This week’s AskPablo comes from Maryline: “I am interested to know

AskPablo: Exotic Bottled Water

This week’s AskPablo comes from Maryline: “I am interested to know the ‘true-cost’ of a bottle of Fiji water that currently sells for $1.50 in the United States. David Lazarus wrote a report on the water business in the SF Chronicle and studied the success of Fiji (January 21 edition), where ‘distance and exoticism are marketed as advantages.’ Fiji is now # 2 in premium bottled water, behind Evian where we have the same transportation issue. An environmental absurdity!”

Please note: Due to overwhelming reader interest in this topic some of the assumptions made in this column have been adjusted. Numerous readers were kind enough to provide more accurate values for some of my previous assumptions.

I agree! I once heard Julia “Butterfly” Hill (everyone’s favorite tree-sitting sweetheart) say that it pollutes several times more water to make the plastic bottle than it actually holds. We might as well put that myth to the test while we’re at it. Where do we begin? Well, I doubt that Fiji has a booming plastics industry so they probably get the bottles in the form of “Blanks” from China, which are then expanded to their final size and shaped by a process called “stretch blow molding.” The total mass of the empty 1 liter bottle is probably around 0.025kg (25g) and it is made from PET (Polyethylene terephthalate) Plastics of this type use around 6.45kg of oil per kg, 294.2kg of water per kg, and result in 3.723kg of greenhouse gas emissions per kg. So, with a quick check (200kg/kg x 0.025kg = 5kg of water) we find that Butterfly is indeed correct. Based on my calculations a bottle that holds 1 liter requires 5 liters of water in its manufacturing process (this includes power plant cooling water).

Let’s take a look at the transportation aspect to see what the total ecological impact of an imported bottle of water might be. A container vessel uses 9g of fuel per tkm (that’s metric tons carried x distance traveled), 80g of water per tkm, and releases 17g of GHGs per tkm. The distance from China to Fiji is 8,000km, which gives us exactly 0.25tkm ( (0.025kg / 1t/1000kg) x 8,000km = 1.0tkm). So, 2.3g of fossil fuels, 20g of water, and 4.3g of GHGs per bottle delivered to Fiji from China.

Now let’s look at the trip to the US. The distance from Fiji to San Francisco is 8,700km. But this time the bottles will be full, so they will have a mass of 1.025kg each. This gives us a much larger value of 9.8tkm ( (1.025kg / 1t/1000kg) x 8,700km = 8.9tkm) which I will round up to 9tkm. So, 81g of fossil fuels, 720g of water, and 153g of GHGs per bottle delivered to the US from Fiji.

Since the fossil fuels end up being accounted for in the GHG emissions I’ll ignore those values for now. The total amount of water used to produce and deliver one bottle of imported water is 6.74kg (5kg + 20g + 1kg + 720g)! And the amount of GHGs released amount to 250g (93g + 4.3g + 153g), or 0.25kg, or 0.00025 tons. If you wanted to offset your annual imported water habit (are you eco-chic Hollywood types listening?) with DriveNeutral it would cost you $0.68 (0.00025 tons/day x 365 days/year x $7.50/ton).

But how much does it cost to deliver the water from halfway around the world? Let’s assume that the cost of transportation is based on our fossil fuel use assumptions above and that the bottle producer and the shipping company charge double their material cost. I am not sure if these are valid assumptions, but they are just assumptions after all… So, 160g of fossil fuels to make the bottle, 2g to deliver it to Fiji, and 81g to deliver the full bottle to the US. From economics we learn that fixed costs (equipment, etc.) in high-volume production are negligible in the long run so it is pretty safe to assume that the cost of making and delivering the bottled water is linked to its variable cost. In this case the variable cost is the fossil fuel (since the water comes out of the ground for free), which amounts to 0.243 kg. A standard oil barrel holds 159 liters and one liter of oil weighs 850g/liter, so one barrel holds 135.15kg of oil. One barrel costs between $50 and $70 (let’s say $60, depending on OPEC’s mood and other factors), so 0.243kg would cost $0.11 (1 barrel/135.15kg x $60/barrel x 0.243kg). And applying our earlier mark-up assumption, the cost to produce and deliver a bottle of imported water is $0.22, leaving $1.28 per bottle profit for the manufacturer and the retail store.

I hope that answers your question Maryline!

Pablo Päster, MBA
Sustainability Engineer
www.AskPablo.org
Pablo(dot)Paster(at)gmail(dot)com

that currently sells for $1.50 in the United States. David Lazarus wrote a report on the water business in the SF Chronicle and studied the success of Fiji (January 21 edition), where ‘distance and exoticism are marketed as advantages.’ Fiji is now # 2 in premium bottled water, behind Evian where we have the same transportation issue. An environmental absurdity!”

Please note: Due to overwhelming reader interest in this topic some of the assumptions made in this column have been adjusted. Numerous readers were kind enough to provide more accurate values for some of my previous assumptions.

I agree! I once heard Julia “Butterfly” Hill (everyone’s favorite tree-sitting sweetheart) say that it pollutes several times more water to make the plastic bottle than it actually holds. We might as well put that myth to the test while we’re at it. Where do we begin? Well, I doubt that Fiji has a booming plastics industry so they probably get the bottles in the form of “Blanks” from China, which are then expanded to their final size and shaped by a process called “stretch blow molding.” The total mass of the empty 1 liter bottle is probably around 0.025kg (25g) and it is made from PET (Polyethylene terephthalate) Plastics of this type use around 6.45kg of oil per kg, 294.2kg of water per kg, and result in 3.723kg of greenhouse gas emissions per kg. So, with a quick check (200kg/kg x 0.025kg = 5kg of water) we find that Butterfly is indeed correct. Based on my calculations a bottle that holds 1 liter requires 5 liters of water in its manufacturing process (this includes power plant cooling water).

Let’s take a look at the transportation aspect to see what the total ecological impact of an imported bottle of water might be. A container vessel uses 9g of fuel per tkm (that’s metric tons carried x distance traveled), 80g of water per tkm, and releases 17g of GHGs per tkm. The distance from China to Fiji is 8,000km, which gives us exactly 0.25tkm ( (0.025kg / 1t/1000kg) x 8,000km = 1.0tkm). So, 2.3g of fossil fuels, 20g of water, and 4.3g of GHGs per bottle delivered to Fiji from China.

Now let’s look at the trip to the US. The distance from Fiji to San Francisco is 8,700km. But this time the bottles will be full, so they will have a mass of 1.025kg each. This gives us a much larger value of 9.8tkm ( (1.025kg / 1t/1000kg) x 8,700km = 8.9tkm) which I will round up to 9tkm. So, 81g of fossil fuels, 720g of water, and 153g of GHGs per bottle delivered to the US from Fiji.

