I downloaded Firefox 3 yesterday . I and am very happy with the improvements Mozilla has made to the browser (more than 15000 to be precise). Over 8 million downloads has been made in 24 hours. Let's see whether it becomes a world record.
Yesterday, I downloaded the add-on Feedly and it provides a wonderful browsing experience to read all my RSS feeds in one window like a magazine. You should have a iGoogle account. to use Feedly since it gets data from your igoogle settings.
I wondered how free software like Firefox, Digg, Snurl make money or fund their projects ?
I searched on google and found answers:
Mozilla Corporation makes all that money because of the Google Search box on the top right. If you search with that box (which I do all day long) and you click on the Google ads on the results page Firefox gets ~80% of that. They also have Amazon in the search box, and other services that I'm sure kick them back some affiliate fees. Brilliant.
It's speculative math, to be sure, but let's take a whack at it. The CPM (cost per thousand displays) rates for Digg's new design are $16 for 728x90 leaderboards, $14 for 120x600 skyscraper positions, and $9 for 125x125 blocks. The 125x125 slots often seem to be filled by Google AdSense ads, which will probably monetize at a slightly lower rate than $9 per thousand displays - but not much lower, given Digg's tech-related topics. So let's say $6 CPM for the 125x125 spots. Simple maths is $ 800k a month.
Google has been the main driver to the development of the open source software. You may also see that most of the websites running google adsense.
You will also notice that free software vendors have their own stores ... mainly selling T-shirts, caps or cups with logo printed on it. The cost of the T-shirt with $ 15 which is equivalent to one year subscription of any anti-virus software. So you buy it, you are funding the software !!! Visit some of the stores.
The revenue model for the business has changed. No direct selling of software. More the number of users for the product, more the advertisers and sponsors.
Imagine if put this as a case study to Accountants whether this model is ethical or not, the arguments would swing both ways !!!
I feel that any business to be successful has to have a good revenue model. A good stream of funding will make the entrepreneur direct his time and energies for the business to be successful.
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Next Blog post "Business, Customer Value, Cost and Management Accounting" by CMA Devarajan Swaminathan.