Book of the week: Free: The Future of a Radical Price by Chris Anderson

(Hyperion, $26.99)

Giving products away for free has always been a useful marketing gimmick, says Wired magazine editor Chris Anderson. When American inventor King Gillette created the disposable razor-blade business in the early 20th century, he quickly discovered that customers would adopt his core product more quickly if he charged nothing for the relatively expensive razor that it snapped into. But the Internet has amplified the power of “Free.” As the costs associated with distributing information approach zero, competition forces the price of every product or service touched by web technology “down the path toward gratis.” Traditional media and many other industries may perish as this movement gains momentum, Anderson says, but there will still be plenty of money to be made when zero becomes the optimal price in most every line of business.

Anderson’s new book drew a wave of attention even before its release, said Drake Bennett in The Boston Globe. A literary website noticed that many of Free’s background passages were “copied, uncredited,” from the online encyclopedia Wikipedia, and Anderson was forced to apologize for what he described as an editing slip-up. True to his reputation, though, the influential author of The Long Tail has produced another “lively conversation piece” that links his name to a seemingly big idea, said Janet Maslin in The New York Times. While the book isn’t “as sharp as its one-word catchy title,” it highlights a major challenge facing businesses today and is “full of specific examples” of how they might best respond. Smart firms, he says, will follow in the footsteps of Gillette and Google, using giveaways to find customers, then generating revenue by meeting other needs of those customers or finding advertisers who want to reach them.

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“Free,” unfortunately, generally doesn’t work as a business model, said Malcolm Gladwell in The New Yorker. When Anderson touts the give-it-away tactics of YouTube, the popular online video archive, he gives little hint that the Google subsidiary actually loses roughly $500 million a year. Technology may permit YouTube to lower its video distribution costs to nearly zero, but even nearly zero multiplied by 75 billion video downloads a year “is still a very large number.” Anderson asks us to believe that there is an “iron law” governing where business is headed in the Internet era. In truth, “the digital age has so transformed the ways in which things are made and sold that there are no iron laws.”