Since the fossil fuels end up being accounted for in the GHG emissions I’ll ignore those values for now. The total amount of water used to produce and deliver one bottle of imported water is 6.74kg (5kg + 20g + 1kg + 720g)! And the amount of GHGs released amount to 250g (93g + 4.3g + 153g), or 0.25kg, or 0.00025 tons. If you wanted to offset your annual imported water habit (are you eco-chic Hollywood types listening?) with DriveNeutral it would cost you $0.68 (0.00025 tons/day x 365 days/year x $7.50/ton).

But how much does it cost to deliver the water from halfway around the world? Let’s assume that the cost of transportation is based on our fossil fuel use assumptions above and that the bottle producer and the shipping company charge double their material cost. I am not sure if these are valid assumptions, but they are just assumptions after all… So, 160g of fossil fuels to make the bottle, 2g to deliver it to Fiji, and 81g to deliver the full bottle to the US. From economics we learn that fixed costs (equipment, etc.) in high-volume production are negligible in the long run so it is pretty safe to assume that the cost of making and delivering the bottled water is linked to its variable cost. In this case the variable cost is the fossil fuel (since the water comes out of the ground for free), which amounts to 0.243 kg. A standard oil barrel holds 159 liters and one liter of oil weighs 850g/liter, so one barrel holds 135.15kg of oil. One barrel costs between $50 and $70 (let’s say $60, depending on OPEC’s mood and other factors), so 0.243kg would cost $0.11 (1 barrel/135.15kg x $60/barrel x 0.243kg). And applying our earlier mark-up assumption, the cost to produce and deliver a bottle of imported water is $0.22, leaving $1.28 per bottle profit for the manufacturer and the retail store.

I hope that answers your question Maryline!

Pablo Päster, MBA
Sustainability Engineer
www.AskPablo.org
Pablo(dot)Paster(at)gmail(dot)com

http://www.triplepundit.com/pages/askpablo-exotic-bottled-water-002401.php 

http://www.inhabitat.com/2007/05/21/sevilles-solar-power-tower/

by Andrew Beattie (Contact Author | Biography)
<A href=”http://ad.n2434.doubleclick.net/jump/N2434.Investopedia/B2528560.5;abr=!ie4;abr=!ie5;sz=300×250;ord=[timestamp]?”> <IMG src=”http://ad.n2434.doubleclick.net/ad/N2434.Investopedia/B2528560.5;abr=!ie4;abr=!ie5;sz=300×250;ord=[timestamp]?” BORDER=0 WIDTH=300 HEIGHT=250 ALT=”Click Here”></A> The Scottish have long been famed for their frugality and practicality. Henry Duncan, a Scottish minister, founded the world’s first commercial savings bank. Adam Smith, one of the most famous figures in economics also hailed from Scotland. (For more on Adam Smith, see How Influential Economists Changed Our History.)

It’s no coincidence that many of the successful businesses today have, among their portraits of former CEOs and founders, a painting of a side-burned Scot whose eyes suggest any spare change would have to be pried out of his cold, dead hands.

In this article, we will look at three ways you can give your budget a boost using some of the famed Scottish frugality.

1. Be Utilitarian
When William Wallace led the Scots against the English in the 13th and 14th century, the militiaman’s weapon of choice was more likely to be a pitchfork or scythe than a spear or sword. Why? The average Scot used a pitchfork everyday, but swords were expensive and rare.

In battle, a sharp pitchfork was just as fatal as a sword, so very few men needed swords. Many people would be well served just by learning this one lesson: buy what you need, and if your needs change, adapt. It’s foolish to buy a sword if a pitchfork will do just as nicely.  

Examples abound of people paying for more than they need: a polished teak table to hold up a TV dinner, a brand new laptop to send email and print photos, an SUV to drive to the suburbs and back or a huge house that is ruinous to maintain. The waste goes on and on.

Plan your purchases as you would plan a vacation. Know precisely what you need and how much you are willing to pay for it. Write it down and carry it like talisman to ward off aggressive salespeople. (To turn your vacation dreams into reality, check out Travel Tips For Keeping You And Your Money Safe.)

2. Buy Second Hand
Britain’s economic emergence during the industrial revolution owed much to a single invention: the Watt Steam Engine. In 1763 James Watt, a Scotsman, got his hands on a broken, second-hand steam engine and modified it to be much more efficient. Within years, Watt went from refurbishing old models to creating his own line of powerful engines - engines that drove the factories that made up the industrial revolution. The lesson of buying second hand, while less dramatic than powering the industrial revolution, can save you significant amounts of money. 

Used goods were once the specialty of pawnshops – where you could get a near-new stereo for a 70% discount if you didn’t mind the bullet holes and the dark stain on the left speaker. However, these goods have now become commonplace. Quality second-hand shops are popping up all over the place. These stores offer used models in good working condition at significant discounts compared to buying new. Garage sales, warehouse auctions and eBay auctions are also great places to search when you know what you want.

Another area where buying second-hand pays off is in cars. Because new cars generally plummet in value once they have drive off the lot, a careful buyer can find a used car comparable to the showroom model at a huge discount. Japanese cars in particular seem to hit a certain price and stick there whether you own it for two years or five. This means if you find a decent used car, you may be able to sell it after a year or two for nearly the same price as you paid for it. Whether it is a car or a stereo, you can save yourself a lot of money by finding a used model with the same capacity. (For more on used-car savings, read Wheels Of A Future Fortune.)

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3. Do It Yourself
When the Oxford English Dictionary was floundering on the edge of oblivion, the university brought in a Scotsman by the name of James Murray. Where the previous chief lexicographers delegated and did little, Murray rolled up his sleeves and began hammering away at the dictionary letter by letter. His do-it-yourself attitude saved the dictionary. He managed to keep expenses down and still produce results. This attitude will save you more money than you may realize.

You are the cheapest labor you can hire. When you pay someone to do a task such as mow your lawn, paint your house or change your oil, the service is costing you much more than the amount on the receipt. To understand what you are losing by not being hands-on, you have to look at how much income you have to earn to produce enough after-tax dollars to pay for a particular service.

For example, if you pay $1,000 to have someone landscape your yard, and you are in the 28% tax bracket, the job actually required around $1,400 of before-tax income. Getting out the shovel and doing it yourself is like adding $400 to your yearly income, let alone saving the $1,000. (To save money by managing your own investments, read The Indiana Jones Guide To Getting Ahead and Economic Indicators For The Do-It-Yourself Investor.)

