Marco Arment thoughts on free as a business model in the light of Google Reader shutting down:
In other industries, this is called predatory pricing, and many forms of it are illegal because they’re so destructive to healthy businesses and the welfare of an economy. But the tech industry is far less regulated, younger, and faster-moving than most industries. We celebrate our ability to do things that are illegal or economically infeasible in other markets with productive-sounding words like “disruption”.
Much of our rapid progress wouldn’t have happened if we had to play by the rest of the world’s rules, and I think we’re better off overall the way it is. But like any regulation (or lack thereof), it’s a double-edged sword. Our industry is prone to many common failures of unregulated capitalism, with the added instability of extremely low barriers to entry and near-zero cost per user in many cases.
Via Daring Fireball