That’s right. The title actually reads TANSTAAFL. This weird sounding acronym was first used by Robert Heinlein in his 1966 sci-fi novel, The Moon is a Harsh Mistress. The aphorism that it stands for, however, predates it by decades. “There ain’t no such thing as a free lunch” (TANSTAAFL) expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden. Of course, to be grammatically correct, it should be “TINSTAAFL”: There Is No Such Thing as a Free Lunch.” The origins of this adage can be traced back to nineteenth century America, where pubs would offer free lunches to customers once they bought a drink. The lunch consisted of salty meats and pretzels which would make customers buy and guzzle more drinks. Thus, the ‘free lunch’ was not really free!
You would think that with time, the adage has probably lost all meaning, given the fact that a number of social service platforms (Facebook, Twitter, Google+ et al.) are now free to use. Nothing could be further from the truth. Facebook, for instance, handles the pages of 750 million users, enables more than half of that number to visit and update their pages every day and hosts more than 70 billion photographs. The cost of computing and communications resources- in terms of server farms, energy, bandwidth and technical expertise-required to make this happen doesn’t bear thinking about. And my guess is that most Facebookers don’t think about it. But it costs money-millions of dollars a month, every month. The monthly amount is called the “burn rate”. It comes from investors who make their cash available for burning in the hope that it will eventually pay off in terms of a stock market floatation or the evolution of a profitable business whose shares will be worth holding. In the internet age, the favored strategy has been to “get big fast”-that is, add users/subscribers at an exponential rate, and then find a way of monetizing the resulting hordes.
It doesn’t take a rocket scientist (or a certain string theory physicist :p) to figure out that the best way to get big fast is to offer your services for free. Which is exactly what Google, Facebook and Twitter did. But then came the awkward question: how to turn all those free-riders into revenue? The only answer anyone has come up with so far is –surprise, surprise-advertising. How well has it worked? To date the answers are: for Google, spectacularly; for Facebook, moderately; and for Twitter, not at all…yet.
Google’s success stems from the fact that it can use web searches to target ads at its users: if an ad pops up that is relevant to something you’ve been searching for then you are more likely to pay attention to it. Most recently, Google has come up with a new feature for its highly regarded digital assistant, Google Now, wherein a user can glance at a list of outlets where the product he/she has been looking for (or similar products) are available for purchase. Facebook’s unique selling proposition to advertisers is that it knows the real-life identity of its users (and of their friends), so in principle, it can target ads that are customized for every individual user.
And Twitter…? I’ll come to that in a moment. For now, the thing to note is that the business model of all these free services involves exploiting what they know about you. Or, to put it more crudely, if you use “free” services then what you have to accept is that you(or, more precisely, your identity) are their product.
The penny drops for most users when it occurs to them that the service is, somehow, becoming more intrusive-whether through abrupt changes in default privacy settings, or sudden changes in the way their news feeds are reconfigured. What started as an elegant, clean interface suddenly starts to look very cluttered and, well, manipulative.
If you are a Facebook or Google+ user (who isn’t?!), you would have noticed this trend. Twitter, however, somehow seems immune to it. In fact, it hasn’t really changed much since its inception: it retains its minimalist and intuitive interface. That isn’t because Jack Dorsey & co. are nicer human beings than the folks over at Menlo Park: it’s just that they haven’t yet been able to figure out a way of monetizing their vast hordes of users. And they face the same dilemma: the moment they adopt the techniques needed to exploit their users, many of them will realize that officiousness is the price one pays for a “free” service.
It doesn’t have to be like this, of course. But the alternative business model-the one which imposes fees for online service-is probably even more likely to be met with utter disdain. Carpers can say whatever they want: at least this model does not rely on exploiting identities. It obeys the first law of internet services. TANSTAAFL.