Conclusion
The Scottish aren’t the well-known spendthrifts they used to be. However, the work of Scots during the industrial revolution still stands as one of the greatest leaps forward by a country and its people. All that hard work would have meant nothing if it wasn’t enforced by frugality.

You don’t need to feast on haggis or wear a kilt, but if you bring some old-time Scottish frugality to your own budget, you might find you’re pleased enough to at least try the haggis.

To begin your new tight-fisted life, check out Fifteen Insurance Policies You Don’t Need.

by Andrew Beattie (Contact Author | Biography)

Andrew Beattie is a freelance writer and self-educated investor. He worked for Investopedia as an editor and staff writer before moving to Japan in 2003. Andrew still lives in Japan with his wife, Rie. Since leaving investopedia, he has continued to study and write about the financial world’s tics and charms. Although his interests have been necessarily broad while learning and writing at the same time, perennial favorites include economic history, index funds, Warren Buffett and personal finance. He may also be the only financial writer who can claim to have read “The Encyclopedia of Business and Finance” cover to cover.

http://www.investopedia.com/articles/pf/07/scottish_frugality.asp 

FAVORIT

Grill serpenyő


6.990 Ft
/ Ár :
IKEA FAMILY  Family ár
Vedd meg a legközelebbi IKEA áruházban az árak áruházanként különbözhetnek választás BUDAÖRS BUDAPEST Termék információ Jellemzők Minden főzőlapon jól használható, beleértve az indukciós főzőlapot is.
Fémből készült; sütőben is biztonsággal használható.
A vastag fal egyenletesen oszlatja el a hőt, így az étel több irányból melegszik.
A vastag alap megvédi az ételt a leégéstől, és attól, hogy az edényhez ragadjanak.
Öntöttvasból készült; magas és egyenletes hőeloszlás, az alj étvágygerjesztő grill nyomokat hagy az ételen.
Zománcozott, matt belső; a serpenyőt nem kell olajozni és könnyű ápolni.
A két fogó megkönnyíti a serpenyő megemelését.
tervező: IKEA of Sweden/Halskov/Dalsgaard Termék méretek Hosszúság: 28 cm
Szélesség: 28 cm
Magasság: 4.5 cm

Saturday, March 01, 2008

So I know this is kind of sick but one thing I really like to do is screw around with car salesmen. Like I’ll be bored or something or just driving up the highway and I’ll see a car lot and I’ll say to myself, Jobso, it’s go time. I do this a lot. I know. It’s fucking evil and I’m wasting their time. What can I tell you? It’s so easy. I mean they’re just sitting there waiting for you to come in and fuck with them.

Little example. Yesterday I’m driving past Stevens Creek Toyota in San Jose and I can’t resist. It’s lunchtime, I’ve just smoked just a tiny bit of weed in my car and I don’t have any appointments until three. So in I go, trying to look a bit lost and daffy, like a bleeding swimmer drifting into a pool of sharks, and boom — like that, a dude named Hassan is all over me.

I tell him I’m looking for a used minivan. He sits me down and we go through his list of what he’s got on the lot and we settle on a 1999 Sienna with a hundred and forty-five thousand miles. Now here’s what’s amazing. The guy is so hungry for a sale that he doesn’t think to wonder why a guy who just drove up in a five hundred thousand dollar Mercedes SLR McLaren Roadster is shopping for a shitbox minivan. He also has no idea who I am. I mean he takes my license and makes a copy of it and calls me Mr. Jobs but still has no idea. I mean it’s clear he has no idea. The reason? I’m not in uniform. I’m wearing a baseball cap and a white Oxford shirt. This always works. It’s amazing.


So the thing is, I love to meet car salesmen and hear their rap. They’ve all got a rap and this huge long list of tricks and I have to admit they never cease to entertain and amuse me. So we get into the shitvan and start driving and Hassan’s rap is to ask me all about my needs as a consumer and then start telling me why this is such an amazing van and perfect for me and using all these little linguistic tricks to make it seem like I already own the van. I tell him I’m a single guy but I just adopted a set of septuplets from Finland (I pronounce it “Findland” to see if he’ll notice; he doesn’t) and I need a vehicle that can hold all the kids plus my grandmother who’s going to be taking care of the kids while I’m at work, and she’s a hundred and two years old but still really spry though she’s also in a wheelchair so we’ll need to have the van retrofitted with a handicap lift and will that be possible?

Of course of course of course, Hassan says, that’s no problem we do that all the time and these vans are the best in fact I think the older models are even better than the new ones because they get the better mileage and this is exactly the right one for you I mean I could sell you a newer one but why do you need that? Why? The kids are going to spill stuff and why mess up a new van?

Plus there’s the lift, I say. He goes, That’s right that’s right the lift. And the kids being from Findland, I say, see they’ve never actually been in any kind of vehicle over there so I want something that can make them comfortable and we’ll need a set of seven car seats can you provide those? Of course of course of course, he says.

So I’m driving and he’s saying how nice the ride is and how smooth the engine sounds and I wait until he pauses and I go, Hassan, you know what? This van is shit. He goes, What? I go, This van is shit. It’s a fucking piece of shit. You know it and I know it. Come on. Admit it. Be honest. This is a fucking big piece of shit. It’s a shit van. The engine sucks, the brakes are shot, the radio doesn’t even work. He’s like, No, it does! and he turns on the radio to prove it. I go, No, that radio is fucked up. It’s missing stations. It’s got a weak antenna. Or maybe no antenna. They probably broke the antenna, the previous owners. He says no that can’t be true but even if it is they will definitely put in a new antenna if one is needed. I’m like, Okay, take out a piece of paper and a pen and start making a list. New antenna —

He goes, If it needs one.

I’m like Hassan, do I look like a bitch? Then stop trying to fuck me like a bitch! This piece of shit van fucking needs a new antenna Hassan so put a fucking antenna on the list. New antenna. New wheels. New brakes. I want disk brakes all around. If it’s got drum brakes in back I want them changed over to disk brakes. And new rotors. You fucking understand me? Do I need to start smashing into other cars to prove this to you?

But here’s the creepy thing: I say all this stuff in a totally psycho monotone voice, staring straight ahead, clutching the wheel with both hands, and looking like at any minute I’m going to cross the center line and smash into an oncoming car.

He sits there and doesn’t speak. He doesn’t move. I go, Hassan, start making that fucking list right now. He does, and then he says, in a very soft voice, Could you turn here and head back to the lot please?

