could be lessened if corporations were responsible for more than just enriching their shareholders, but expecting corporations and their executives to be legally responsible and criminally liable for managing the health of the economy would be unpalatable to executives and their lapdog politicians. However, if you want the power and the big bucks and you want less government intervention, you better be willing to take on the responsibilities and be willing to receive any punishments if and when you screw up. Then again, if these executives can't handle themselves in a reasonable manner with the power and responsibilities they had before, why trust these executives now? Oh well, I guess these executives did disprove the Randian/Libertarian/Austrian/Chicago economic hypotheses, that free markets are self regulating and of the presence of perfect information, so I guess it isn't all bad.

Re:This Is Madness

[kklein]

When you say "more liberal", do you mean "more left-wing"?

No, he means "git yer gubmit off my lawn."

Re:This Is Madness

[Chrisq]

Someone out there with a better idea ...

You mean I have to compete against innovation?!

... will raise a bunch of money, give it away for free, build scale and charge less to reach the audience ...

And my competitors can undercut me?! And it would be so different if you weren't in the for free market. Wouldn't it?

Re:This Is Madness

[Anonymous Coward]

This is madness! I demand protection against people trying to steal my customers with a better service/product and lower prices!

Ask the RIAA, there's quite good at that.

Re:This Is Madness

[jawahar]

Banks in India also say NO to stock markets

Re:This Is Madness

[falconwolf]

Look at his other business ventures after broadcast.com. They're all massive dogs.

I don't know, I don't watch sports. The only other business I know he's in now is Landmark Theatres, which is my favorite cinema chain. I haven't gone to a movie there that was a dog, box office sales wise at least. Actually he may be bringing cinemas into the 21th century. While other chains send movies on film to theatres he uses broadband to send those available digitally.

Of course I didn't find out he owned Landmark 'til after watching movies I loved that only played there to begin with. I noticed some of the movies was played at traditional theatres after being shown there.

www.lucernesys.com Horizon: Calendar-based personal finance

It doesn't look like it works with investment portfolios, does it? I've searched for FOSS programs that do but haven't been able to find any offering something more than bank account balancing. Certainly nothing like Quicken or higher priced packages. And I can't justify the expense now.

Falcon

Re:This Is Madness

[PastaLover]

For instance, the only reason they're thinking about universal health care now is because the corporations have started to realize that employer-provided health benefits put them at a disadvantage to companies in countries where they don't have to pay those costs. Notice that the insurance companies won't be out of the loop; more likely we'll still have health insurance, only it'll be mandatory and the employer won't be forced to provide it.

This is not how it works. Institutionalised healthcare is still payed for by the companies, they just pay it as an extra tax on employee pay. In fact, I think it's actually the other way around, since american companies can often get away with a much worse coverage than the universal system provides and thus end up paying comparatively less (while companies that offer higher payscales have to pay comparatively more). On the whole it is a lot more efficient to centralise, but it's not gonna work out cheaper for a lot of companies. The money still has to come from somewhere.

Re:This Is Madness

[mcgrew]

Most US corporations pay no federal income tax. Some pay no tax and still get grants (IBM for instance).

Live free, die hard

[AKAImBatman]

"Like every company [*deleted*], your lifecycle has come to its conclusion. Don't fight it. Admit it. Profit from it."

Fixed that for you. No business survives beyond their normal lifetime in the market. This is particularly true of technology companies which are forced to constantly reinvent themselves or become obsolete. While companies who sell a product can sometimes extend that product out a bit longer thanks to support contracts and BS marketing techniques, this is not sustainable.

What you end up with is the slow death spiral that was the hallmark of companies like SGI, SCO, and Novell. These companies followed the same business model for too long, slowly bled marketshare, and eventually reinvented themselves at the last minute, made a deal with the devil, or went out in a blaze of glory.

The lesson is simple: No matter how much of a cash cow your current product line is, you need to be investing in the R&D to compete in the next generation of products. Otherwise your competitors will get there first and make you ancient history.

Re:Live free, die hard

[MyLongNickName]

Tell that to this company.

Re:Live free, die hard

[AKAImBatman]

I fail to see the contradiction. While the article is light on details, it seems clear that Kongo Gumi kept on top of the latest technological developments over the millennium and a half they were in business. Clearly the construction technology has changed from the original Shitenno-ji temple they built to the Osaka Castle to modern skyscrapers.

If Kongo had remained in the business of building temples and not kept pace with construction technology, they would have been out of business over a thousand years ago.

Re:Live free, die hard

[tgatliff]

I agree... Its called capitalism... If true capitalism existed, then large companies would be rare because competition would quickly reduce their profit margins to the point where very little money could be made.

Also, Mark Cuban seems to misunderstand how industries are supposed to work. If you never OSS anything, how can we expect to ever continue building on something?? Meaning, if we have to pay a license to someone like Microsoft and/or Oracle forever, how can one expect that additional future advanced systems can be cost effectively built??

Finally, Mr Cuban made his money during a very unique time were pension funds and VCs had a massive liquidity orgy. Those days are over, and Mr. Cuban should accept that he was more lucky that smart...

Re:Live free, die hard

[iamhigh]

Interesting, but I am willing to be they reinvented their business several times. I doubt they would have stayed in business using tools an techniques from 578.

Re:Live free, die hard

[MrCrassic]

Zildijan, a very prominent manufacturer of drum cymbals, has been around for 400 years. Source: click

Sumitomo has been around since 1590.

IBM has been around since the early 1900s, and they are still hugely relevant today.

These are obvious exceptions to the rule, but it does show that if a company has a good thing going and can play its cards right, it can survive a long, long, LONG time.

Re:Live free, die hard

[Anonymous Coward]

If true capitalism existed, then large companies would be rare because competition would quickly reduce their profit margins to the point where very little money could be made

I think the opposite. If true capitalism existed there would be 1 gigantic company because it would have been able to integrate to the point where it locked up all the raw materials.

Also, one gigantic company would be able to hire the most goons to physically destroy their competitors' infrastructure.

Re:Live free, die hard

[timeOday]

The lesson is simple: No matter how much of a cash cow your current product line is, you need to be investing in the R&D to compete in the next generation of products. Otherwise your competitors will get there first and make you ancient history.

Really? Look at Microsoft, they have been paranoid of being eclipsed since day #1, and followed exactly the strategy you suggest, pouring untold billions into R&D - with scarcely any effect. Look at google, spinning off services madly, yet all their profit comes from their original business.

So I am leaning towards another simple conclusion: it's hard to make lighting strike twice. Maybe Microsoft's investors should have taken home the company's windfall profits home as dividends all these years instead of plowing them all into making sure google would be invented at Microsoft, which it wasn't.

Re:Live free, die hard

[falconwolf]

I agree... Its called capitalism... If true capitalism existed, then large companies would be rare because competition would quickly reduce their profit margins to the point where very little money could be made.

In a true free market and capitalism there's another reason large corporations would be rare, because many would have their corporate charters revoked [pdf warning]. Such as Exxon, those people who had their lives wrecked because of Exxon Valdez, have not received a dime from Exxon. And Union Carbide, for it's Bhopal disaster. There are more than 1000 Superfund sites listed, many created by businesses, which taxpayers will pay to clean up if they are ever cleaned up.

Falcon

Re:Live free, die hard

[AKAImBatman]

IBM has been around since the early 1900s, and they are still hugely relevant today.

They are still hugely relevant by making punch card readers and typewriters? Or are they hugely relevant for constant innovation and invention? (See: IBM R&D budget)

Sumitomo has been around since 1590.

And they're still a medicine and book store, right? Or did they reinvent themselves as a copper smelter in the 1800's with a revolutionary technique, then expand into "banking, warehousing, electric cable production and more"?

Zildijan, a very prominent manufacturer of drum cymbals, has been around for 400 years

That's the closest company you've named to being able to continuously milk a product for an extended period of time. Of course, as your own link shows, the Zildjian company has gone through a number of improvements, changes, and reproductization of their product lines over the years. The cymbals you purchase today are a long way from the original cymbals of the 1620's.

Re:Live free, die hard

[timeOday]

PS props to Apple for bucking the trend and making lighting strike seemingly at will. I think Jobs must have sold his soul to the devil.

Re:Live free, die hard

[Todd Knarr]

Actually I think IBM's corporate continuity goes back to the late 1800s. Tabulating Machine Company was formed in 1896, and the Bundy Manufacturing Company (another of the 4 that merged to form CTR Corporation, which eventually became IBM) was founded in 1889.

Re:Live free, die hard

[Anonymous Coward]

Interesting, but I am willing to be they reinvented their business several times. I doubt they would have stayed in business using tools an techniques from 578.

Tell that to the Vatican

Re:Live free, die hard

[jeffshoaf]

I think Jobs must have sold his soul to the devil.

I think it was his liver...

Re:Live free, die hard

[Anonymous Coward]

From the Wikipedia article:

Before its liquidation, it had over 100 employees and annual revenue of ¥7.5 billion ($70 million) in 2005; it still specialized in building Buddhist temples.

(emphasis mine)

This is a very unique market though - very few cultures still build/maintain so many structures from their architectural past.

Re:Live free, die hard

[Attila Dimedici]

I read the link. The company was bought out by a competitor, so it makes the point of the original poster. Just because some company had a 1400 year lifetime in the market doesn't mean that any company will outlive its lifetime in the market. Look at the top companies in the world, only a handful of them were even in existence 100 years ago. Few of them were in business 50 years ago.

Re:Live free, die hard

[cgenman]

There seems to be a weird thing in "the new economy" where the product frequently is the business. Facebook, Livejournal, etc all identify by their product rather than by their model.

Imagine if HP identified as HP Largescale Business Dot Matrix, and sold just one model of Printer. No matter how good that one dot-matrix printer was, they'd be out of business the moment inkjets hit.

Re:Live free, die hard

[tsalmark]

There core business was building Buddhist temples, not much has changed in this field in the last 1400 years.

Re:Live free, die hard

[kthejoker]

See also: AT&T, Nintendo, Daimler Benz, General Electric, Anheuser-Busch, Coca-Cola, Heinz, Procter and Gamble, Ericsson, and a ton of other companies founded in the 19th century and still kicking today.

Re:Live free, die hard

[MyLongNickName]

I think the absurdity is "no company outlives its lifetime". By definition, this is true. Unless we have some type of zombie company, I can't think of how you would falsify this claim...

Re:Live free, die hard

[Anonymous Coward]

Tell that to this company.

Damn! I've been bragging about Stora Kopparberg (now Stora Enso) to foreigners and claimed it was the oldest company in the world with its first known share in 1288 and starting operations some 30 years after that. It's not even close and add to injury it changed operations in the 1980's from mining to timber.

