34% Buy Premium Features and Services

Social networking sometimes looks like a feature rather than a full business model, with the perhaps obvious exception of the leading portals. But affiliate advertising, virtual goods, micropayments, social network site merchandising, and data mining might emerge as viable alternatives to traditional revenue models, say researchers at In-Stat.

But there's some evidence the "give the base service away free, make money on upgrades" strategy does work. In-Stat notes that 66.6 percent of respondents to a recent consumer survey do not pay for premium services or features. But that leaves about 34 percent who do buy upgraded features.

Of course, much the same sort of analysis might be made of email or blogging. There are lots of business models of an indirect nature; some of a direct nature. About 16.7 percent of survey respondents use a mobile phone to participate in online social networking or video content sites. At the very least, that means more use of mobile data and mobile Web services.

In-Stat forecasts 92.2 million social networking users in the United States by 2012.

Verizon Wireless Adds Unlimited Music Downloads

Verizon Wireless has launched a new program that will let customers download as much music as they want from Rhapsody online music service for $15 per month, to seven handsets, with three additional handsets to be added as well.

The service will compete with MP3 downloads provided by other companies such as Apple's iTunes. Verizon has a similar deal with Napster.

Rhapsody is eliminating copy protection on all tracks bought from its online music store, which will enable them to be played on a variety of devices, including iPods.

Downloads do not seem to me to be a functional substitute for satellite radio, but one has to wonder how many other users think so.

3G iPhones Cost $256 to Manufacture

You might wonder how Apple can sell 3G iPhones at a subsidized price from AT&T of $200 or so. Well, according to iSuppli analysts, the phone costs about $265 to produce.

Apple gets $300 from AT&T for each device sold. After packaging, shipping and marketing costs, Apple will have to make its money elsewhere. Applications, music and movies would appear to be the "somewhere else."

As part of the new arrangement, Apple will not be getting recurring revenues from usage plans.

The company also forecasts 4.5 million iPhones sold this year, and over 30 million by 2011.

Comcast Adds Global Calling

Comcast has struck a deal with some IP voice provider, as it is launching calling to Western Europe, Latin America and Mexico. I'd guess it is Jajah underneath the hood, given the amount of activity Jajah is pouring into relationships with telcos and cable companies, as well as the spare capacity it has built into its global backbone network. Whomever the deal is with, the move by Comcast shows that telcos and cable companies can leverage over-the-top or Web activated forms of IP voice for out-of-territory calling.

SMS Packaging Like Long Distance

Text messaging packaging is starting to look like long distance used to, in some ways. In other ways, the packaging is starting to resemble voice usage packaging.

As per-message fees rise to the 20 cents a message rate for casual use, it makes sense to buy a bucket of minutes. That's a concept similar to the "presubscribed carrier" system for long distance calling in the U.S. wired telephony market. If users didn't pick a carrier, and use long distance on a "casual" basis, those users got socked with fairly expensive charges for used minutes.

Picking a carrier of record for long distance typically meant lower per-minute prices. With the rise of VoIP unlimited calling plans and "buckets of minutes" in the mobile market, that is less an issue than it used to be.

Text messaging, though, is moving that way. Carriers want users to upgrade to buckets, so pricing casual use at a high rate is one way to encourage that behavior.

In another sense, the new packaging also is similar to the voice bucket plans now used in the mobile industry. Usage above the bucketed amount incurs hefty additional usage fees. So people have incentive to buy bigger buckets than they think they will need as insurance against payment of those usage fees.

Text message pricing now has moved that way as well. The other effect is to increase the value of any unlimited texting plans.

One thing is clear enough: the highest revenue-per-bit service in the U.S. market is text messaging.

C Titles Prefer Web

According to an online study from Forbes.com and Gartner, the Internet continues to be the most influential and important source of business information for C-Level executives around the world, at 67%.

This number has increased 37% since 2004. At the same time, C-Level executives, citing newspapers such as the Wall Street Journal as their main source of business information, has decreased 36% since 2004.

The number of C-Level executives who prefer the Internet first thing in the morning has increased 22% since 2004, while those who prefer to read the newspaper first thing in the morning has declined 11% over the same time  period, the survey suggests.

HTTP is the Long Term Issue, Not P2P

Though it is peer to peer traffic that currently has network engineers concerned, HTTP traffic rapidly is surpassing P2P in volume, driven by the amount of video being viewed in a Web context.