We go back. I hop out and turn all bright and cheery. I go, Dude, I love that van. Let’s go inside and talk price. Amazingly enough, he does it. We go inside. He says he has to go get the price from his manager. He comes back with a piece of paper and a number on it: $10,995. I take the paper and look at it. I mean I really stare at it. Then I take it and very calmly tear it in half, then in quarters, then in eighths. I tear it until it’s shredded and then I sprinkle the pieces on his desk. I look at him. He looks at me. I nod toward his manager. He goes off for another number.

He comes back and the number is $10,595. I take out a lighter and set the paper on fire and drop it in his wastebasket. That freaks him out and the rest of the idiots too — funny but fire really has this primal effect on people, which is why magicians like to use it — and they all come running over and the manager says I really need to calm down and stop doing stuff like this. But here’s the amazing thing. They still want to sell me a car.

The manager goes, How much do you want to pay for the van? Tell me your number. I tell him I’ve seen the exact same van with less miles on it at another Toyota dealer and they only want nine hundred bucks. If he can beat that price, I’ll take it. The guy just laughs. I laugh back, and I do this really deranged intentionally fake weirdo Frank Booth kind of laugh, like the laugh that Hillary uses in a debate when someone really bitch-slaps her with a tough question about her tax returns.

The manager goes into the whole rap about how the dealership needs to make money and they paid a lot of money for this van and he says but since it’s the last day of the month and they need to move cars he can go check with his manager and come back to me, and sure enough a few minutes later he comes b
ack with yet another piece of paper and before he hands it to me he makes me promise not to set it on fire and then he gives it to me and it says $9,995 and he says this is his rock bottom absolute best price. I go, That’s with the wheelchair lift right? He’s like, The what? I tell him that Hassan promised me they would install a wheelchair lift in the van for my one-hundred-and-two-year-old wheelchair-bound grandmother plus throw in seven car seats for the septuplets from Findland.

The manager gets all pissed but Hassan denies making any such promise. I say, No no no, you absolutely promised, and here’s the list on my piece of paper where he wrote down all the stuff he was going to throw in for free. Hassan is freaking out and denying up and down.

The manager says his price is just for the van and any extras will have to be negotiated separately. So I hand the paper back to him and I reach out like I’m going to shake his hand. But instead I go, Hey, pull my finger. He does. I fart. Then I thank him for an enjoyable forty-five minutes and walk out to my half million dollar Mercedes and drive away.

Posted by Steve at 10:15 AM  

http://fakesteve.blogspot.com/2008/03/confession-i-love-to-fuck-with-car.html 

• MOL-Chef Zsolt Hernádi im profil-Interview

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Zsolt Hernádi, Chef des ungarischen Energieunternehmens MOL, bricht sein Schweigen: seine Enttäuschung von OMV-General Ruttenstorfer, seine Expansionspläne in Österreich.

profil: Sie sprechen ausgezeichnet Deutsch. Das haben Sie nicht nur im Urlaub in Österreich gelernt, nehme ich an?
Hernádi: Ich habe es an der Schule gelernt, aber große Fortschritte habe ich erst gemacht, als ich vor vielen Jahren eine Freundin aus Berlin hatte. Aber ich bin in der Tat auch gern in Österreich, erst im Januar war ich mit der Familie auf Skiurlaub.

profil: Hat sich Ihr Verhältnis zu Österreich im letzten halben Jahr verändert?
Hernádi: Nein, ganz bestimmt nicht! Allerdings glaube ich, dass mein Familienname jetzt in Österreich etwas bekannter ist als vorher.

profil: Am 1. April haben Sie die erste MOL-Tankstelle in Österreich eröffnet. War das ein einmaliger Aprilstreich, oder kommt da noch mehr?
Hernádi: Im österreichischen Großhandel sind wir ja bereits sehr stark. Bei den Tankstellen war das nur der erste Streich. Wir werden bis Ende des Jahres 70 MOL-Tankstellen in Österreich eröffnen, bis 2010 mindestens 100. Wir werden sowohl zukaufen als auch einige neu bauen.

profil: Dürfen die Konsumenten auf billigeren Sprit hoffen?
Hernádi: Wir werden den Kunden ein Gesamtangebot machen, das ihnen gefallen wird.

profil: Ihre Tankstellen sind vor Kurzem vom MOL-Rot auf Grün umgefärbt worden und nähern sich damit den OMV-Farben an. Wollen Sie sich etwa doch auf einen Zusammenschluss vorbereiten?
Hernádi: Aber nein, unsere Tankstellen hatten schon immer Grün dabei. Und unser Grün ist ein viel wärmeres als das der OMV! Außerdem hat die OMV auch Blau im Design, und das ist eine kalte Farbe.

profil: Ich nehme an, Sie wollen mir damit sagen, dass Sie auch das freundlichere Unternehmen leiten. Die OMV betont doch aber stets, dass sie mit einem „freundlichen“ Kooperationsangebot an Sie herangetreten sei …
Hernádi: Natürlich kann man Freundschaft im Mund führen, aber die harten Fakten sprechen eine andere Sprache. Schon 2000 hat die OMV in einem Handstreich zehn Prozent MOL-Aktien gekauft, obwohl sie uns in einem solchen Fall vorher Bescheid geben wollte. Wir haben gesagt: Okay, das war vielleicht ein Missverständnis. Bis 2007 haben wir dann verschiedene Kooperationen in einzelnen Geschäftsbereichen geplant, wir haben sogar gemeinsam an Ausschreibungen teilgenommen. Aber im Juni 2007 hat die OMV plötzlich wieder ohne Absprache ihr Aktienpaket erhöht und uns einen Brief mit dem so genannten Annäherungsversuch geschickt. Unser Vorstand hat das klar und einstimmig abgelehnt.

profil: Wie haben Sie persönlich auf das Angebot reagiert?
Hernádi: Ich kenne OMV-Chef Ruttenstorfer seit 2000, wir sind gute geschäftliche Partner und Konkurrenten gewesen. Das war wirklich eine runde Beziehung. Er kannte die Philosophie und die Werte der MOL sehr genau. Und trotzdem hat er diesen Versuch gemacht. Natürlich bin ich menschlich enttäuscht von Ruttenstorfer. Er hätte wissen müssen, dass das für uns nicht infrage kommt.

profil: Wenn Sie die OMV hätten beraten können – hätte es einen Weg gegeben, die Herzen der Ungarn zu erobern?
Hernádi: Muss man unbedingt irgendjemand erobern? Man muss sich doch als Manager viel eher fragen, wie man zusätzlichen Wert schaffen kann. Ein Zusammenschluss zwischen MOL und OMV bringt ein wenig mehr Größe, aber keinen Mehrwert. Wir müssten einige Teile von Geschäftsbereichen verkaufen, um keine Schwierigkeiten mit der Wettbewerbsbehörde zu bekommen. Das wäre in Deutschland, Serbien oder Italien zum Beispiel anders.