Well, as far as I can tell we still have the oldest central bank dating back to 1668 (as a state bank) or 1656 (as a quasi-private central bank, but everybody knows that those never last ;).

Re:Live free, die hard

[ConceptJunkie]

If that was meant to be a joke, it was amusing. If it wasn't meant to be a joke then it's inaccurate.

In truth, the Church has changed a lot about the way it operates even if it hasn't changed its doctrine. The Council of Trent comes to mind. The Church has evolved significantly (sometimes being dragged kicking and screaming, sometimes being ahead of the curve) since the early days of Christianity. Not only changing political situations (e.g., Emperor Constantine, the unification of Italy), but also refinements and reformations of social and political teachings (e.g., the aforementioned Trent, as well as the First Vatican Council).

Re:Live free, die hard

[Mister Whirly]

With regards to IBM, they have been making business machines the entire time (after all it is right there in their name). Before computers, most business was conducted on typewriters. Now computers are used. You could also call "punch card readers" by their other name - computers, which IBM is still very much in the business of producing. Things have changed less than you think.

Re:Live free, die hard

[ais523]

As I said elsethread, you forgot about SCO. (It fits the definition of a zombie company pretty well at the moment, I think.)

Re:Live free, die hard

[tendrousbeastie]

Spot on. Which is why during the United States' Savings and Loan crisis in the 80's a lot of the finance institutions were refered to as zombies.

Google

[hobbit]

Google doesn't live by free. It lives by selling advertising.

Re:Google

[Twillerror]

Exactly much like NBC, CBS, or ABC.

I think the thing missing is some underlying infrastructure that companies can tap into. I used to subscribe to Slashdot, but quite frankly I don't anymore because I'm just too damn lazy.

The cable market tends to work okay. You can argue price, service, etc, but the idea of subscribing to a master provider and getting sub-services seems like something internet companies could really use.

Internet TV is begging for this. I don't mind paying for Hulu...even if it does have some advertising in it. I like my cable TV, but the entry point for cable channell is still way to high. Internet TV chanells could easily tie into Hulu...which in turns ties into a large subscription.

I'm suprised Google hasn't built this to be honest. It be nice to pay for Hulu thru my Google account...any number of valuable services would popup just like iPhone apps.

Re:Google

[B'Trey]

Which is exactly why Mark Cuban is so misguided. No one lives by free. That is, you might start up a business that lives by free and last until your money runs out, but you either find a way to monetize your customers or you go under. Companies which "live by free" actually live by a business model that includes free but isn't exclusively free. And such businesses are no different from any other business. Every business, regardless of whether or not it has free as part of its business model, faces competition and threat from other businesses. It's the way capitalism works. Woolworths and HQ, for example, didn't go out of business because of anything to do with "free." But they were still out-competed and failed. If you take the reference to "free" out of Cuban's comments, he's simply describing the challenges facing any business in a capitalistic system. Cuban of all people should know that.

Re:Google

[vainvanevein]

I think he means companies that "live by free" are ones that give content or a service away for free and attach advertising to it.

Re:Google

[dontmakemethink]

By "free", Cuban is referring to the "not having to pay" part. Of course they're generating revenues to stay in business, but as someone who has never been bothered by the ads or even clicked on one, I use Google's services at absolutely no cost, a.k.a. free. Offering free services is a business model that Cuban claims is near impossible to perpetuate, rather it has a life cycle terminated by the introduction of a better and/or more effectively promoted free service.

However there is an angle that makes a difference, user investment. Facebook will hold up against any search engine because users have invested the time and effort to grow their friend networks. Switching to a competitor would mean starting from scratch, but switching search engines is effortless. I imagine that is part of why Gmail exists, to get people to invest and depend on them. Let's see how they fend off Microsoft's "decision engine", whatever that means...

Re:Google

[Anonymous Coward]

Technically, Woolworth's is still in business. They are now known as Foot Locker. Woolworth's bought the shoe store a long time ago, and that was the only part of the company to survive.

For a while, Foot Locker's stock symbol was Z because that was Woolworth's.

Re:Google

[ucblockhead]

Note that NBC + Comcast as a cable provider is almost identical to Google + Comcast as an ISP.

But "free" content is older than television. Just look at radio. Just look at free newspapers.

Re:Google

[Anonymous Coward]

Exactly!

Old Mark seems to think that there is only one customer in the market place which is completely wrong.

In most businesses there are at least 2 types of people you cater to. (usually more)
In the case of successful web companies, 2 of them are advertisers and customers. (casual browsers can also be a target too, from search engines and the like)
And those tend to be split into 2, too:
Site needs to look nice for new advertisers
Site needs to be good for keeping current advertisers
Site needs to be free for the majority of customers
Site can cater to those willing to pay for extra features. (such as better search, more pictures in profiles, etc)

The last one doesn't appear to be as popular anymore, which is a bit silly because there are people out there who are willing to pay for more features if they are offered.
Just imagine how much more money Myspace would have made if they kept the Profile Pictures limit at whatever it was again, and then offered unlimited pictures for a fee. (per month or per annum, or a premium price that will last forever)

Re:Google

[Tielman]

Mark Cuban's example of Google is also way off base.

Google does use a "proprietary" software system: Google File System, which is the core of all of their major systems, including: Search, Gmail, Maps, Google Office, etc...

Google's core business is selling ad space.

What makes them so different than any other business Mark?

The "free" stuff your bantering about shows your clueless....

Re:Google

[Anonymous Coward]

No, the point is that one way to compete is to have lower cost products. For example, an airline may reduce fares to try to eliminate competition from another airline. When your product is free to the consumer, there is no way to lower the cost to stave off competition.

Since nobody pays to upload or download videos on Youtube, there is no way for Youtube to stay at the top by providing lower prices. All they can do is offer better functionality.

dom

Re:Google

[Quikah]

However there is an angle that makes a difference, user investment. Facebook will hold up against any search engine because users have invested the time and effort to grow their friend networks. Switching to a competitor would mean starting from scratch, but switching search engines is effortless.

How is Myspace doing these days?

Crazy old witch

[mcgrew]

Rather than attend high school for his senior year, Cuban enrolled as a full time student at the University of Pittsburgh. After one year at the University of Pittsburgh, he transferred to Indiana University's Bloomington, Indiana campus and graduated in 1981 with a Bachelor's Degree in Business Administration.[9]

Aren't these the guys who ruined the economy?

Re:Crazy old witch

[MyLongNickName]

Yup. And scientists gave us nuclear bombs. That's why I don't listen to anyone with a kolidge degree. Fuck global warming. Fuck losing weight. Fuck a 13 billion year old universe.

Re:Crazy old witch

[eldavojohn]

Aren't these the guys who ruined the economy?

It's easy to drop the blame on MBAs. And being a software developer I don't think much of them. I would urge you to refrain from placing all the blame on them ... it would be similar to saying "Isn't it software developers fault that copyright law is violated at large today?" Listen to this recent This American Life episode on the situation that was created by rating agencies. By the way, the first two parts of that are amazing and I feel more informed just listening to those three episodes than I do listening to any news outlet.

Your blame would be more appropriately placed on the rating agencies like Standard and Poors or Moody's and Fitch. There's probably a few MBAs working there. Or maybe the people who were playing those rating agencies off each other to get their securities rated higher? Or maybe the people who knew these securities were not AAA but bought them anyways and treated them as such (and that was a worldwide problem). It was an entire environment that created a problem for the world economy.

I'm not fan of Cuban but I don't think he was a part of any link in this chain of failure.

Re:Crazy old witch

[Anonymous Coward]

a 13 billion year old universe.

The apparent age of the universe would depend on the observer's tau.

Re:Crazy old witch

[Hognoxious]

Nah. You need at least a Master's to do that.

Re:Crazy old witch

[dyingtolive]

Personally I much more resent the idea that certain people imply that MBA's are capable of doing anything as significant as destroying an economy.

Re:Crazy old witch

[MrCrassic]

I don't know about you, but if he somehow became a billionaire entrepreneur, then he must have done something right.

Re:Crazy old witch

[TooMuchToDo]

I wouldn't call being at the right place at the right time doing something right. Most people call that "luck".

Re:Crazy old witch

[sgt scrub]

If you've ever worked for Cuban (audionet/broadcast.com) you would know this "epiphany" means he is up to something. If you make the mistake of putting him in the same box as the morons running banks and car companies you will be putting yourself in the same boat as the people that REALLY ARE in that category (yahoo.com).

Re:Crazy old witch

[Anonymous Coward]

Just like Bernie Madoff, amirite???

Re:Crazy old witch

[Hijacked Public]

He certianly benefitted from good timing, but Broadcast.com was a profitable venture on its own before Yahoo bought it. He also had enough financial skill to sort the good offers from the bad. It isn't like everyone in the dot com business made out like bandits.

Consider that Slashdot sold to Andover in the same time frame, then on to LNUX not long after that. Cuban owns the Mavs and Taco's LNUX shares probably wouldn't buy an ice cream cone.

Re:Crazy old witch

[Anonymous Coward]

MBA's ruined the economy?

Har! Fat, lazy Americans too apathetic to do anything about the corrupt lobbyist regime and corporate dictatorship but whinge and moan about it on online forums aka "/." are what destroyed the economy (given as a small but relevant sample of the general audience).

This discussion, and the topic, is a perfect foil for the reason the American Economy has begun (yes, begun ... you guys haven't even seen the bottom of your barrel yet) to collapse. "Free" in a pure capitalist/consumerist economy just invites greed and laziness. "Free" means struggling to monetize the wallowers who only show up when the bucket is dumped into the trough. FOSS illustrates this perfectly, as a vanishingly small percentage of people who use FOSS ever contribute anything back to the community, and worse damage it by monetizing other people's "Free" for their own gain. In that kind of environment, how can "Free" do anything but fail in a society that gleefully enables patent trolls, decades-long lawsuits, and people who can look you in the face and tell you with pure conviction that they only download movies because they're altruistic freedom fighters "fighting the man".

"You can't change the world, but you can make a dent."
  -- Smoochie the Rhino

Re:Crazy old witch

[mcgrew]

Isn't it software developers fault that copyright law is violated at large today?

No, the software developers only make tools. Blaming software developers for copyright infringement is like blaming gun manufacturers for war. We were making cassettes from our friends' LPs long before the first digital recording was made. What's more, it was LEGAL. The reasons for its outlawing are purely bogus.

I agree with the rest of your post.

