A “freemium” is a version of a company’s product or service that they offer to users for free. It’s a great way to get users to try out a product or service. I’ve signed up for many myself. In some cases, the company offering the freemium tries to make money through advertising, but unless your product is Gmail, they don’t make much through ads. Most of the money is made when users convert to their premium, or paid, products.

For many web services, the freemium version is a feature rich product, So much so that you can do a lot without ever paying a penny. Prominent examples that come to mind are Dropbox, Evernote and RunKeeper.

While it would be easy to continue using these services without ever paying, I decided it was time last year to support the web services that I’m getting value from. For example, the premium version of Evernote is $45 – for the year! To put it in perspective, it’s less than $4/month, or just over 10¢ per day. It was pretty obvious that I was getting way more value than $4 per month from the product. Look at it this way: I spend more than that in one trip to Starbucks, and that fix only lasts a couple of hours. There’s even the added bonus of getting a few extra features, which makes the upgrade even that much easier to pull the trigger on.

In many cases, the annual fee for a service is even less than Evernote’s. I also subscribe to Remember the Milk, a to-do list manger that has helped me immensely over the last year. It only costs $25 for the year. Another of my favorites is RunKeeper, which is a downright bargain at only $20 for the year. Given how much I use these services, paying these small fees is the least I could do. I view it as doing my part to help insure that these application are available in the future.

So what’s my advice? By all means, take advantage of the freemium model. Use it to try services and see if they add value. Once you determine they do, then upgrade to the premium version and pay the nominal annual fee. If not for the additional features, do it to support the teams who are making it happen so they can continue to work on and develop the product. Otherwise, you have no right to complain when the service you love and depend on falls into a state of disrepair and eventually goes away.

There are lots of rumors going around that Google is going to open up retail stores in time for the next holiday season. I don’t think they’ll succeed.

For some reason, there’s a desire these days for companies to expand outside their areas of expertise, whether it’s organically or through acquisitions. In the overwhelming majority of cases these expansion plans don’t work. Companies need to focus on their strengths.

Let’s look at some examples.

Google is a technology company
Google started out as a search engine, ventured into advertising, and then started creating all sorts of other technologies ranging from Gmail to a mobile operating system. In all of these cases, what Google does well is technology. They don’t do so hot on the support and marketing fronts. In fact, Google’s previous forays into retail selling of phones. The Nexus One, which was a great phone, was not promoted or marketed well, and anyone who tried to purchase a Nexus 4 before the holidays is well aware of how poorly they handled the demand for that product. I don’t see how they’ll be able to maintain a retail presence.

Apple is a hardware company
Apple may want to be claim their a vertically integrated hardware and software company, but in my mind they are a hardware company. What they do well is create hardware that is easy to use for the average consumer because of the user interface they place on the hardware. When they’ve tried to venture too far away from hardware into services and software, their efforts have not gone well. Just look at things like their Ping music service, iCloud, and most recently Apple Maps. Apple would be best served to focus their efforts on creating outstanding hardware and leave the software and services that go on top to someone else.

Microsoft is a software company
I find the rumors of Microsoft building their own smartphone entertaining. Quite honestly, I don’t think a Microsoft phone would even be as successful as the Surface tablet, which has gotten of to a very slow start. I understand that there is a certain allure for Microsoft in wanting to be like Apple, but the fact of the matter is that it’s not in Microsoft’s DNA. Similar to Apple, Microsoft would be better served to focus on the software side of things and leave the hardware up to their partners who know better.

BlackBerry is an enterprise company
What precipitated the demise of BlackBerry? Chasing the consumer. BlackBerry does not know how to service the consumer market – never has and never will. Even today, BlackBerry would be best served to focus on their enterprise strengths. They still need to build competitive hardware, but the hardware (and software) needs to be focused on serving the needs of their enterprise clients. By chasing the consumer market, BlackBerry alienated and lost their enterprise base and was never able to become relevant in the consumer space. In other words, they lost on both fronts, which they will be hard pressed to recover from, even with the release of BB10 and their new Z10 and Q10 handsets.

The moral of this story, identify what you’re good at and embrace it. Trying to expand to be all things to all people is a recipe for disaster that doesn’t work well for anyone, and it doesn’t matter if you’re in the technology business or outside of it.

I was involved in an entertaining discussion with a group of individuals this week where someone stated that the battle for the internet is over, Facebook has won.

It made me laugh and think of an article that John Naughton wrote in The Guardian recently titled, “Why the Facebook and Apple empires are bound to fail.” It makes a bunch of great points.