profil: Das heißt, Partner aus Deutschland wären Ihnen willkommener als die Österreicher?
Hernádi: Richtige Partnerschaften sind uns immer willkommen. Aber wir wollen heute nicht fusionieren. Mit niemandem.

profil: Sie sollen einmal gesagt haben, dass Ihnen die Russen lieber wären als die Österreicher.
Hernádi: Ich habe nur die Synergien betrachtet. Es gibt wenige Gesellschaften, mit denen wir weniger Synergien erzielen können als mit der OMV, egal, woher sie kommen. Mit der OMV bestehen starke Positionen auf überlappenden Märkten. Wir sind seit 2007 die effizienteste Energiegesellschaft in ganz Europa. Was sollten wir von der OMV lernen können? Eigentlich läuft es immer so, dass die effektivere Gesellschaft die weniger effektive übernimmt. Die MOL müsste die OMV übernehmen – wenn überhaupt. Aber das haben wir natürlich nicht vor, weil es nicht möglich ist und dieselben wettbewerbsrechtlichen Probleme hervorrufen würde.

profil: Wenn eine Fusion so offensichtlich keinen Sinn macht, wieso lassen Sie nicht die Aktionäre entscheiden?
Hernádi: Wir lassen die Aktionäre entscheiden – es gibt allerdings nichts, wor­über sie entscheiden könnten. Es gibt kein gültiges Übernahmeangebot der OMV. Sie sagen nur, dass sie MOL gern übernehmen würden, wenn die Statuten völlig anders wären.

profil: Auch wenn Sie effizienter sein mögen – die besseren Jahreszahlen 2007 hatte die OMV. Bei Ihnen ist der Gewinn gegenüber dem Vorjahr um 23 Prozent eingebrochen.
Hernádi: Das Vorjahr ist keine gute Vergleichsbasis für uns. 2006 hatten wir durch einen Einmaleffekt aus dem Verkauf von Teilen unseres Gasgeschäfts einen besonders hohen Gewinn. Rechnet man den korrekterweise heraus, haben wir 2007 hervorragende Zahlen.

profil: Sie haben bisher sehr geschickt die nationalen Gefühle der Ungarn benutzt, um Stimmung gegen die Österreicher zu machen.
Hernádi: Ich will keine Rechnung aufmachen, wer nationalistischer ist. Aber: Erinnern Sie sich, wie österreichische Politiker reagiert haben, als ein Stahlunternehmen von einem amerikanischen Fonds übernommen werden sollte?

profil: Sie meinen Böhler-Uddeholm. Damals war von einer „nationalen Katastrophe“ die Rede …
Hernádi: 1960 war nur ein Prozent der Ölreserven in Staatshand, heute sind es 65 Prozent. Es ist ein Faktum, dass man im Energiegeschäft mit Politik zu tun hat. Die Politiker wollen heutzutage bei Energiedeals mitreden.

profil: Warum ist es denn so wichtig, dass MOL in ungarischer Hand bleibt?
Hernádi: Sieht man sich die Eigentümerstruktur an, ist MOL längst nicht mehr in ungarischer Hand. Allerdings braucht jede Gesellschaft nationale Champions, die eine Vorreiterrolle im Land übernehmen. Nach dem Zusammenbruch des Kommunismus haben viele ausländische Unternehmen hier investiert. Ungarn hat nur dre
i große aus Ungarn geführte Unternehmen – MOL ist das größte davon. Außerdem: Es ist sehr leicht, aus einer Position heraus zu meckern, wenn man selbst nicht zu haben ist. Die OMV ist unter staatlicher Kontrolle und wirft den anderen vor, dass sie dem freien Markt nicht entsprechen. Die Doppelzüngigkeit der OMV ist nicht akzeptabel.

profil: Sie kreiden der OMV an, dass bei ihr der österreichische Staat beteiligt ist. Doch vor Kurzem haben Sie ein großes Aktienpaket an die Oman Oil Company verkauft. Die steht nicht nur zu einem Teil, sondern zu 100 Prozent in staatlichem Eigentum.
Hernádi: Oman hat nie gesagt, dass sie MOL übernehmen wollen. Außerdem bezieht sich die Partnerschaft auf bestimmte Anlagevermögen, es gibt klare Synergien.

profil: Medienberichte rechnen die OOC-Anteile Ihrem Einflussbereich zu – insgesamt sollen Sie mithilfe von Aktienverleih-Konstrukten 40 Prozent kontrollieren, um die Übernahme abzuwehren.
Hernádi: Das stimmt nicht. Wir haben einige Aktienpakete verliehen, aber die Stimmrechte sind an die jeweiligen Institute übergegangen. Es gibt keine Abstimmungsvereinbarungen. Wir halten uns an das ungarische Aktiengesetz, in dem Aktienverleih-Konstrukte klar geregelt sind.

profil: Die Kosten für diesen Kauf eigener Aktien sollen mehr als eine Milliarde Euro betragen. Wo ist der Vorteil für Ihre Aktionäre?
Hernádi: Eine bessere Kapitalstruktur nützt dem Unternehmen und den Aktionären. Die Wertpapierleihverträge garantieren, dass die ökonomischen Vorteile aus der Dividende dem Ausleiher und dadurch
im Endeffekt den Aktionären zugute­kommen.

profil: Welchen Vorteil hätten dann die Unternehmen, die die Aktien ausleihen? Bekommen sie einen Teil der Dividende?
Hernádi: Die genaue Ausgestaltung dieser beiden unterschiedlichen Leihverträge möchte ich nicht kommentieren. Es ist unsere Aufgabe, Wert zu liefern. Und das garantieren wir. Die OMV will die Aktiengeschäfte noch einmal prüfen lassen. Wir haben nichts dagegen. Die Hauptversammlung wird das entscheiden.

profil: Hätten Sie das Geld nicht besser anders angelegt?
Hernádi: Wie viele andere Energieunternehmen hatten wir zu viel Cash. Das kann man natürlich als Dividende auszahlen, wenn man nicht an ein Wachstumspotenzial des Unternehmens glaubt. Man kann auch die Aktien zurückkaufen und dann löschen – das hat den gleichen Effekt für den Aktionär, weil dadurch der Wert der Einzelaktie steigt. Wir haben entschieden, dass wir unsere Aktien kaufen, um dann flexibel entscheiden zu können, ob wir bei Geschäften mit Aktien zahlen oder ob wir sie letztendlich löschen werden. Das Geschäft mit dem tschechischen Stromkonzern CEZ und Oman Oil haben wir mit diesen Aktien bezahlt und wurden dafür an deren Geschäft beteiligt. Ich kann Ihnen eine ganze Liste von Energieunternehmen schicken, die im vergangenen Jahr überschüssiges Cash in eigene Aktien in­vestiert haben.

