Free-driven web-based business models

Internet has increased the companies' propensity to offer products/services free of charge through web-based platforms. This choice challenges the logic of traditional business models aimed at increasing the value captured by the firm. In order to analyse the impact of the free of charge offering on the enterprises' web-based business models, we developed a systematic theoretical framework able to identify the key actors and flows of value involved in these business models. We tested this framework on 125 web-based platforms, clustering them through a combination of Multiple Correspondence Analysis and Hierarchical Clustering on Principle Components. The analysis allowed us to identify five different configurations of free-driven business models. Differently from the previous literature, we identify three specific configurations based on user-innovators, who are customers interested in participating in value creation processes, if adequately incentivized. These configurations are characterized by different sources of revenues and by the provision of specific free flows of value to user innovators, who can contribute to the business model with their working knowledge and reputation. Our analysis not only contributes to the academic debate on online business models, but it can support web-based companies in the definition of business model characterized by an effective and sustainable equilibrium between value creation and value capture processes.

Automated summary

The Internet has encouraged more businesses to offer products/services for free on online platforms, challenging traditional business models. Through a theoretical framework and analysis, five distinct configurations of free-driven business models were identified, including three specific configurations based on user-innovators, providing new insights for the development of innovative business models.