Re:Crazy old witch

[mcgrew]

Yup. And scientists gave us nuclear bombs

Which proves that they know what they're talking about, unlike economists. If economics, sociology, etc were anything at all like physics, there would be no poverty or hunger.

Wall Street is just a big corrupt casino. You don't invest in stocks, you gamble on them.

Re:Crazy old witch

[thethibs]

No. It was the quants—Physicists and mathematicians with overblown confidence in their formulae.

Re:Crazy old witch

[Anonymous Coward]

Yup. And scientists gave us nucular bombs.

I reckon I done fixt that for ya.

Re:Crazy old witch

[thethibs]

Interesting that in a technical forum anyone would give credit to "luck".

There is no luck, just being alert and open to opportunities, having the courage to act on them, and having the intelligence to bend them to your benefit..

Re:Crazy old witch

[mcgrew]

I don't know about you, but if he somehow became a billionaire entrepreneur, then he must have done something right.

Like an AC said a little farther down (my emphasis), "Cuban's advice is so 1998. Build up mind share, then cash out and let the company crash. It worked for him."

Screw everyone else, right?

Re:Crazy old witch

[Truth is life]

There is no luck, just being alert and open to opportunities, having the courage to act on them, and having the intelligence to bend them to your benefit..

This is untrue. Of course there's luck, it's by definition what occurs that you cannot control or influence. For example, if you had lined up a deal to sell your company for a huge amount of money but then the economy crashes around you and the deal falls through...that's bad luck. Or if you're a brilliant engineer whose ideas would be worth millions...but you were born in the Soviet Union. Or your company develops a revolutionary new product...and the lead engineer gets hit by a bus. Luck controls the availability of those opportunities in the first place, and (sometimes) their success.

Re:Crazy old witch

[thethibs]

What you're describing is poor planning.

Re:Crazy old witch

[hobbit]

Like for instance being alert and open to the fact that there's a lottery each week, having the courage to buy a ticket, and having the intelligence to have previously time-travelled into the future to determine which numbers are going to come up. Who needs luck?

Re:Crazy old witch

[Truth is life]

What you're describing is poor planning.

No, what I'm describing is bad luck. It has nothing to do with how well or poorly the individual or business planned. Even the best plans cannot cover all contingencies, some contingencies will ruin you no matter how well you plan for them, and some things you cannot possibly plan for at all. Would you say that the brilliant Russian engineer planned poorly in his parents?

Re:Crazy old witch

[poopdeville]

You're an idiot.

Re:Crazy old witch

[Anonymous Coward]

brilliant !!! well said :)

Re:Crazy old witch

[sjames]

So did Bernie Madeoff. He may HAVE done something right, but becoming a billionaire doesn't demonstrate it.

Re:Crazy old witch

[thethibs]

Your sorry attempt falls flat, being examples of a lack of what you call luck. Clearly, for these people, luck doesn't exist.

You'll need to do better. You might get yourself off the hook by equating random events, chance, and luck. But that begs a whole new set of questions.

The point is that you can't win if you don't play. What you call luck is is a combination of personality traits that repeatedly puts the "lucky" person in a position to harvest opportunities.

Re:Crazy old witch

[thethibs]

Oh yeah. Your Russian Engineer. Right after getting his degree, he was offered an opportunity to emigrate and go to work for a small American startup. He decided to stay in Russia instead. Is he still "unlucky"?

Re:Crazy old witch

[Truth is life]

Oh yeah. Your Russian Engineer. Right after getting his degree, he was offered an opportunity to emigrate and go to work for a small American startup. He decided to stay in Russia instead. Is he still "unlucky"?

No, of course not. (Though remember, I'm talking about the USSR, not modern-day Russia. It's pretty unlikely that he'd be allowed to emigrate) That is an example of what you're talking about, where your success or failure is under your control. Luck refers to situations where you cannot control or substantially mitigate the effects of something, and you cannot reasonably foresee and avoid that situation in the first place. The Soviet engineer obviously meets those criteria, since he cannot choose his parents, and even if capable of becoming rich will find that extremely difficult or impossible.

Re:Crazy old witch

[Truth is life]

Your sorry attempt falls flat, being examples of a lack of what you call luck. Clearly, for these people, luck doesn't exist.

This makes no sense at all. Luck does exist for them; it's just bad.

What you call luck is is a combination of personality traits that repeatedly puts the "lucky" person in a position to harvest opportunities.

And what I'm saying is that sometimes those opportunities are simply not available due to factors outside of the person's control or fall thorough (again, due to outside factors).

Their mindset and personality has an effect on how well they can adapt to their luck, but no one, no mattered how well prepared or organized or dedicated or ruthless or whatever, can reasonably expect to win them all or to have every opportunity succeed. Someone who is a whimpering idiot barely capable of recognizing a million dollars when it strikes him over the head might be successful because his uncle is the lead investor in a new, highly successful firm.

You do seem to be misunderstanding my point, which is that there is such a thing as bad luck...the outcome of chance events not going your way...and this can, and does, have an effect on real people, and real businesses. Someone may have the best ideas in the world, but not be able to publicize or use them. My point was not to defend calling some people 'lucky' rather to point out someone with the mindset and ideas you identified with this state may still fail. There were probably many other people with the same mindset as Cuban, but whose plans failed for reasons outside of their control.

Re:Crazy old witch

[thethibs]

Of course, things happen that are out of our control, whether out of sight or just random.

This does not justify characterizing luck as something you have or lucky as something you are. No one has a field that is either attractive or repulsive to the fates.

Horizons and random events are uniformly distributed across all of humanity. If you must use the term, we are all equally lucky. It's only after the fact that it seems otherwise. "Luck" is an artifact of the human obsession for finding easy explanations. I prefer rational explanations.

Re:Crazy old witch

[Truth is life]

Horizons and random events are uniformly distributed across all of humanity. If you must use the term, we are all equally lucky. It's only after the fact that it seems otherwise. "Luck" is an artifact of the human obsession for finding easy explanations. I prefer rational explanations.

Of course, and I was never disputing *that*. I was disputing the notion that chance and accidents of birth, parentage, etc. can be totally discarded or ignored when talking about someone's success or lack thereof, which is what you seemed to be saying.

Re:Crazy old witch

[thethibs]

That's exactly what I'm saying.

The simple truth is that we can't predict what would have happened if one or more of the "accidents" had happened differently. There are many paths to the present. If one of them, the one we know about, had been blocked, who's to say that the end-effect would have been substantially different?

Isn't this true of almost all businesses?

[Palestrina]

Whether you are selling automobiles or donuts, there is going to be competition, and you are only as good as your last quarterly earnings report. In any case, competition and barriers to entry has more to do with the nature of the technology and lock-in and lock-out factors like propriety interfaces and patents than it is concerned with the business model. Maybe the point is just that with a free model, you have less room for error in your strategy?

Re:Isn't this true of almost all businesses?

[Braedley]

Techdirt has a post saying just this. Cuban fails to realize that all his arguments don't apply to only free models, but rather any business that sells a product or service, regardless of the price (free or otherwise).

Re:Isn't this true of almost all businesses?

[Anonymous Coward]

compare and contrast:

automobile unions - too big to fail

donuts - can make you too be to flail

Re:Isn't this true of almost all businesses?

[cgenman]

Step 1: Come up with a new idea for making money that nobody has ever thought of.
Step 2: Make as much money as you can, while other people scramble to get into the market.
Step 3: Compete a bit with people, staying in the game as long as you can still make money at it.
Step 4: Move on to something more profitable.

Somehow people have confused getting as big as possible for making as much money as you can. Without making money, big = bad.

Re:Isn't this true of almost all businesses?

[Atario]

Whether you are selling automobiles or donuts, there is going to be competition, and if you're publicly funded you are only as good as your last quarterly earnings report.

Fixed that for you.

Sounds self-contradictory

[GodfatherofSoul]

So, you have to only invest in what is profitable, yet at the same time you have to invest in research (which by nature isn't profitable) to find the next product that will be profitable when your old products are outdone? And, what's so insightful about saying that someone coming along and giving away your "free" product for even "freer" is some inherent danger to free services? If I bake cookies for a living, and some philanthropists starts giving away cookies of a similar recipe for free (with his business logo on them), of course my business will be hurt.

Re:Sounds self-contradictory

[wasabu]

There is no such thing as free. Even someone who has absolutely no interest in money at all is not working for free. They're doing it for certain gratification. It's harder to translate such feelings into denominations of currency 'value', but all the same it is a tangible gain. Now when you say that Research isn't profitable, you make a grave mistake. The dynamic you miss is time. Even selling a potato is not 'profitable' for a period of time (ie until you spend the gain on something tangible). The profitability of Research is hard to doubt, except for the short sighted.

From Mark Cuban? Take it with a grain of salt

[i_want_you_to_throw_]

So he built broadcast.com, sold it to Yahoo! and made a ton of money: what else has Cuban done? I mean really?

I tend to take everything he says with a grain of salt.

Re:From Mark Cuban? Take it with a grain of salt

[192939495969798999]

He's indirectly asking us to learn from his example. Build a free empire, then sell it at its peak, before anyone realizes that it's unsustainable.

Re:From Mark Cuban? Take it with a grain of salt

[Anonymous Coward]

what else has Cuban done?

Two words: DALLAS MAVERICKS

Need I say any more?

Re:From Mark Cuban? Take it with a grain of salt

[Anonymous Coward]

Agreed. Why is this even news worth commenting about. Cuban was a lucky schmoe during the first Internet bubble. Winning the 'lottery' doesn't all of a sudden make you a 'smart' person worth listening to.

Re:From Mark Cuban? Take it with a grain of salt

[dfghjk]

While I couldn't agree more, I looked for this comment earlier in the Andreeson article and didn't see it. Both are worthless.

Re:From Mark Cuban? Take it with a grain of salt

[orion67]

what else has Cuban done? While it's easy to poke fun at Cuban when he behaves like a spoiled child, most people would agree that he's made some very wise business decisions. Between his basketball team ownership and his involvement in many other businesses like HDTV programming, there is plenty of evidence of "what else" he's done. One small example: you know those three-sided 24 second clocks on top of the backboards in the NBA now? Probably wouldn't have happened if Cuban wasn't listening to his customers: http://creatingcustomerevangelists.com/resources/evangelists/mark_cuban.asp

Re:From Mark Cuban? Take it with a grain of salt

[jd2112]

Let's see... He founded a company, Sold it for several metric sh*tloads of money before the market crashed, and, and... There's got to be something...

Oh yeah, he was on Dancing with the Stars.

Re:From Mark Cuban? Take it with a grain of salt

[falconwolf]

So he built broadcast.com, sold it to Yahoo! and made a ton of money: what else has Cuban done? I mean really?

