Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.Another example: Social Media integration. A year ago this month, Facebook launched its API platform, allowing third-party developers to create applications that can easily be integrated into existing tools and features of the Facebook community. This opportunity has spawned over 26 thousand applications, generating over 1 billion downloads by Facebook users. It is free to use. However, the API is a "walled garden", providing no interoperability with other social media networks, creating a cost to the developer (e.g. their time).
This idea of providing an API to enable interoperability between your website / web service and others is taking off. Even the New York Times is jumping on the band wagon - they are working on an API to allow developers to import NYT content into new and yet-to-be-thought-of applications for disseminating content.
Earlier this year Google launched its Open Social product, with MySpace, LinkedIn and most others (except Facebook) on board. Their intent is to provide the infrastructure to allow developers to code their applications once, and then provide the tools and resources necessary to support the interoperability among the various social networks, websites, etc., current and future.
Facebook had attempted to license (i.e. charge) other social networks to take advantage of their platform. Bebo bit, licensing the platform last December. However, given Google's move, Facebook has been forced to go a step further, "open sourcing" their platform for anyone to use. Thus, like Google's Open Social, use of Facebook's API platform is now free for other social networks to integrate. The only cost is their time.
Facebook's obvious expectation is that other social networks will take the time to integrate, therefore offering Facebook's growing developer community more value for time spent developing within the their API platform.
The efficiencies of the internet continue to shrink even non-monetary costs (in this case, a developer's time). Interesting times...