How Are Free Internet Service Companies Paying their Bills?

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Most internet companies do not charge users for their services. It is true for most social media websites, free software, and blogging websites. You can just log in and use the service, but the companies still make money. It can be mind-boggling to think how they’re doing it if their product is free. If you have the same question, you should remember the famous phrase, “if it’s free, you’re the product.”

So, most of these companies have other means to make money. And it depends on the number of users they have on their website. This can also include suggestive selling to existing customers. It can be similar to when you call the Cox customer services number and the agent suggests an additional product that you can buy. Moreover, there has been a consistent increase in the number of internet businesses over the years.

So, let’s take a look at how these organizations generate revenue.

1: Advertisements

Probably the number one way for such companies to make money is through running ads on their websites. The biggest edge these companies have is the number of users on their websites. So, the traffic that they have can be the audience advertisers want to target. As a result, these companies offer their online space to marketers from around the world.

The most successful business model that makes money by running ads could be Facebook. You can make a free online profile and consume unlimited quantities of content. You can also connect with your friends and family over the website. But the whole time you’re on it, Facebook will bombard you with ads.

So, Facebook has one of the most engaged audiences online. So, marketers use the platform to run ads. Moreover, another edge is that Facebook allows pinpointing targeting to advertisers. They can pay more money if they know they can target the right audience.

2: Sponsorships

Many web-based services run on sponsorships from governments and other organizations. So, the company might have a product or service that another setup can benefit from. They can talk to the organization and set up a sponsorship model. It can be a win-win situation for all parties. And the user can still benefit from the free product or service. Although, such website models might need a lot of research and could only be viable for a niche.

3: Data Collection

Data is one of the biggest commodities in the world right now. Big data companies are having a field day by collecting and sorting data for governments and marketing companies. So, where are these companies getting tons of data? The answer is probably staring you right in your face. Many websites can ask you to sign up with an email ID to use a free service. Moreover, you might even accept cookies from most websites that you visit.

So, these companies are collecting all that data in exchange for their service. Then, they can consolidate it and sell it to the highest bidder. You might not even know what you have consented for when you visit websites. So, many companies can use your data to make profits. If you don’t want that to happen, make sure you read the fine prints before accepting any terms online.

4: Free Trials

Most software companies can offer free trials for their products. The trials can last from a week to a month. So, the user will have to pay for the service after the free trial expires. This can be a great way for companies to roll out their product. It might be one of the most successful marketing gimmicks. If you like the free product and get used to it, you are more likely to purchase it later. So, the initial free service can lure more revenue for the companies.

5: Pay for Data Exports

Many companies can allow you to create a free spreadsheet or design online. You can use most software online for free and store it on the website server. But if you want to export your data, you will have to pay for it. The service fee can be enough to make up for the free software as well. So, as long as you stay on their website (and look at the ads), the service is free of cost. As a result, they either make money from ads on their website or through export and download sales.

6: Paid Peripheral Services

Many companies have one major product and that can be free. For example, you can use Gmail free of cost or make unlimited Google searches. But Google also has paid peripheral services related to their product. For instance, you can use Google Drive for free, but it has a 15 GB data storage limit. So, if you want more cloud storage you will have to take up a paid package. As a result, people can pay them for premium content, ad-free service, or even a paid subscription.

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