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Anyone can sell an online service – its giving it away free that’s hard

Chris Anderson, the editor of Wired Magazine, is well known for having popularized the idea of the Long Tail and the Zero Dollar Economy. But there are complexities inherent to giving things away for free that Anderson did not exactly address in his Wired article from 2008 and the subsequent book. Anderson’s theory goes like this – create a free service that becomes wildly popular. Then, introduce a premium version of your service that 5% of your users are willing to pay for. The cost of providing free service to the other 95% of your users has to be so…