How Your Favorite Internet Companies Make Money
By Fran Berkman 2012-10-09 18:56:38 UTC
After setting up free networking profiles on Facebook. Twitter and LinkedIn. an Internet user can instantly access the largest repository of information mankind has ever compiled at no cost — through Google. That person can stream music for free on Spotify, watch videos for free on YouTube. download free mobile phone apps on iTunes, set up a website for free on WordPress and post free classified ads on Craigslist.
Indeed, the Internet is a bargain hunter's dream.
The paradox is that, while a great number of Internet services come gratis, the companies that provide these services are turning huge profits.
As one might expect, advertising and paid subscriptions are two major sources of revenue for these companies. The Internet has also given rise to a phenomenon known as "freemium ," when a company provides a
base service for free but charges fees for certain premium features. For instance, Dropbox offers 2GB of free cloud data storage. If a user wants more space, however, he or she will have to pay up.
The following interactive graphic, conceptualized by SEER Interactive and designed by O3 World. describes how popular Internet companies earn revenue. It also reveals which companies are profitable and which are not.
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