“There’s no such free thing as a free lunch” used to be a life maxim your grandfather would share with you. And nobody seems to have any doubts whatsoever. But then, the internet broke out of the academic world to become mainstream. Suddenly, things like free music, movies, books, audiobooks, and TV shows were on the cards. So naturally, millions of users worldwide were delighted — many of them remain so.
So what are we to make of Granddad’s old rule? First, free things have kept popping up. Free email services, proxy servers, and digital services are now around. Some became veritable institutions like Hotmail, Yahoo, or Gmail. Did the world go crazy? Do we need a new Adam Smith to make sense of the digital economy? And the most important and sensitive question of all: was grandfather wrong about lunches?
We need neither of the abovementioned things, and Granddad wasn’t wrong either. Instead, we need to understand that all those free services take payment. It’s just that it’s not money.
Let’s take Gmail, for instance. In the current times, it’s almost equivalent to a digital passport. And you don’t have to pay for it. Or do you? Google’s business model is to offer you ads. And they have the technology to show you advertisements you could click on.
So how do they know how to pick suitable ads for you? Gmail scans your emails to figure out what you’d like to buy with the highest probability. And every time you click, Google gets paid. So it’s not so free when you think about it. You pay for your Gmail by clicking on ads and providing Google with all the information they need about you to decide which ads to show you. So you see, there is no free lunch in Gmail.