He started other businesses before Broadcast.com. He started MicroSolutions which Ross Perot's Perot Systems was one of his biggest clients. He later sold it to Compuserve.

Falcon

Re:From Mark Cuban? Take it with a grain of salt

[colinrichardday]

Yes.

Re:From Mark Cuban? Take it with a grain of salt

[owlnation]

To be fair to him... He has done a LOT of good for the Independent Film Industry. He's produced a lot of good, and some great, movies (Good Night and Good Luck, for example). There's a lot of indie filmmakers wouldn't have had a break if it were not for Cuban.

But yes, I don't agree with his position on this either, and he is more of a very lucky guy than an insightful and gifted individual.

Re:From Mark Cuban? Take it with a grain of salt

[Anonymous Coward]

Insofar that I have no idea what you're talking about, and I kind of like it, please, no.

Re:From Mark Cuban? Take it with a grain of salt

[Anonymous Coward]

more than you have done...if he's salt what are you?

Re:From Mark Cuban? Take it with a grain of salt

[Anonymous Coward]

One small example: you know those three-sided 24 second clocks on top of the backboards in the NBA now?

Yea, that's such a dramatic jump in logic and reasoning from the matside wrestling scoreboard. That alone doesn't make him much more relevant.

STFU, Cuban.

[Anonymous Coward]

You got lucky because Yahoo was dumb and made you a billionaire at the height of the dotcom bubble. There are no remnants of the service you founded anywhere on the Internet. You are the equivalent of a lottery winner and have zero credibility.

You are a stupid fratboy who got rich thanks to an ill-timed power grab by an unwise corporation, not a respected voice whom anyone cares about. Please enjoy your "broadcast.com" (lol) windfall in private and stop talking in the presence of others who might report your idiocy. Thank you.

Re:STFU, Cuban.

[TheVelvetFlamebait]

Aside from simple envy, I fail to see why you hate him so. Perhaps all he did was get extremely lucky, perhaps there was a bit of skill involved. Either way I really don't see why he's a stupid fratboy, or why his opinions are idiocy.

Re:STFU, Cuban.

[PeanutButterBreath]

Either way I really don't see why he's a stupid fratboy, or why his opinions are idiocy.

Well, there's crap like this. . .http://sports.espn.go.com/nba/playoffs/2009/news/story?id=4157481

Re:STFU, Cuban.

[OrangeTide]

AC is right. Cuban's success is at least partially due to serendipity, I would argue that is mostly due to that.

It's not envy that people hate on Mark Cuban. Because many of us respect people who built up their fortunes, even if we hate the things they do. Examples would be Larry Ellison, Steve Jobs, Bill Gates, Warren Buffet, George Soros, etc.

That said, Mark must have some skill in the negotiation room to have sold his company. The ability to market your business to another business is a pretty unique skill. But if he did that trick today he would be in the same position as many of my friends who have done that. Have enough money in the bank to support themselves for a couple years until they sell their next start-up.

Winning it big on one shot is not as impressive as consistent success to me.

Re:STFU, Cuban.

[bogjobber]

It's not his fault Yahoo overpaid. I think it's a pretty good sign of his business sense that he is one of the few .com billionaires that has kept and expanded his wealth. Since he sold broadcast.com he's been a successful investor, most famously creating the HDNet TV channel and turning around the Dallas Mavericks.

What have you done to make anybody trust *your* opinions? You won't even publicly post your opinions under your own name. At the very least, treat him like another blogger and criticize his opinions, rather than the business that he sold ten years ago.

Is it just me or is slashdot asshattery getting worse than normal? I can't believe how many completely substanceless posts such as this are modded up in this discussion. How is this possibly considered informative? Show a little restraint people.

Re:STFU, Cuban.

[puppetluva]

+1

Cuban is con man. I heard the sales pitches for broadcast.com when he and Mary Meeker (unethically on her part) were trying to sell that scam. His lies are thick, he relies on bullying/shaming people and he took a lot of money Yahoo could have used to help free software and be a healthier business.

He is not a typical clueless MBA, he is a con-man and should be actively avoided.

I disagree.

[apodyopsis]

I disagree.

I think that when any technology - be that DVD, FaceBook, Internet Explorer - reaches a mass audience and is perceived to be good enough to meet the users needs it is more or less impossible to dislodge even when there are technically superior products out there.

The only way a new product will ever dislodge a entrenched rival is when they offer something unique and compelling or are readily interchangeble with the old one.

I kind of get what they are saying, but I see more evidence of entrenched mass market products that are seen to have reached an acceptable level of functionality and ease of use.

Re:I disagree.

[AKAImBatman]

I disagree with your disagreement. If that were true, then why are DVD sales dramatically declining?

http://www.broadcastingcable.com/article/190848-DVD_Backend_Is_Dwindling.php?
http://www.icv2.com/articles/home/11879.html
http://www.nypost.com/seven/12042007/business/dvd_isaster_sales_806649.htm
http://www.cinemablend.com/television/Sales-Decline-Portend-Possible-DVD-Doomsday-2110.html

Meanwhile, digital sales of video content are on the rise:

http://www.reuters.com/article/pressRelease/idUS148561+29-Aug-2008+BW20080829
http://www.michaelgeist.ca/content/view/1621/125/

I'll grant you that online sales of video content is still a developing market. But it is a market that is clearly putting a dent into the traditional distribution model of DVDs.

I think your confusion stems from far too narrow a view of the market. You're looking at Bluray discs and noting that they are failing to dislodge DVDs en masse. The reason is that Bluray is not the future. The market is going a radically different direction with its technology.

Re:I disagree.

[orthancstone]

I think that when any technology - be that DVD, FaceBook, Internet Explorer - reaches a mass audience and is perceived to be good enough to meet the users needs it is more or less impossible to dislodge even when there are technically superior products out there.

Popularity may make certain products last well past their expiration date, but old junk eventually gets canned. DVD will go away, Facebook will be replaced, and IE's losing market share all the time to competitors. 10 years ago you could've argued which was the best of 5 or more search engines. Now you'd have a hard time thinking of 5...period.

Re:I disagree.

[Maximum Prophet]

why are DVD sales dramatically declining?

Market saturation?

I can get almost every movie I want (older titles) borrowed, used, or from the library. VHS tapes wear out much faster than DVDs, and even when a DVD gets scratched, a little polishing compound will bring it back. I saw some DVDs at Staples that would self destruct after 48 hours. For $0.25 - $0.99 I might have tried one, but the titles were terrible and they wanted $5.00 each. No thank you.

A lot of the online content was never available on DVD because it didn't have enough audience to justify a pressing. Online will take over because it offers relatively instant gratification, a big feature that DVD and Blu-ray can't match. People like getting what they want.

Re:I disagree.

[leppi]

I know that you enfatically said "I disagree." (twice), but I'm not sure that you really do.

He said:

"Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience."

You said:

"The only way a new product will ever dislodge a entrenched rival is when they offer something unique and compelling or are readily interchangeble with the old one."

Sounds like the market forces that he describes are part of this "new economy" where huge amounts of venture capital can be raised and thrown away trying to create the "next big thing". The next big thing in almost all cases improves on what has came before, just as you said "something unique and compelling".

Overall, I think the article is a good one, and his point is pretty accurate. I don't think it's revolutionary, but there are some ideas in there that I have never thought about in quite the way that he is going into.

Really, is that you, Satan?

[Missing_dc]

The summary sounds like a seduction attempt.....

Like bad legislation, they must constantly introduce evil ideas into major corporations and the general subconscious knowing that eventually, bit by bit, we will accept, and thereby do evil.

It is a game of relativities and waiting.

Revenue??

[twmcneil]

I wonder if he'll remember to include a revenue source in his plan this time.

Re:Revenue??

[TheVelvetFlamebait]

Oh god, I knew I forgot something!

Google should worry about its BlackSwan

[Anonymous Coward]

I just surfed to blackswan.com and got a message that it had 'just been registered'.

Re:Google should worry about its BlackSwan

[ribuck]

The meaning of the black swan is simply that we can't always expect to predict the future by extrapolating from known trends.

See: What does the black swan have to do with predicting the future?

WE live in an art economy.

[tjstork]

WE live in an art economy. That is, at the consumer level, the systems that we use are often judged by their novelty and their entertainment value. I would think most social networking sights ultimately wind up as a sort of a performance art piece, where we are the performers. We get bored with it, and move on. To say that you need to fund R&D is almost besides the point. Social sites need to have R&D, for sure, but what they really need is insight and hitmakers. You have to run them almost like record companies and make stars of the designers, changing things every time based upon the new view of the artist.

Re:WE live in an art economy.

[imgod2u]

If that were true, we'd see cosmetic changes directly proportional to the amount of users and popularity. This isn't true. Obviously it isn't all about novelty. As for entertainment value, well, guess what social networking sites provide in those cases? That's right, talking to your friends.

Now, while it may not seem like a lot to you to, say, build a cross-indexing, real-time database to connect people by favorite type of animal, color, sushi roll, etc. it's actually an engineering monstrosity when considering millions of users.

It's not always true but the biggest reason a bunch of people chooses site A over site B is over the features and ease-of-use site A offers over site B. Facebook lets you limit access to your friends. Hell, I'm surprised that it doesn't work with a tiered system. Where only "bff's" are allowed access to those embarrassing party photos, whereas "this guy I know" can only see certain things.

That's innovation and it takes man-months of engineering behind it.

Which country do you live in?

[Colin Smith]

ixed that for you. No business survives beyond their normal lifetime in the market.

Well. that's clearly not the case.

Goldman Sachs, Bank of America, JP Morgan etc etc etc. If you have a friend in the government, you can get them to tax the people to guarantee your profits.

 

Product Anyone?

[Anonymous Coward]

How about creating and selling a product that people want to have and are willing to pay money for? That seems to be more intelligent than giving away for free. The majority of the "for free" company will cease to exist when the next internet bubble (the "Web 2.0" bubble) will burst, ya know...

Re:Product Anyone?

[Maximum Prophet]

The problem is that there are products that people want, but they don't know they want it. Art is the classic example. Do you want a painting by Joe Shablotnic? Joe has to give away some of his art before anyone will buy it.

A problem with the internet, is there are thousands of Joe Shablotnics out there, and they all are giving away their art. A consumer can simple move from one Joe to another as each starts to charge for his work. Soon, no-one can make any money.

As far as the free companies failing, 4/5 of all companies fail in the first five years, so this isn't surprising.

Re:Product Anyone?

