Overheard: Word of the Day

Aug 25 2008   1:20PM GMT

Overheard: Freemium biz model explained

Margaret Rouse Margaret Rouse Profile: Margaret Rouse

don_dodge1.jpg The Open Source Software vendors have a similar model where they offer the software for free download and sell consulting, maintenance and support contracts for revenue.

Don Dodge, Freemium – Free to paid conversion rates

Don Dodge does a good job weeding through the Web 2.0 biz-speak and nailing down why the Freemium model could actually work for some start-ups.

Do the math. 100,000 free users convert to 3,000 paid users. They pay between $10 to $50 per user per month. Lets use $25 as an average. That is $75K a month or $900K per year. That is an excellent revenue stream for companies that typically have 3 to 5 employees.

 Comment on this Post

 
There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when other members comment.

REGISTER or login:

Forgot Password?
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to: