Last year, Jim Reardon equipped a home office from the freebies he got off the Internet.
A free color printer from Estamps.com and a free scanner from Insight.com. Unlimited Internet access through Netzero.com. Free voice mail from Ureach.com. Free subscriptions to Wired and other magazines from various sites. Free digital photo prints. Even a free yellow-and-black lava lamp from Lavaworld.com.
These days, the Illinois college student is hard pressed to find a free digital postcard. NetZero has started making him stare at movie ads before the service boots up. The company has also told him that if he spends more than 40 hours a month online, he'll have to pay a $10 fee. And his voice mail now costs $5 a month.
"I think the Internet's going to pretty much be, 'If you want something, you're going to have to pay for it,'" said Reardon.
Reardon is one of millions of people who had a good thing going. In the Internet's brief history as a commercial enterprise, both entrepreneurs and established firms have focused on building an audience by giving things away. Later, once they had a huge base of fans, they would figure out how to make money off them.
Later has now arrived. The crash in tech stocks has prompted Wall Street to demand profitability from Internet ventures immediately. Web companies that had been hoping to survive with advertising, such as the Yahoo portal or the Encyclopedia Britannica Web site, are furiously trying to develop subscription services. Companies that didn't previously bother their users with advertising, including the retailer Amazon.com Inc. and the e-mail program Eudora, now make full use of it.
"The Internet used to be a little like a 1968 Haight-Ashbury commune, where essentially everything was free," said Charles Ardai, chief executive of Juno Online Services Inc., an Internet service provider. "Now it's becoming more like Manhattan in 2001, where you have to pay for the things you most want to do."
"When 50 companies are giving things away for free, it's hard for one to charge," Ardai said. "When 40 of them go out of business and the other 10 are looking at each other nervously and thinking, 'We all need to find some way to make more money,' I think the environment is suddenly more conducive."
Yahoo Inc. is trying to do the same thing with its 185 million users. In a conference call earlier this year, President Jeffrey Mallett said the company's "biggest priority is to convert visitors to members." In an interview, Mallett added that while such core services as search, e-mail and bulletin boards will remain free for the foreseeable future, "I don't know about free forever."
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