[V!NCENT]

Web 2.0 will certainly not burst. All you do as a large web 2.0 company is buy more servers and bandwith the more user you get. The more users you get the more advertisement revenue you get and so the more money you make... That's it. So why should it burst?

A bit naive

[xednieht]

Over-simplified. While Free is certainly not a sustainable business model, I'm not sure I see the connection between the topic of the article and the companies that were used as examples. Google, MySpace, and Facebook are not free by any stretch. They offer free services on the consumer facing side of their value model, but on the business end they generate plenty of cash from charging for the eyeballs they bring to advertisers.

Twitter is the only company mentioned that has been reluctant to monetize their traffic. Not because they can't, but more so because of some philosophical reason they choose not to. Yet despite that there are third parties that are monetizing Twitter's traffic, as in:

http://tech.slashdot.org/story/09/07/05/2151220/uSocial-Sells-Twitter-Followers-By-the-Thousand

Re:A bit naive

[Mesa MIke]

> They offer free services on the consumer facing side..

Yep. That's what we, the users, will buy. Me anyway.
One wonders why classmates.com persist in their charge-the-consumer business model. Surely they are losing out to Facebook, Myspace, etc. big time. Classmates gets no money from me, and since it is useless otherwise, they get no traffic from me. They lose. Facebook rawks.

1998 all over again

[Anonymous Coward]

Cuban's advice is so 1998. Build up mind share, then cash out and let the company crash. It worked for him.

Any company will shrivel and die if it doesn't adjust, even a company that was once at the top of the Fortune 500. Free has nothing to do with it.

Black swan theories

[OzPeter]

In being Australian, I grew up with the notion that Black Swans were the norm. It was only when I went to Europe did I see the funny looking white swans.

Good.

[John Hasler]

> Internet entrepreneur Mark Cuban writes that the problem with companies who have built
> their business around free is that the more success you have in delivering free, the
> more expensive it is to stay at the top.

It is best that no one stay on top.

free vs non-free

[Anonymous Coward]

Question: If you live Non-free, would you not die Non-free also?

If anything, he's got it backwards

[Zigurd]

As others have pointed out, free online services are no more susceptible to a Black Swan Competitor, or even an ordinary competitor, than any other business. If there is a distinction, it is likely to be that free Web services are especially governed by first mover advantage and category domination such that they are less in danger from Black Swans than, say, a trucking company or a chain of coffee shops.

Re:If anything, he's got it backwards

[Anonymous Coward]

free online services are no more susceptible to a Black Swan Competitor, or even an ordinary competitor, than any other business

The only difference is everyone can see what you are doing, and the start-up costs are relatively low.

bizarre

[FranTaylor]

How is google free?

The advertisers pay.

People who want premium services pay.

The rest of us pay with our time and our eyeballs, looking at ads.

So.....just like all businesses

[imgod2u]

This is different than any other business.....how?
The longer something remains in the market, the more the profit for that item approaches zero. Even paid service. The only time this isn't the case is either in a monopolized market or when government steps in. That's why companies in the free market have to constantly innovate and come up with new things that the competitor doesn't have. This notion that any business model can guarantee that you'll make money forever once you've come up with one idea is a myth.

Re:So.....just like all businesses

[grumpyman]

This notion that any business model can guarantee that you'll make money forever once you've come up with one idea is a myth.

RIAA thinks differ.

At first thought he was arguing against it

[Dan667]

But he is making a valid observation. If you sit on your business model you will end up like the RIAA and be clinging to it as everyone else passes you by. Cash in while you can knowing it could die abruptly, and make sure you have enough R&D to have the next product in the chamber. It is the only way to do business (and actually that has very little to do with a free business model).

Re:At first thought he was arguing against it

[PPH]

Right. Because you could just as easily live by free and die by proprietary. Or vice versa. Its all about how you leverage your core competencies, extract the maximum amount of profit, and then either sell out or invest your profits in the next big thing. What 'free' tools buy you is the ability to hang onto as much of your revenue as possible (free as in beer) and be able to move to better platforms as time goes by (free as in speech).

I've seen too many proprietary products priced based on how much revenue the customer has, effectively skimming profits off the top. And then the cost to switch (either to reduce expenses or improve processes) is designed to ensure lock in.

Bah!

[Lumpy]

Create a success.
Build it.
Sell out to the first buyer.
Start another new thing.
Watch as the thing you sold get's killed by free.
Repeat.

Honestly, dont get married to your creations, sell it and move to the next one while bankrolling. you'll never die by free.

Cuban: King of bad examples

[jedidiah]

The problem with pointing to Google and snickering about how they give
away their product for free is the fact that they exist in a product
area that has always been gratis to the customer. This is ironically
enough much like SPECTATOR SPORTS where the vast majority of customers
get their "content" for "free". Most of the eyeballs that see Cuban's
games are "freeloaders". It's been this way since before the Internet
or even Television.

Cuban is the perfect example of the sort of businessman that derives
most of the value of his business from the fact that most people get
to use it for free. ...ironic really.

If You Live By NOT Free

[Atreide]

This is absolutely same for non free business.

If you specialize in a niche and it disapears or someone else gets better at it
then no god will help you.
Evolution works against you and you end up in stomach of some competitor.

Look at Microsoft.
Desktop is now only a small part of business.

They went after servers only ~10 years after desktop was launched.
Now they are in office, cloud computing, search, even gaming and a lot more.

Look at Oracle. They develop not only database but also application.

Look at IBM. They went for service years ago.

Look a Dell. They are going for service for a few years now.

Look at Apple. They are selling mp3 and service around it.

This is simply wise corporate development.
That is called diversification.

Re:If You Live By NOT Free

[mjwx]

Look at Microsoft. Desktop is now only a small part of business.

Wrong, Desktop is still the core of Microsoft's Business. Everything else is built around and to cater to Microsoft's desktop operating system. Sales of XP/Vista licenses to corporations under SA/Volume/Partner agreements makes up the majority of Microsoft's sales.

Look at IBM. They went for service years ago.

I don't doubt it and it really turned out well for IBM didn't it?

Look a Dell. They are going for service for a few years now.

Dells primary source of income is still computer hardware. Software services exist to further the sales of hardware.

Look at Apple. They are selling mp3 and service around it.

Apple makes next to nothing on MP3 sales, a few US cents per song to cover all operating costs. They make their money out of the Apple brand, they are a marketing company which they've always been but only recently have they become only a marketing/IP holding company. So in that regard you have a point with Apple.

Taking advise from Cuban

[C_Kode]

I'm not sure I would take to much advise from Mark Cuban. First, he is a hard worker, but with Broadcast.com he was in the right place at the right time. Beyond that he hasn't exactly made a lot of great desciions. The major investment into HDnet hasn't been that fruitful and the major investment into Register.com was a debacle. He traded a rising star point guard for a bad apple 35 year old point guard. Today, he just spent $25M on resigning that bad apple point guard (now 36 years old) that isn't half the player he onces was.

I'll pass on advise from Mark Cuban.

Re:Taking advise from Cuban

[Anonymous Coward]

Mark Cuban was retired with ~6 millon in the bank when he was talked into doing broadcast.com and of the 3 that got that payday he was the only one smart enough to cash out and remain a billionaire. Lets see Akamai bought Red Swoosh and AOL took Weblogs off his hands for a nice profit. The Mavs were a perinatal lottery team that lost money but now under Cuban they have been a playoff team that is profitable.

Re:Taking advise from Cuban

[C_Kode]

FYI: The Mavs were on the verge of winning when Cuban bought the team and the core that was winning all those games was mostly in place already. (Dirk, Nash, & Finley) Don Nelson as coach and his son Donnie Nelson who still happens to be the Mavericks GM are the guys who built the Mavericks. Cuban is the one who traded away the much more talented (today anyway) and younger Devin Harris for a 35 year old has-been point guard and then turned around and dumped another $25M in him AFTER he turned 36!

Read more of his blog, good sir

[orthancstone]

Companies should focus on making money?! Outrageous!

I know what you quoted seems like an asinine statement, but if you knew the full context you'd understand the point.

Cuban's been ranting extra hard this year on YouTube, labeling it as an eventual giant bust because the model will eventually fail without profit. He's saying that people, being so used to FREE content, will feel outraged by the concept of being charged to distributed their mundane crap videos online. Thus someone will come along with a better model and replace it (he's right, it is the nature of the Internet, and only the green people who have only been surfing it for a few years now fail to realize this...they don't have the years of knowledge that accompanies seeing sites/concepts being formed and replaced by the next greatest thing).

He's lashing out against these "free" practices because they are extremely difficult to break out of. Once you offer the free content to the people, they demand it stay free. You say "Companies should focus on making money?! Outrageous!" and he's responding, "How will they make it if they don't base their model on that in the first place?"

Re:Read more of his blog, good sir

[BlendieOfIndie]

people, being so used to FREE content, will feel outraged by the concept of being charged to distributed their mundane crap videos online.

Charging a small fee to upload videos is the key to improving YouTube. The reason people upload so many "mundane crap videos" is because there is not a fee. People who are proud of good work would be willing to pay a buck or two to upload their video. The people that upload their friend burping would hesitate to waste money their money. I'm sure you would still have some bad videos uploaded. Maybe google could use the money from bad videos to give small rebates to people with good videos.

Re:Read more of his blog, good sir

[drizek]

I see browser-based bittorrent that lets you watch videos in real time taking over. If google won't finance our useless videos, then we'll just have to do it ourselves. I can't imagine many people would actually pay for youtube.

(certainly not when you can watch youtube videos all day for free on CNN)

Re:Read more of his blog, good sir

[elrous0]

Ironic, sense Mr. Business Genius just had all his HDnet programming cut from Time Warner cable, supposedly because he was complaining that they were putting him on a pay tier instead of the free one. Sad day too, HDNet and HDnet Movies were the only decent channels on that pay tier (well worth the $6 a month extra).

Re:Read more of his blog, good sir

[Anonymous Coward]

Freebase jumps immediately to mind. Here's their statement on this:

http://www.freebase.com/view/en/how_does_metaweb_plan_to_make_money

"Right now we're much more focused on creating Freebase than monetizing it"...

Re:Read more of his blog, good sir

[Dogtanian]

Charging a small fee to upload videos is the key to improving YouTube. The reason people upload so many "mundane crap videos" is because there is not a fee. People who are proud of good work would be willing to pay a buck or two to upload their video. The people that upload their friend burping would hesitate to waste money their money.

Careful with that. The people uploading videos are the ones providing YouTube with lots of free content. Yes, much- probably most- of it is crap, but from a financial point of view, that isn't a problem in itself because the cost of *storing* it is likely fairly insignificant on a per-video basis.

