Full Disclosure

SAN FRANCISCO (03/03/2000) - In the early 1980s, PC World's founding editor, the late Andrew Fluegelman, developed PC-Talk. It wasn't just the best computer communications package of its day; it was also the first important freeware, distributed via user groups and online bulletin boards. Next came shareware, which worked on the honor system. Developers offered a free tryout but expected a small payment if you used it.

At the time, these movements appeared so powerful that I predicted a disk of software should eventually cost no more than a phonograph record--about $5 back then. I even declared, half-jokingly, that software might one day be subsidized by advertising.

Lucky call. Not only has software moved down the price curve toward zero in the ensuing years, but so have hardware and services--in what has to be the greatest giveaway in history. What a wonderful world for cheapskates!

Even Microsoft Corp. has followed this trend, since Bill Gates would rather give stuff away than have it sold by competitors. So Windows now comes bundled--excuse me, integrated--with all sorts of software that once cost money--everything from a browser and mail client to a disk defragmenter.

Microsoft's office products also incorporate free features, like spelling and grammar checking, that cost extra not too long ago. Unfortunately, those toss-ins disguise the fact that the company's software prices haven't budged in recent years.

But today, you can refuse to pay Bill a nickel and purchase a Windows-less PC using a no-charge version of Linux or FreeBSD. Is Office too expensive for you?

Sun Microsystems Inc.'s StarOffice is free. It's nowhere near as advanced as Sun would have you believe, but it'll get the job done. Need a Web server that's been tested in the trenches? Apache Server is there for the taking.

That, of course, is just the beginning. Storage, services, content, and even Internet access are all available for free. Phone and cable companies may soon offer no-cost Web terminals if you sign up for their services--much as cellular providers often give away the phones when you sign long-term service contracts.

Advertising may soon be the only thing on the Web that actually costs any money.

Can this possibly last? Perhaps. Ad-subsidized media can persist as long as advertisers are convinced that consumers respond to their messages and buy their products. That model worked for radio and television, and the Web offers the potential for even more targeted marketing--like the ability to find out you're a left-handed golfer who buys coffee mugs. But if online advertising is so effective, why do so many dot coms use print ads to hawk their sites?

Several free schemes have fallen by the wayside. Remember FreePC? It offered a system in exchange for surrendering personal information and watching ads, but that deal ended when EMachines bought the company. And the free online Wall Street Journal disappeared long ago, in favor of a subscription model.

Those may be exceptions, however. "Free" is a powerful concept. Once people are used to getting something for nothing, it's hard to convince them to pony up.

Just as pay TV took years to get off the ground in a world of ad-supported free TV, Microsoft's Slate had to stop charging fees after failing to attract paying customers on the Web. Some question whether people will give up personal information in exchange for discounts. But the success of grocery bonus cards and casino affiliation cards suggests that people value parsimony over privacy.

If the trend continues, there may be nothing left to pay for. I might once have made an April Fool's joke about vendors offering free printers in hopes of making up the difference with sales of ink and paper. But given the tremendous drop in personal printer prices recently, that scenario could be commonplace by the time this issue hits the stands. (Tektronix, for one, has experimented with this free model.) Computers still cost money. But will we soon see computer cases and monitor bezels festooned with ads like stock cars, or software infested with as many commercials as Turner Broadcasting's movies?

Bet on it. But only if somebody gives you a free turn at the table.

PC World contributing editor Stephen Manes is the cohost of Digital Duo, a series appearing on public television stations nationwide. For program information, see www.digitalduo.com.

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