Anil Dash has an interesting post called The Interesting Economy about how Flickr (Yahoo! now) puts ads around pictures uploaded by users who haven’t paid for a Pro account. Is it right for a company to make money off a user who isn’t getting a taste of the revenue? Of course Flickr needs some revenue to provide such a service and Pro accounts probably don’t over it completely. Why not use Google ads so non-paying customers can still have a place to upload their images?
Caterina Fake, a founder of Flickr, responds that it isn’t all about money:
in any social software system there are systems of value other than, or in addition to, money, that are very important to people: connecting with other people, creating an online identity, expressing oneself — and not least, garnering other people’s attention…But monetization strategy or no, the culture of generosity is the very backbone of the internet.
She has a point: while the Internet started out for research purposes, its growth can be attributed to users wanting to share a part of their lives with others.
Isn’t this the basic argument around open source software? Why do people develop software if they aren’t getting paid for it? Yochai Benkler called it Coase’s Penguin:
No one “owns” the software in the traditional sense of being able to command how it is used or developed, or to control its disposition. The result is the emergence of a vibrant, innovative and productive collaboration…Its central characteristic is that groups of individuals successfully collaborate on large-scale projects following a diverse cluster of motivational drives and social signals
While companies like Red Hat employ some linux developers, they are essentially making money off a free product. Is Flickr and Yahoo! doing anything different than Red Hat?