“Nothing Lasts Forever”

Unfortunately, as in the real world, while companies are built to last forever, they don’t. Markets and technologies change, and the favorites of today eventually become forgotten tomorrow, only to be remembered through case studies and business school discussions. It’s hard for us to imagine a world where Microsoft, Apple, Facebook, Google, Intel and Cisco aren’t the dominant technology companies, but a time of decline will come for all of them.

“…Facebook’s latest attempt to become the AOL de nos jours…will fail for the same reason that AOL’s attempt to corral users within its walled garden failed: the wider internet is just too diverse, innovative and interesting.”

I don’t bet against the web. Naughton’s spot on when he says the internet is “too diverse, innovative and interesting.” There is only so much that Facebook can do to keep users captive on its site. There’s too much innovation and interesting content being created on the web for Facebook to keep up and stop users from leaving the comfort of their environment for greener pastures.

“…because Facebook looms so large in the public consciousness at the moment, it’s difficult to keep it in perspective.”

We tend to get so caught up in the moment that we lose historical perspective. Sure, people will say that it’s different this time. We heard that before the internet, telecom and real estate bubbles popped. There’s no such thing as different this time. Eventually, fundamentals (and reason) take over, allowing us to gain perspective and realize the errors in our previous ways of thinking.

“Although the eclipsing of Apple and Facebook is inevitable, the timing and causes of their eventual declines will differ….What will determine its [Apple’s] future is whether it can come up with new, market-creating products such as the iPod, iPhone and iPad.”

The hardware business is a brutally competitive business characterized by compressed product cycles and thin margins. Apple has managed to buck the trend temporarily, but it won’t last. They are one, maybe two, bad product decisions away from losing their status as a category defining company and becoming just another face in the crowd. Don’t think it’s possible, just take a look at Sony’s rise and subsequent fall as a consumer electronics giant.

“Facebook, on the other hand, makes nothing. It just provides an online service that, for the moment, people seem to value. But in order to make money out of those users and satisfy the denizens of Wall Street, it has to become ever more intrusive and manipulative  It’s condemned, in other words, to intrusive overstretch.”

If not already, Facebook will become a slave to its investors. Having a billion users means nothing if you’re not making money off of them. Facebook has been lucky thus far that its user base has tolerated so many of its over reaching privacy intrusions. At some point, Facebook’s need to satisfy its investors will force it to go too far, driving users away.

The moral or the story: history is doomed to repeat itself. When we’re engrossed in the moment, we lose perspective. It’s hard to see how the companies we hold in such high esteem today will fail. Unfortunately, nothing lasts forever, and the cyclical nature of technology only reinforces that tired cliché.

There is concern these days that the web is under attack as companies like Google, Apple, Facebook and Twitter wage platform wars in order to control and monetize their users. These companies have amassed large user bases, and the longer they can keep their users on their platforms and within their “walled gardens”, the more money they can potentially make off of them through services and advertisements. This causes these companies to curate web content for their users, bias search results toward their web properties and offerings, and take ever increasing liberties with their users personal information and trust. While they may not be trying to replace the web, they are trying to replicate it with a network their users will never have to leave.

I do not share this concern over the web because I’ve seen this game played out before.

Twenty years ago, online companies Compuserve and AOL tried to play the same game. Both companies amassed large user bases. They provided a gateway for people to access their version of the web, which was a moderated and curated version of content supplied by both companies and individuals.

I was a member of AOL back in the days before the web browser. At the time, it was the best way to access online content. You could participate in chat forums and user groups. You could read magazines such as Sports Illustrated and Consumer Reports. Companies advertised and created storefronts where you could buy stuff, not much different than Facebook Fan Pages of today.

With the introduction of the web browser, people discovered there was a much richer experience on the web outside of the walled gardens of AOL and Compuserve. As people left for the freedom of the open web, AOL and Compuserve’s user bases dwindled. AOL and Compuserve tried to maintain their user base by replicating their curated experience on the web, but this failed, too. I left AOL back in the late nineties, and I can’t remember ever accessing their site on the web.

The moral of the story is that you don’t bet against the web. While Facebook, Apple and Google may want to keep (or trap) their users within their walled gardens, it is only temporary. Eventually, a service or company that provides more freedom and unfiltered access to information from the web will displace these companies. It’s only a matter of time.

Trends always move in cycles. Whether it’s fashion, hairstyles or technology, there will be fads that come and go, only to return later. Trying to trap users on your platform is one of those fads. It passed once, and it will pass again.

So while I won’t bet against the web, I will bet that this fad will pass. And it’s a bet that you can take to the bank.