And storage isn't the financial problem with sites like YouTube- bandwidth is. So unless those crap videos are getting lots of viewers- and I suspect they aren't- they're a very minor issue, if not a complete irrelevance.

You could, of course, charge people for the bandwidth their video being viewed "cost" YouTube. Which would penalise the producers of popular (and likely good) content, and discourage people from uploading. Not a good idea.

The key to improving YouTube is more likely improving the rating/searching facilities so that the obvious crap falls under and stays under the radar.

Re:Read more of his blog, good sir

[Latinhypercube]

If Youtube costs anything to run, that's their problem. The fact that wikipedia is run by 6 core people and the rest is moderated by users, leads me to believe that youtube's running cost are bloat. Hosting video is as simple as hosting jpeg's these days. Youtube should be free because it just isn't that good. However if BBC wants to start charging I would consider it.

Re:Read more of his blog, good sir

[dbcad7]

YouTube is not totally free.. Just as commercial TV is not free. There are ads off to the side. When you compare it to Hulu and their ads, then you start to imagine potential revenue.. The difference is that most Hulu content is professionally done TV and movies, that people are willing to watch with commercials inserted. There will probably come a day when the price of watching a YouTube video will watching a commercial prior to the video.

Re:Read more of his blog, good sir

[Anonymous Coward]

Or, alternatively, he may well be saying "Don't assume your company can be in business giving away product/service which, due to the awesome technological powers of the intarwebz, is expected to be for free. In other words, build your business on the concept where you sell some shit that's actually worth something."

Re:Read more of his blog, good sir

[nausea_malvarma]

The reason people upload so many "mundane crap videos" is because there is not a fee.

You underestimate what steps an attention whore will take to get their mundane crap viewed by millions.

Re:Read more of his blog, good sir

[farble1670]

Careful with that. The people uploading videos are the ones providing YouTube with lots of free content.

actually, youtube's draw is not the crap videos, it's professionally produced material whose posting lies somewhere between fair use and stealing.

have whatever opinion you want about freedom, piracy, fair use, etc ... that doesn't change the fact that google is making money by re-distributing other people's content, most of the time without their permission.

Re:Read more of his blog, good sir

[lifemagnetic]

Couldn't agree more to what you said. I think that observing the internet and how it has changed over the past 13+ years is an experience you can not underestimate if you are basically "green" and coming in on it as part of the youtube/facebook generation. Not that there is anything wrong with that, it's just a matter of how old you are basically! That being said, I am sure if someone reads this post in 10 years they will probably laugh, facebook? youtube? sheesh.... The internet is really in it's infancy, scary to see how much it's even changed in the past few years...now i am rambling...peace out.

Re:Read more of his blog, good sir

[bronney]

"Improving" youtube. What the heck is with improving something always? And are you sure those are improvements once in place? Before you know it, youtube becomes the next BBC or Fox and with all the mundane crap invisible and the general accepted crap on top. You see the pattern here?
.
Youtube wins BECAUSE of the crap videos. No matter how crap they are, there are people who like to watch crap videos because without Youtube, where else are you going to post those crap videos to, and get watched, forwarded, embedded, deleted. Crap videos (the real crap ones) also promotes people to make better than crap videos. Search up some Arnold impressions and you can see from the really crap to winner crap. Which of course is still crap to you sir, but it made millions of people lol.
.
Discuss :)

Re:Read more of his blog, good sir

[indi0144]

actually Google is losing money on YouTube. They will find a way of make cash of it for sure but is not the case now.

It would be sad for us up loaders of educative content to get billed for uploading video tutorials. Bill celebrities and corporations for using YouTube not the small guy who uses YT as a way to share knowledge.

Re:Read more of his blog, good sir

[Kashgarinn]

Youtube is interesting..

Anyone can upload a video onto it, and anyone can see it.

Google is thinking "we'll make money off of this by means of Contextual ads" - which is okay, but not really working.

Professional content producers are thinking "We'll make money off of this by means of charging viewers" - which doesn't work because youtube doesn't charge for content.

People who want to advertise stuff are thinking "if only our ad would appear on that youtube video.. it's gotten 1 million viewers already!"

- I'm thinking Google should change youtube advertising into deal-based between the uploader of the content and the people interested in advertising next to a video.

- content producers themselves could even do this today.. upload a video with an ad already in it, they just would have to do all the legwork themselves about getting the sponsorship. Then when the deal is over, either upload it again with a new ad or without a ad.

But this would only really happen if Google is interested in being a middle-man between content producers and advertisers, and interested in doing it so that both are happy, and that the youtube viewer is happy, don't forget that snotty-nosed little brat who wants everything for free.

I'm thinking somekind of a relationsship between content producers and advertisers with Google enabling both to get what they want would be the only real way forward, if the goal is to increase what's available legally on youtube.

- That is if the goal is to get professional content onto youtube legally.. It'll always have the Long tail of interesting crap without ads in there, but adding professional content will definitely sweeten the deal for everyone.

- Who should be eligible for an ad package? Any video which some advertiser is interested in sponsoring.

My thoughts, worth $2k if someone is interested in buying :P

never heard of hudsons bay company eh?

[circletimessquare]

you hoser

http://en.wikipedia.org/wiki/Hudson's_Bay_Company

Re:never heard of hudsons bay company eh?

[AKAImBatman]

Hudson is still a fur trading company, right?

You fail it.

Re:never heard of hudsons bay company eh?

[vlm]

Hudson is still a fur trading company, right?

You fail it.

So, if walmart buys a new cash register, or opens a jewelry counter, is walmart a "totally new company", or is it just another day in the distributor/retailer business?

In the olden days, they bought stuff there, transported it, and sold it for a profit here. Exactly the same line of business, only the technology and tools have changed a little.

The wiki article goes into detail about some of their more obscure modern sidelines like thrifty car rental, but also touches on obscure ancient sidelines, like printing their own paper money. A minor sideline simply does not matter compared to their business plan of buy it cheap in location A and sell it for big bucks in location B.

http://en.wikipedia.org/wiki/Hudson's_Bay_Company

This also applies to the folks whom think IBM is totally different because they used to make widget A and now they make widget Z. No, IBM was in, and remains in, the office automation business.

Re:never heard of hudsons bay company eh?

[BigBlueOx]

Never heard of Beretta, eh?

Got an order for arquebusquequebus... gun barrels in 1526! Still going strong.

http://www.fundinguniverse.com/company-histories/Fabbrica-D-Armi-Pietro-Beretta-SpA-Company-History.html

Re:never heard of hudsons bay company eh?

[Anonymous Coward]

He not only fails it, he tucker max fails it. How's the fucking movie going?

Re:never heard of hudsons bay company eh?

[AKAImBatman]

And I quote (with emphasis added):

No matter how much of a cash cow your current product line is, you need to be investing in the R&D to compete in the next generation of products.

I never said the basic business had to change, only that a company's offerings had to change to remain competitive. IBM may still be in the office automation business, but they sure as hell aren't relying on punch cards and typewriters to pay the bills. Similarly, Hudson may be in a more modern form of their core retail business, but they're definitely not setting up forts and trading posts to acquire, process, and resell fur pelts.

Mark how is that toilet business going?

[strangeattraction]

This with the clever investment in toilets http://www.i4u.com/article4746.html. Something the Japanese have been doing for years. Hey Mark any good recommendation for bidet derivative investments?

free markets

[falconwolf]

ixed that for you. No business survives beyond their normal lifetime in the market.

Well. that's clearly not the case.

Goldman Sachs, Bank of America, JP Morgan etc etc etc. If you have a friend in the government, you can get them to tax the people to guarantee your profits.

In a free market none of these companies would have been bailed out. Instead they would have been forced to declare bankruptcy, then those competitors that did not make bad decisions would have continued to live.

Falcon

Re:free markets

[Anonymous Coward]

So less control will result in less corruption, conspiracy and insider-trading? Sneaky.

Seriously, why do proponents of certain political systems assume that those systems will somehow change people? As if a completely free market could somehow eliminate collusive behavior. This is why you're called idealists, people.

Re:free markets

[oatworm]

You actually hit the nail on the head - we don't believe that certain political systems will somehow change people. Instead, we assume that the people in government are just as prone to collusion and bribery as your average capitalist. The difference between most capitalists and the government, however, is that people can choose whether to do business with a capitalist or not.

Re:free markets

[TheLink]

> In a free market none of these companies would have been bailed out. Instead they would have been forced to declare bankruptcy

But which country has this mythical free market? The one that has a thriving market in flying unicorns? Or is it the one where legislators and regulators can be bought and sold? ;)

Reminds me a bit of those "True Believer arguments". e.g. "A True Believer would never do X" where X is something bad. Looking through that "lens" you'll find that the real world has rather few "True Believers", and you don't really learn much about what the True Believers actually believe in.

Anyway, to me what is important is not whether a market is free or non-free, but whether the market is well-regulated or not. And we should focus on how to have a well-regulated market, not on how free it is. Quality not quantity[1].

There have been arguments that the regulators should be people from the industry, since they know the industry well etc, and that's why it's ok and inevitable to have the "ex-CEO of Company X" end up regulating "Company X" and stuff like that. Somehow I'm still not convinced by those arguments (especially given the observed results ;) ).

[1] Similarly there's always this popular debate about big vs small government, I find that rather stupid since what seems far more important is the quality of the government, not the quantity of it. But in a democracy I guess that's ultimately determined by the general quality of the voters.

Re:free markets

[kklein]

How could you say such a thing??? Regulation is what caused most of Europe to be enslaved while a few noble families lived lives of absolute luxury, hiring goons to torture, rape, and kill the masses into compliance with a life of abject poverty followed by a very early death!

Oh wait... My bad. That was a total lack of regulation.

And we call it the Dark Ages.

"Libertarian" is just a euphemism for "feudalist."

Re:free markets

[Anonymous Coward]

I can also say: the difference between a monopolistic company and a democratic government is that the people can choose whether to vote in a government or not.

So the same people who would keep voting for bad governments will somehow vote correctly with their wallets against abusive monopolies?

While expecting people to use their brains once every election is a bit of a stretch, it's less of a stretch than expecting people to use their brains daily when voting with their wallets.

Capitalism's Invisible Hand is not going to reach out and save the people from themselves.

Some have a life cycle, some don't.

[Animats]

"Like every company in the free space, your lifecycle has come to its conclusion. Don't fight it. Admit it. Profit from it."

