Will Yahoo!'s fee plan set a precedent?

Is the Web's free ride nearly over? Now that Yahoo! is charging auction fees, analysts say other free services could follow suit

With "make money" the new Web mantra, industry analysts say companies will soon start charging for services they once offered for free. The first likely candidate is auctions, with many portals expected to follow Yahoo!'s lead. Beginning 10 January, the Web giant will start charging listing fees of 20 cents to $2.25 per item.

"There used to be the time that companies wouldn't charge and steal users from others that did," said Kirstin Hoefer, director of content applications at broadband provider Excite@Home. "Companies can't do that anymore."

It's not that companies want to start charging for services such as online payments and classified listings. In fact, Jupiter Research analyst Andrew Ari Clibanoff said Yahoo! is probably going to lose some customers to free auction sites.

But shrinking advertising dollars means companies are going to have to come up with other ways to make money or shut their virtual doors for good.

"I see Yahoo!'s decision to jump off the advertising boat and go with a revenue model [as]... an argument for others to do it," he said.

Yahoo! wasn't the first to start charging for a service that it once offered for free. Months ago, Sports Web site Asimba.com decided to start charging users who wanted its once-free personalised workout service.

But which free services will likely carry price tags?

Content, for one, said Jupiter Research's Clibanoff, although he said there are no indications that pure content sites plan to start charging.

"Paid content is something Jupiter is paying a lot of attention to," he said. "We're exploring a lot of the opportunities to monetise those deliveries. But at this time, there are no visible investments that we endorse right now."

Free Internet access could be another victim of the retrenchment, Clibanoff said.

They include pure plays like NetZero, which announced it's going to start charging some of its users who surf more than a certain number of hours a month. Market conditions have already shuttered other free-Internet-access companies.

And portals that offer free Web access to entice customers may soon convert from a hosted buffet to a no-host bar, analysts said. Consumer-to-consumer sites, like half.com, may also add a fee, Clibanoff said.

Excite@Home's Hoefer said sites listing classified advertisements for free may add a price tag to that service as well. Why not? Consumers already pay for newspaper advertising.

"It would be a natural," she said.

But there are still some services that Web companies will shy away from attaching dollar signs to, such as free email, instant messaging or chat.

"They are already kind of blended into the fabric of the Web," he said. "To pull it out of that and isolate a user service makes it not do-able."

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