profil: Die Leihkonstrukte machen eher den Eindruck, dass sich die MOL mit Händen und Füßen gegen die OMV wehren will.
Hernádi: In Österreich wird jede Handlung der MOL im Licht der OMV gesehen. Und es ist ein Angriff um jeden Preis. Aber wir verfolgen unsere eigene Strategie. Wir haben in Norditalien zugekauft und in Kroatien – es ist doch Quatsch zu sagen, das wäre alles Abwehrstrategie. Wir haben im Haus ein kleines Team, das sich mit dem Angebot der OMV beschäftigt. Aber ich habe anderes zu tun, als mich pausenlos um die OMV zu kümmern.

profil: In der Hauptversammlung wollen Sie sich erlauben lassen, statt bisher zehn jetzt 25 Prozent Aktien rückkaufen zu
können. Damit schaffen Sie sich ein gutes Polster gegen Übernahmen.
Hernádi: Es gibt einen gewissen Aktienbesitzer, der mehr als 20 Prozent hält. Zum Zeitpunkt, an dem die OMV aufgibt und rausgeht, müssen wir unsere Anleger vor einem Kurssturz schützen.

profil: Im Abwehrkampf springt Ihnen die ungarische Regierung mit der so genannten „Lex MOL“ bei.
Hernádi: Gibt es einen einzigen Punkt in diesem Gesetz, der sich auf MOL bezieht?

profil: Es muss nicht explizit MOL erwähnt werden, um Ihnen zu nutzen.
Hernádi: Wir haben dieses Gesetz nicht veranlasst. Es hat einen makroökonomischen Hintergrund. Ungarn hatte bisher ein ultraliberales Übernahmegesetz, das dazu führte, dass zahlreiche Firmen an der Budapester Börse denotiert haben, weil sie übernommen wurden. Jetzt soll es nach dem Willen der Regierung ein neutrales Gesetz geben.

profil: Neutral? Die EU hat ein Vertragsverletzungsverfahren eingeleitet.
Hernádi: Nein, sie hat Ungarn schriftlich um Information gebeten und dabei aus den vielen Paragrafen zwei Details beanstandet. Juristen sagen mir, dass das Gesetz nichts Ungewöhnliches in der EU ist, in Dänemark oder sogar in Österreich ist es ganz ähnlich ausgestaltet.

profil: Mehr als unüblich ist beispielsweise, dass die Hauptversammlung des bietenden Unternehmens vorab den genauen Geschäftsentwicklungsplan für die Übernahme genehmigen muss. Das gibt den Verteidigern einen riesigen Vorsprung, um Abwehrmaßnahmen einzuleiten.
Hernádi: Die Regelung gilt nur für die strategisch wichtigen Unternehmen. Die Regierung will wissen, ob die Aktionäre dahinterstehen oder ob es nur eine verquere Idee des Vorstandsvorsitzenden ist. Das soll vorkommen. Natürlich ist dadurch der Überraschungseffekt weg. In der sensiblen Energiebranche ist noch kein einziges Mal eine feindliche Übernahme geglückt. In der Regel gibt es also sowieso keine Überraschungen.

profil: Warum haben Sie die Tagesordnungspunkte abgewiesen, die die OMV für die Hauptversammlung am 23. April vorgeschlagen hat?
Hernádi: Weil zwei der drei Vorschläge den ungarischen Gesetzen widersprechen. Der OMV geht es darum, Wirbel zu machen.

profil: Sie versuchen, mit anderen Projekten fernab der OMV Wirbel zu machen. Wie realistisch ist Ihr Projekt, die Gas­pipelines in Zentral- und Osteuropa in einer Gesellschaft zusammenzulegen?
Hernádi: Wir haben diesen Vorschlag in sieben Ländern unterbreitet, und alle sind dem gegenüber positiv eingestellt – wir hoffen, dass Österreich keine Ausnahme wird.

profil: Es ist unüblich, dass sich Energieunternehmen von selbst dazu verpflichten, ihre Infrastruktur auszugliedern.
Hernádi: Wir stellen uns damit auf das von der EU geforderte Unbundling ein. Wir wurden vor drei Jahren aus wettbewerbsrechtlichen Gründen gezwungen, unser Pipeline-Netz auszugliedern. Inzwischen haben wir aber die Vorteile des Unbundling kennen gelernt. Um erfolgreich zu sein, muss man den anderen voraus sein. Mit dieser Idee haben wir die Nase vorn.

profil: Wenn es so gut um das Projekt steht – wann wird es umgesetzt?
Hernádi: Das ist heute ein Traum. Und bei einem Traum kann man nicht sagen, wann er Wirklichkeit wird.

profil: So ähnlich wie bei der europäischen Pipeline Nabucco?
Hernádi: Bei Nabucco gibt es bereits ein Konsortium. Aber das Management von Nabucco spricht zu viel und tut zu wenig.

profil: Wollen Sie etwa die Federführung der OMV loswerden?
Hernádi: Nicht das wollte ich sagen. Es braucht nur mehr Power dahinter. Auch von politischer Seite. Es reicht nicht, dass die EU sagt, es handle sich um das wichtigste Projekt, man muss auch entsprechend handeln. Nur gemeinsam haben wir die notwendige Verhandlungsmacht. Wir haben noch immer keine einzige fixe Zusage für Gas.

profil: Woher soll das Gas kommen? Aus dem Iran?
Hernádi: Wir müssen mit Amerika über den Iran sprechen. Dazu kommt aber, dass wir nicht wissen, wie viel Gas im Iran ist und wie viel es wirklich kostet, es zu fördern und über die weite Strecke innerhalb des Iran zu transportieren. Um an turkmenisches Gas zu kommen, müssen wir
mit den Russen sprechen. Die Turkmenen werden nicht gegen den Willen der Russen handeln.

profil: Das heißt, wir sind auf die Russen angewiesen?
Hernádi: Es ist eine Illusion zu glauben, dass Nabucco uns von Russland völlig unabhängig macht. Wir brauchen die Russen weiterhin als Partner, nicht als Feind.

profil: Ungarn hat sich mit der Unterzeichnung des Vertrags zur Nabucco-Konkurrenz-Pipeline South Stream den russischen Interessen gebeugt.
Hernádi: In Ungarn heizen 90 Prozent der Bevölkerung mit Gas. Ungarn konnte das russische Angebot nicht zurückweisen. Es ist verständlich, dass die Regierung jede Möglichkeit nutzt, um die Versorgungssicherheit zu erhöhen und das Transitrisiko zu mindern.

