John Naughton points out that TANSTAAFL still applies, even to “free” services on the internet like Facebook and Twitter:
Physics has Newton’s first law (“Every body persists in its state of being at rest or of moving uniformly straight forward, except insofar as it is compelled to change its state by force impressed”). The equivalent for internet services is simpler, though just as general in its applicability: it says that there is no such thing as a free lunch.
The strange thing is that most users of Google, Facebook, Twitter and other “free” services seem to be only dimly aware of this law. Facebook, for example, handles the pages of 750 million users, enables more than half of that number to visit and update their pages every day and hosts more than 70 billion photographs. The cost of the computing and communications resources — in terms of server farms, energy, bandwidth and technical expertise — required to make this happen doesn’t bear thinking about. And my guess is that most Facebookers don’t think about it.
But it costs money — millions of dollars a month, every month. The monthly amount is called the “burn rate”. It comes from investors who make their cash available for burning in the hope that it will eventually pay off in terms of a stock market flotation or the evolution of a profitable business whose shares will be worth holding. In the internet era, the favoured strategy has been to “get big fast” (the title of a famous book about Amazon — that is, add users/subscribers at an exponential rate, and then find a way of monetising the resulting hordes.
