Wednesday, April 13, 2011

Qihoo 360's Business Model isn’t Freemium

First we have to clarify the concept of freemium. The so-called freemium is one kind of business model that provides the main or basic function of the products or services freely but charges for the value-added functions of the products or services.

The first person to introduce the concept of freemium is venture capitalist Fred Wilson. He first said about this business concept that freemium provides free services in order to obtain a large number of users and then charges for value-added function or enhanced edition of the services from the users. He took Skype, Flickr, Trillian, Newsgator, and Webroot for example.

In China the most typical freemium is QQ, which provides chat, groups, file transmission, voice call and video call freely, but charges for QQshow and every kind of privileges of membership.

So this kind of business model must contain two requirements. One is to provide the same product or service to the non-paying and paying users. The second is the value-added function is for ordinary users but not companies or enterprise.

Now let us analyze the so-called freemium of Qihoo 360. It provides safety service to users and charges websites traffic from companies. So we can't call this business model freemium. The Qihoo 360's business model is the same as and And all of the Qihoo 360's products and services can't add value-added functions that it can charge for. And Apple's App Store is not freemium.

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