Dave Winer has a wonderful description of the model of many “leading” internet companies: the “hamster” business model. He writes:
This is, btw, the user-as-hamster business model. The one where you sit in a cage and make the wheels spin around. Either you’re watching commercials while doing your workout, or you’re generating information about yourself which is used to decide what commercials to show you. Either way, your value to them is a very very small fraction of your value as a human being. And quite a bit less than if you were paying for the service yourself.
It seems to me that “your value to them” has to pay for delivering the value that you get out of it, plus their profit margin, plus the entire infrastructure that keeps the hamster in the cage. So all other things being equal, if you were paying for the service yourself, you should get it at a cost that remove their profits and the cost of the cage infrastructure. Assuming you can get the same economies of scale, which is where lies the rub. (Or does it?)