profil: Sind zwei Pipelines nicht eine zu viel?
Hernádi: Das ist Verhandlungssache. Oft laufen sechs oder acht Pipelines nebeneinander, um das Volumen zu transportieren. Es ist vorstellbar, dass in diesem Fall die Pipelines verschiedenen Eigentümern ge­hören.

profil: Das russische Ölunternehmen Luk­oil hat jüngst gesagt, dass der Höhepunkt der russischen Ölförderung überschritten sei. Müssen wir uns Sorgen machen?
Hernádi: Nein. Allerdings muss Russland mehr Anreize für Unternehmen schaffen, in die Erforschung von Reserven zu inves­tieren. Das passiert derzeit nicht. Es gibt genug Reserven, es wird nur immer teurer, sie zu fördern.

profil: Ein sinkender Ölpreis ist also nicht in Sicht?
Hernádi: Nein. Die Nachfrage wird steigen – zu zwei Dritteln kommt der Mehrbedarf aus China und Indien. Die einzige Chance ist es, dass die Länder mit großen Reserven mehr in Forschung investieren, damit das Angebot steigt. Wenn sie das nicht tun, wird es richtig teuer.

Von Andrea Rexer

http://www.news.at/profil/index.html?/articles/0816/560/203614.shtml 

munkahelyi stressz ellen

http://xkcd.com/388/

By Chris Anderson 02.25.08 | 12:00 AM FEATURE Webmail Windfall How Can Air Travel Be Free? How Can a CD Be Free? How Can a DVR Be Free? How Can Directory Assitance Be Free? How-To Wiki How To Make Money Around Free Content The March 2008 “issue for free” offer is now closed.

At the age of 40, King Gillette was a frustrated inventor, a bitter anticapitalist, and a salesman of cork-lined bottle caps. It was 1895, and despite ideas, energy, and wealthy parents, he had little to show for his work. He blamed the evils of market competition. Indeed, the previous year he had published a book, The Human Drift, which argued that all industry should be taken over by a single corporation owned by the public and that millions of Americans should live in a giant city called Metropolis powered by Niagara Falls. His boss at the bottle cap company, meanwhile, had just one piece of advice: Invent something people use and throw away.

One day, while he was shaving with a straight razor that was so worn it could no longer be sharpened, the idea came to him. What if the blade could be made of a thin metal strip? Rather than spending time maintaining the blades, men could simply discard them when they became dull. A few years of metallurgy experimentation later, the disposable-blade safety razor was born. But it didn’t take off immediately. In its first year, 1903, Gillette sold a total of 51 razors and 168 blades. Over the next two decades, he tried every marketing gimmick he could think of. He put his own face on the package, making him both legendary and, some people believed, fictional. He sold millions of razors to the Army at a steep discount, hoping the habits soldiers developed at war would carry over to peacetime. He sold razors in bulk to banks so they could give them away with new deposits (“shave and s
ave” campaigns). Razors were bundled with everything from Wrigley’s gum to packets of coffee, tea, spices, and marshmallows. The freebies helped to sell those products, but the tactic helped Gillette even more. By giving away the razors, which were useless by themselves, he was creating demand for disposable blades. A few billion blades later, this business model is now the foundation of entire industries: Give away the cell phone, sell the monthly plan; make the videogame console cheap and sell expensive games; install fancy coffeemakers in offices at no charge so you can sell managers expensive coffee sachets.

Chris Anderson discusses “Free.”

Video produced by Annaliza Savage and edited by Michael Lennon.

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)

You know this freaky land of free as the Web. A decade and a half into the great online experiment, the last debates over free versus pay online are ending. In 2007 The New York Times went free; this year, so will much of The Wall Street Journal. (The remaining fee-based parts, new owner Rupert Murdoch announced, will be “really special … and, sorry to tell you, probably more expensive.” This calls to mind one version of Stewart Brand’s original aphorism from 1984: “Information wants to be free. Information also wants to be expensive … That tension will not go away.”)

Scenario 1: Low-cost digital distribution will make the summer blockbuster free. Theaters will make their money from concessions — and by selling the premium moviegoing experience at a high price.

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

The rise of “freeconomics” is being driven by the underlying technologies that power the Web. Just as Moore’s law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.

But tell that to the poor CIO who just shelled out six figures to buy another rack of servers. Technology sure doesn’t feel free when you’re buying it by the gross. Yet if you look at it from the other side of the fat pipe, the economics change. That expensive bank of hard drives (fixed costs) can serve tens of thousands of users (marginal costs). The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable. It’s not about the cost of the equipment in the racks at the data center; it’s about what that equipment can do. And every year, like some sort of magic clockwork, it does more and more for less and less, bringing the marginal costs of technology in the units that we individuals consume closer to zero.

Photo Illustration: Jeff Mermelstein

As much as we complain about how expensive things are getting, we’re surrounded by forces that are making them cheaper. Forty years ago, the principal nutritional problem in America was hunger; now it’s obesity, for which we have the Green Revolution to thank. Forty years ago, charity was dominated by clothing drives for the poor. Now you can get a T-shirt for less than the price of a cup of coffee, thanks to China and global sourcing. So too for toys, gadgets, and commodities of every sort. Even cocaine has pretty much never been cheaper (globalization works in mysterious ways).

Digital technology benefits from these dynamics and from something else even more powerful: the 20th-century shift from Newtonian to quantum machines. We’re still just beginning to exploit atomic-scale effects in revolutionary new materials — semiconductors (processing power), ferromagnetic compounds (storage), and fiber optics (bandwidth). In the arc of history, all three substances are still new, and we have a lot to learn about them. We are just a few decades into the discovery of a new world.

What does this mean for the notion of free? Well, just take one example. Last year, Yahoo announced that Yahoo Mail, its free webmail service, would provide unlimited storage. Just in case that wasn’t totally clear, that’s “unlimited” as in “infinite.” So the market price of online storage, at least for email, has now fallen to zero (see “Webmail Windfall”). And the stunning thing is that nobody was surprised; many had assumed infinite free storage was already the case.

For good reason: It’s now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned. Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There’s never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.

One of the old jokes from the late-’90s bubble was that there are only two numbers on the Internet: infinity and zero. The first, at least as it applied to stock market valuations, proved false. But the second is alive and well. The Web has become the land of the free.