As I point out occasionally, that's definitely true of social networks, which have a short life cycle of coolness, like nightclubs. It's less true of useful services, like PayPal or eTrade. (eTrade got into trouble because they got into home equity loans as a side business. One of the headaches of running a financial business is keeping the guys who want to do "big deals" with company assets under control.)

eBay is an especially good example, because 1) it has a real revenue model, and 2) there's a strong network effect in having one big auction market rather than many little ones. It's going to be tough for someone to knock off eBay. Many have tried and failed.

Google isn't free

[sesshomaru]

Look, how hard is this, Google isn't selling search services, Email, document publishing software, or the like.

Google is selling eyeballs, just like broadcast tv, broadcast radio, etc. They aren't selling anything to their users, they are harvesting their users and selling them to advertisers. They are able to sell stuff that's pretty well targetted through their search and Email.

The tradeoff of charging for their stuff would be that they would become a lot less valuable to advertisers, and people who are paying to use them would resent the fact that they are "paying for advertising."

So Google's service isn't free, it's just the Mark Cuban isn't their customer. Unless he's buying ad-space with them, in which case he's just not very bright.

Insider trader

[bbhack]

Mark Cuban should be in court heading to or in prison.

Martha is pissed.

THE HORROR!

[greg_barton]

Someone out there with a better idea will raise a bunch of money...

My god, that would be a MERITOCRACY!

THE HORROR! KILL IT WITH FIRE

is craigslist an alternative?

[Lexible]

Craigslist is mostly free, yet i wonder if they are threatened by the kind of live by/die by scenario proposed by Cuban? Or will they simply die, when someone comes along and offers a free real estate database competitive with their own, and thereby knock out their revenue?

Mod this up!

[SCPaPaJoe]

Those were excellent episodes which are worth a listen.

Re:Mod this up!

[gEvil (beta)]

Fully agreed! Those TAL shows are probably the most succinct explanation of what's going on with the economy that you can find.

Mark Cuban...

[Anonymous Coward]

...is an idiot.

Re:Mark Cuban...

[Herschel Cohen]

Impressive an AC calling a billionaire an idiot. Now say that with a straight face if he beats the inside trading charge (if it even can be made). At very least you will have to agree he is smart enough to hire top notch legal talent should a court case seem possible. Or you will, at minimum, assert he knows whose palms to grease to avoid some potentially damaging PR and to avoid possible financial loss from a levied fine. Even the "W" was not an idiot, intellectually disinterested, yes - idiot no.

Um...

[ucblockhead]

If you look beyond the "technology industry", it is easy to find companies that have operated for decades giving free content to customers.

Google's model of giving people free content and making money on advertising is nearly a century old. Look at network TV. Look at radio. Look at free newspapers. These have been around forever.

Good luck with that!

[denzacar]

Maybe google could use the money from bad videos to give small rebates to people with good videos.

Wait... You are suggesting monetary moderation based on taste and tastefulness? On D interwebz?
You are one of those "green people" parent poster speaks of, aren't you?
This site should prove insightful for your further understanding of the nature of the internet.

Re:Good luck with that!

[ShieldW0lf]

1) Be generous
2) Create trust
3) Scale out
4) Betray trust
5) Profit

It's called "Selling out". Also known under such words as "Betrayal" and "Traitor".

Yes, this is a good way to make money.

It's such a good way to make money, it really ought to make us re-evaluate this whole "money" concept as an organizational structure. Betrayal should not systematically lead to power. It should lead to death at the hands of your peers, or if you're a sympathetic sort, it should lead to disenfranchisement and a permanent spot at the bottom of societies totem pole.

How about "If you live off the backs of slaves, you will die by the hands of slaves"?

Yeah, that one holds a lot of appeal.

Re:Good luck with that!

[Atrox666]

It worked for Napster...oh wait I guess not.
When Cuban starts running a successful business based on free I'll listen to his opinion on how to run businesses based on free.

Re:Good luck with that!

[dkleinsc]

Betrayal should not systematically lead to power.

Good luck creating a political or economic system that doesn't reward betrayal. We've spent all of recorded history trying to figure out how to prevent that, but the problem is that any system that gets set up to prevent betrayal will necessarily get betrayed by the same jerks who was focused on betraying in order to gain power in the first place.

Re:Good luck with that!

[Undead NDR]

1) Be generous
2) Create trust
3) Scale out
4) Betray trust
5) Profit

It's called "Selling out". Also known under such words as "Betrayal" and "Traitor".
Yes, this is a good way to make money.

I don't think so. It's exactly when you betray trust that people will flock to a still-free competitor.

Guys, you are missing the point.

[denzacar]

It is not about making money.

It is about making money with as little investment into anything else BUT making money.
Screw diversification, screw research, screw tax-shelters, screw quality improvement, screw employees...

Say you develop a free online service for free storage of pumpkin photos - and it becomes a hit.
He is advising against broadening your business into free grape photo business. Or even improving much on your pumpkin photo business model other than scaling it up.
And when another player in the pumpkin photo market comes along, and he also hosts free photos of grapes, corn and potatoes, - don't waste energy or money fighting him.
Just concentrate on making money for as long as you can.
Don't be the best. Heck, don't even try to hard to be adequate. Just make sure that you are making money until a significantly better competitor comes along.

And when he offers to buy you out - accept it and move one.
Let him fight the guy who will come along doing the same thing, only he will have cute kittens holding the above mentioned vegetable in the photos.

Obsolete yourself before your competitor does

[SpinyNorman]

This has got nothing to do with basing a company off free software, nor is it even limited to technology companies.

No company will stay in business forever - eventually they all seem to get made obsolete by some newer company that did a better job of predicting where the market was heading than they did.

It's possible that technology companies (in the broadest sense of technology) may be more liable to be made obsolete by "black swans" that seemingly come out of nowhere, due to the fast moving and semi-unpredictable nature of technology advances and fads, but again this is nothing to do with basing your business of free software.

Any company that fails to continually innovate and look over their shoulder, and instead just kicks back and milks the cash cow, is going to be made obsolete by a competitor with a better product, paradigm, or change in the market.

The best chance of surviving is business is if you can continually manage to make your existing products obsolete, before your competitors do.

The major danger to Google is that they are basically (at least in terms of generating revenue) a one-product company: web search based advertizing. It's not entirely obvious what their strategy is with GMail, Google Maps, etc, but I suspect that a major part of it is to help prop up their core business - to build the Google brand and customer (or rather fodder - the customers are the advertizers) retention.

Google should be worried though (and I'll bet they are) since there is so much room left to improve web search, and someone like Microsoft with the (certainly not free!) infrastructure in place to roll it out could render Google search obsolete overnight with the right software update. It's also possible that a lot of the adveritising market might switch to handhelds (presumably why Google is developing Android), or maybe to social networking sites like Facebook and Twitter where the kids nowadays all hang out.

Re:Obsolete yourself before your competitor does

[mrmaster]

Google owns TONS of fiber, there own data centers, created android, and investing in green tech. Sure there bread and butter is search, but they have plenty of irons in the fire.

Re:Obsolete yourself before your competitor does

[SpinyNorman]

Yeah, but none of these are making any money.

The data centers and fiber are only there as infrastructure for the web apps (Google, GMail, YouTube).

YouTube is losing money like crazy. GMail on the web makes none (although they could add advertising).

Android is free and open source, not a money maker. I'd guess the strategy is to keep the smart phone field open rather that let Microsoft, Nokia or anyone else control it, maybe as well as to encourage online usage for the same reason Intel spends money encouraging CPU usage.

same thing can be said about prop. software

[bl8n8r]

So let's say Ty Coon Devices releases a device that runs millions of applications and has a worldwide customer base in the bizillions. The consumer electronics market wants in on the pie, so a slough of 3rd-party hardware devices are sold which integrate with Ty Coon Mobile. Infrastructures and economies are built upon the Ty Coon platform. Everyone is ecstatic and really doesn't care that the platform is locked tight and Ty Coon decides what can run on it's device and what it can integrate with. Some years later, Ty Coon decides it want's to "upgrade" it's platform. You don't get a choice whether your extension or derived work is sanctioned to work with the new upgrade. You just cross your fingers. Nevermind that Some Other Big Company decides to offer Ty Coon a buttload of cash to make the device "less friendly" with some of the competing software/hardware devices on the market. You still can only just cross your fingers. There is nothing guaranteed with proprietary platforms either. You're in the same friggin boat. It's just a different color. At least if you have a Free/open platform, you have a chance at making things compatible.

No..

[denzacar]

But you may come back as an non-free undead in the service of a hired necromancer.

Simple...

[denzacar]

Free as in TV commercials vs. free as in TV shows.

nothing to see here

[JackSpratts]

ah cuban. i wish he'd stick to anything but opining. he's been on this rant for years and it's old. taking google for example for those addled about what exactly it is they're up to, consider them the next step in a progression that started in the early 20th century with radio broadcasters. much of the baffling junk google spends its shareholder's money on, like streetview ad-infinitum is programming. if you look at television networks and their obsession with reality tv, google has brilliantly evolved it to the nth degree: no wrangling drama queens for them. all they do is hire camera guys to drive around neighborhoods snapping pics and lo and behold millions tune in and see the commercials.

that's the model. it's venerable and it works.

google is no more or no less vulnerable than any other program distributor working such models, like cbs for instance, still in business after 80 years.

naturally they can founder - like cuban's hd network - or last for generations like nbc but that's execution. the model is sound.

- js.

You've missed the last 6 years of capitalism

[Anonymous Coward]

DRM (Sony PS2) and enforcement of grey import bans (Levi). Protectionism (Antigua). Market closure (Region Coding) and paying court time to kill or maim another (SCO). These are just a few of the methods taken to close out competitors and keep alive despite being the End Of The Line.

More especially now, patents and trademarks (and copyrights now that the DMCA is kicking in) but especially patents are used to close out competitors.

See, for example, RIM and Nokia.

Kill the competition. Close them out. And you never have to answer to competition.

Who's isn't?

[Anonymous Coward]

Most times you fail to get your dream job. Most of the very few who GET the dream job get it from serendipity.

If Elvis had turned up 5 years earlier, he wouldn't have made it. Turned up 5 years later, too late.

Re:Who's isn't?

[OrangeTide]

Being a billionaire isn't a "dream job". Being consistently successful is much different than getting one lucky break. (it's as if you didn't read past the first sentence of my post)

Mod parent (and this) down, please

[Anonymous Coward]

The moderation system is intended to point people to good posts, separate them from the cruft. Parent is a) producing even more cruft, b) redundant, and c) off-topic. Pretty much the same as this post.

Another way to make money is to...

[dgun]

...do some insider trading. For example, if you create a goofy Google wannabe search engine, and you know it's going down in flames, dump all your stock before your stock holders know about it. Another way to make money, apparently, is to make an ass of yourself as often as possible at NBA games. Lastly, ignoring the fact that you have no real talent or insight, use the force of your borderline sociopath personality to bulldog your way to the top, screwing over as many people in the process as possible.

Honestly...

[hurting now]

Mark Cuban is an ass.

He is a DRM proponent, and can't stand the idea of true innovation whether its a "free" model or not.

Sure, if you live by "free" you will die by "free"... but won't you die happy knowing that you were "free"?

Yes it must, sorry...

[denzacar]

Betrayal should not systematically lead to power.

Betrayal is actually just moral judgment of the action - which if unfavorable to the object of the action, said object considers unfair.
What it is really is simply possession of more information than you are willing to share, possibly favorable to you or someone else, with possibility of action or lack thereof attached.

No malice is needed. You simply know more at the time and you fail to share the info.
You fail to mention to your friend that the milk in your fridge is 5 weeks old before he drinks from the container. Instant betrayal.
You didn't want to do it, you were not even in the room. Your unconscious inaction alone led to your betrayal of your friend.
Not a very serious case, but quite true.

Information is power. Betrayal is just a matter of moral judgment on the use of it.

 
Americans have betrayed their legal ruler and then fought a war when they were faced with their actions.
So did Russians. And French. And many others...
Heck, one of the great stepping stones of democracy and human rights was when Brits betrayed their king and at the tip of the blade forced him to sign a legal document giving them previously absent freedoms.

See? Good betrayal. Favorable to the masses. Leading to power.
Still betrayal though.

Re:Insider trader ... but, but - he says he NOT!

[Herschel Cohen]

You see he got a tip, but he is not one of the founding members of the company, so he cashed out his 6 to 8 % and made a few hundred thousand. That's peanuts to a Billionaire, so don't mix him up with the petty cash Martha supposedly gained. See the difference? If so do I have a business deal for you.

Keep investing in the stock market, your well heeled friends need funds when it tanks. Remember they have a life style to protect. They are not peons, like you or even Martha.

Is That Not How Microsoft Office took Over ?

[kjhambrick]

All --

I remember the early-to-mid-90s when Microsoft gave away their inferior Office
Product with every PeeCee.

It only took a couple years for Microsoft Office to virtually destroy WordPerfect,
Lotus and AMIPro.

IMO, OpenOffice is a much better product today than when Microsoft leveraged their
OS Monopoly to corner the Integrated Office Application Market.

The difference now is that the PeeCee Manufacturers are rightly terrified of MS
so that they apparently refuse to bundle OpenOffice with each PeeCee and perhaps
because OpenOffice lacks an integrated Email App (maybe).

I wish Mark Cuban was right but I am afraid Microsoft's Monopoly is too powerful
to kill with a free product that's 'good enough'.

Too bad ...

-- kjh

lemming pheromones

[epine]

Here's a man who bought a basketball team to indulge his anger management issues. Part of a Nowiztki quote in Wikipedia:

The game starts, and he's already yelling at [the referees]. So he needs to know how to control himself a little.

Maybe he gets himself warmed up driving to the arena in the latest Veyron coup. Just what a man with a short fuse needs to pump his fast twitch into adrenaline shock.

Out of the red tinged mental miasma of throbbing carotids, a word condenses: blackswan. (No particularly close relationship to black death.) "Hey, I can really push a lot of buttons swinging around this scabid corpse." With the economy in its current condition, we're all pretty hopped up on lemming pheromones and ready to jump. We're primed for the primal message.

This is a man who was energized by Ayn Rand. I was never able to read this chick, although I have read some excruciatingly long retrospectives about her via AL Daily. Whatever her virtues (views on this are extremely polar), she wielded a world-class stupid-dozer. Not the kind that pushes stupid out of the way, but the kind that backfills with dirt something she otherwise couldn't deal with. IIRC (more than twenty years later) in the early going of "For the New Intellectual", she tosses the work of Heisenberg and Gödel into the brink as the "philosophy of depression". Having thus dispatched with the facts, she then proceeds to unfold the truth. I didn't continue reading.

There's a funny moment in this TED video where Hawkins lampoons the old "maybe the brain can't understand the brain" mysticism. (And IMO, he's largely right about the role of the cortex in memory and prediction.)
Jeff Hawkins on how brain science will change computing

Gödel was one of the first to demonstrate that for math this voodoo sentiment is in fact true, if your math is sufficiently powerful (i.e. with blades sharper than a Fischer Price lawn mower). Gödel's theorem is what makes mathematics a limitless frontier of new discovery.

Likewise, Heisenberg's uncertainty principle is intimately linked with almost every accomplishment of the high tech industry over the last 50 years. The statistical properties of bosons and fermions are not an obstacle to technology, but in fact enable the greatest feats of human creativity and magic we've managed to pull off. Rand, perched high atop her stupid dozer, didn't have time for subtlety, hence her great appeal to business minds. She implicitly believed that a simpleton universe would provide greater outlets for human creativity and triumph. What a ninny. But this was long before the clue stick was widely distributed, and a lot of people fell for it on an emotional level.

I think Rand deserves an honorary doctorate in media studies. She would be best regarded as a Marshall McLuhan figure, minus the self-insight part. If you needed to know what Fox news was going to be like in the 21st century, the author you needed to study fifty years ago was Ayn Rand.

Enter Mark Cuban with his media empire based on sports, entertainment, and ego, pumped around the globe over satellites and optical fibre made possible by the philosopher's of depression, now jamming open the elevator door with his elbow firmly planted on the fear button, prominently labelled black swan.

Did someone once remark that ego is the thin layer that demarcates fear from greed? Someone should have. The most powerful egos are found in the people where fear and greed press hardest together. I once sat in a room where a petty venture capitalist (with anger management issues) wrote onto our white board (in foot tall letters) two words: fear and greed; he then left this great wisdom behind for our continued edification. The implication, of course, was that if our inner emotional world had room for anything else, we would be regarded as insufficiently focused, and that wealth,

What really happened

[nausea_malvarma]

Mark Cuban heard that Chris Anderson and Malcom Gladwell were arguing about businesses giving things away for free, and felt jealous because nobody was paying attention to him, so he decided to complain.

Just what is he bitching about, anyway?

[Anarchduke]

Okay, I am a little confused. So, Mark Cuban, who made his money by selling an overpriced albatross of a business to yahoo is weighing in on the value of giving free services to the public. And Mark Cuban's former business was broadcast.com. A business which, as I recall, focused on delivering FREE content using advertising as a method of monetizing the company's FREE (to the public) service.

Its not that they can't make money offering free. They can, have and will. The problem is that they know that its literally impossible to be the king of the mountain forever. But that won't stop them from trying. And that is exactly what will kill them.

As an internet forum commentator, I am an expert on talking out my ass on subjects I know little or nothing about, and I am sure many of my fellow slashdotters can relate. Thus, I can recognize that Mark Cuban seems to be talking out of his ass. The above quote seems to say that succeeding in a business but failing to innovate will cause you to lose your preeminent position in an industry. But then he blames it on the fact that the business model includes delivering free content instead of the competitor that improved on the service being provided.

Does Cuban suck RIAA cock every morning in order to wake up rather than drink coffee? If your basketball team loses to another franchise (and Cuban should understand this one), then this means that the other team played better. It isn't the fault of the fans who watched the game. Cuban is blaming the consumer for a company getting its ass kicked by another company. It obviously doesn't matter whether the service you are delivering is free or not. What Cuban is mouthing off about actually seems to be the idea of a competitor taking your position. Much the same way that Infoseek or Altavista are no longer credible search engines whereas Google is now part of the vocabulary of kindergartners.

In my mind, there is a self serving value in giving away free content to your consumers that Cuban has overlooked. It means your competitors can't use lower prices to drive you out of the market. Instead, it forces that "Black Swan" company to improve on the services you are offering. In fact, whether or not the service you are providing is free doesn't matter a fucking bit.

Microsoft charges an outrageous amount of money for its operating system. Linux is free. And Microsoft has a 90% market share. Is Windows a better operating system? Yet, Microsoft is still dominating the market because they fight like hell to stay on top. What would Cuban advise Microsoft on this issue?

when you see your BlackSwan company appear and you know they will kick your ass, rather than ramping up to try to compete, get out. Sell.

Perhaps this fight to win, never quit attitude is why the Dallas Mavericks keep winning championships. Oh right, nevermind.

Re: If You Live By Free, You Will Die By Free

[initialE]

This has got to be undoubtedly the worst James Bond movie title I've ever heard...

free is Liberty not 'no cost'

[Anonymous Coward]

I think that this kind of argument
misses the whole point.
Free isn't doesn't cost anything
Free is Liberty.

Liberty costs a lot. It is not a given.

So, it's not about profit it is about freedom.

horse too

[Anonymous Coward]

fuck him and the horse he rode in on

You know you're reading Slashdot too much when...

[YourExperiment]

...you immediately assume the article title means "free as in freedom", and it takes you some time to realise it actually means "free as in lunch".

The problem

[stanjam]

The problem is that this is not limited to "free." In the computer age it applies to free as well as non-free. When you release any product, it will eventually be replaced by something better and made obsolete. Not only that, but it will likely happen relatively quickly. Computers become faster and better very quickly, allowing competitors to produce better products that take advantage of this. Doesn't matter if it is a free product, or one that is based on profit. If you don't keep on top of the curve (something very hard to do) then someone will produce something better than yours. The only companies that have beat this trend are companies like Microsoft, which use a large variety of tactics (not all of which are exactly ethical) to stay on top, even though they may no longer have the best product available.

Google is free?

[J.R. Random]

Last I checked Google charges for its advertisements.

Quality not quantity

[falconwolf]

to me what is important is not whether a market is free or non-free, but whether the market is well-regulated or not. And we should focus on how to have a well-regulated market, not on how free it is.[1]

And regulations may make things worse not better. The US government wanted banks to make loans to those who could not afford them guarantying some of the mortgages.

There have been arguments that the regulators should be people from the industry

If you're not going to have someone who has worked in a given industry then who are you going to regulate it? How can anyone who does not know it regulate it? At the same tyme if it's someone from the industry then as you say they could be all chummy with businesses in the industry. One solution is a committee, which will then seek to extend it's own power.

[1] Similarly there's always this popular debate about big vs small government, I find that rather stupid since what seems far more important is the quality of the government, not the quantity of it.

How is it possible to guaranty quality when quantity is large? With businesses efficiency is a concern, but as another slashdotter's sig says when efficiency is a big concern of government it can lead to fascism.