The result is that we now have not one but two trends driving the spread of free business models across the economy. The first is the extension of King Gillette’s cross-subsidy to more and more industries. Technology is giving companies greater flexibility in how broadly they can define their markets, allowing them more freedom to give away products or services to one set of customers while selling to another set. Ryanair, for instance, has disrupted its industry by defining itself more as a full-service travel agency than a seller of airline seats (see “How Can Air Travel Be Free?”).

The second trend is simply that anything that touches digital networks quickly feels the effect of falling costs. There’s nothing new about technology’s deflationary force, but what is new is the speed at which industries of all sorts are becoming digital businesses and thus able to exploit those economics. When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper). So, too, for everything from banking to gambling. The moment a company’s primary expenses
become things based in silicon, free becomes not just an option but the inevitable destination.

WASTE AND WASTE AGAIN
Forty years ago, Caltech professor Carver Mead identified the corollary to Moore’s law of ever-increasing computing power. Every 18 months, Mead observed, the price of a transistor would halve. And so it did, going from tens of dollars in the 1960s to approximately 0.000001 cent today for each of the transistors in Intel’s latest quad-core. This, Mead realized, meant that we should start to “waste” transistors.

Scenario 2: Ads on the subway? That’s so 20th century. By sponsoring the whole line and making trips free, the local merchants association brings grateful commuters to neighborhood shops.

Waste is a dirty word, and that was especially true in the IT world of the 1970s. An entire generation of computer professionals had been taught that their job was to dole out expensive computer resources sparingly. In the glass-walled facilities of the mainframe era, these systems operators exercised their power by choosing whose programs should be allowed to run on the costly computing machines. Their role was to conserve transistors, and they not only decided what was worthy but also encouraged programmers to make the most economical use of their computer time. As a result, early developers devoted as much code as possible to running their core algorithms efficiently and gave little thought to user interface. This was the era of the command line, and the only conceivable reason someone might have wanted to use a computer at home was to organize recipe files. In fact, the world’s first personal computer, a stylish kitchen appliance offered by Honeywell in 1969, came with integrated counter space.

Photo Illustration: Jeff Mermelstein

And here was Mead, telling programmers to embrace waste. They scratched their heads — how do you waste computer power? It took Alan Kay, an engineer working at Xerox’s Palo Alto Research Center, to show them. Rather than conserve transistors for core processing functions, he developed a computer concept — the Dynabook — that would frivolously deploy silicon to do silly things: draw icons, windows, pointers, and even animations on the screen. The purpose of this profligate eye candy? Ease of use for regular folks, including children. Kay’s work on the graphical user interface became the inspiration for the Xerox Alto, and then the Apple Macintosh, which changed the world by opening computing to the rest of us. (We, in turn, found no shortage of things to do with it; tellingly, organizing recipes was not high on the list.)

Of course, computers were not free then, and they are not free today. But what Mead and Kay understood was that the transistors in them — the atomic units of computation — would become so numerous that on an individual basis, they’d be close enough to costless that they might as well be free. That meant software writers, liberated from worrying about scarce computational resources like memory and CPU cycles, could become more and more ambitious, focusing on higher-order functions such as user interfaces and new markets such as entertainment. And that meant software of broader appeal, which brought in more users, who in turn found even more uses for computers. Thanks to that wasteful throwing of transistors against the wall, the world was changed.

What’s interesting is that transistors (or storage, or bandwidth) don’t have to be completely free to invoke this effect. At a certain point, they’re cheap enough to be safely disregarded. The Greek philosopher Zeno wrestled with this concept in a slightly different context. In Zeno’s dichotomy paradox, you run toward a wall. As you run, you halve the distance to the wall, then halve it again, and so on. But if you continue to subdivide space forever, how can you ever actually reach the wall? (The answer is that you can’t: Once you’re within a few nanometers, atomic repulsion forces become too strong for you to get any closer.)

In economics, the parallel is this: If the unitary cost of technology (“per megabyte” or “per megabit per second” or “per thousand floating-point operations per second”) is halving every 18 months, when does it come close enough to zero to say that you’ve arrived and can safely round down to nothing? The answer: almost always sooner than you think.

What Mead understood is that a psychological switch should flip as things head toward zero. Even though they may never become entirely free, as the price drops there is great advantage to be had in treating them as if they were free. Not too cheap to meter, as Atomic Energy Commission chief Lewis Strauss said in a different context, but too cheap to matter. Indeed, the history of technological innovation has been marked by people spotting such price and performance trends and getting ahead of them.

From the consumer’s perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer. The psychology of “free” is powerful indeed, as any marketer will tell you.

This difference between cheap and free is what venture capitalist Josh Kopelman calls the “penny gap.” People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that’s the difference between a great market and none at all.

The huge psychological gap between “almost zero” and “zero” is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.

Traditionalists wring their hands about the “vaporization of value” and “demonetization” of entire industries. The success of craigslist’s free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That’s about 12 percent of the $326 million by which classified ad revenue declined that year.

But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn’t mean that someone, somewhere, isn’t making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they’re distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.

The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You’re probably experiencing it right now. It’s the basis of virtually all media.

In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is “free to air,” and so is much of television. Likewise, newspaper and magazine publishers don’t charge readers anything close to the actual cost of creating, printing, and distribu
ting their products. They’re not selling papers and magazines to readers, they’re selling readers to advertisers. It’s a three-way market.

In a sense, what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce (see How-To Wiki for a complete list). Now an entire ecosystem of Web companies is growing up around the same set of models.

A TAXONOMY OF FREE
Between new ways companies have found to subsidize products and the falling cost of doing business in a digital age, the opportunities to adopt a free business model of some sort have never been greater. But which one? And how many are there? Probably hundreds, but the priceless economy can be broken down into six broad categories:

· “Freemium”
What’s free: Web software and services, some content. Free to whom: users of the basic version.

This term, coined by venture capitalist Fred Wilson, is the basis of the subscription model of media and is one of the most common Web business models. It can take a range of forms: varying tiers of content, from free to expensive, or a premium “pro” version of some site or software with more features than the free version (think Flickr and the $25-a-year Flickr Pro).

Again, this sounds familiar. Isn’t it just the free sample model found everywhere from perfume counters to street corners? Yes, but with a pretty significant twist. The traditional free sample is the promotional candy bar handout or the diapers mailed to a new mother. Since these samples have real costs, the manufacturer gives away only a tiny quantity — hoping to hook consumers and stimulate demand for many more.

Photo Illustration: Jeff Mermelstein

But for digital products, this ratio of free to paid is reversed. A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest. In the freemium model, that means for every user who pays for the premium version of the site, 99 others get the basic free version. The reason this works is that the cost of serving the 99 percent is close enough to zero to call it nothing.

· Advertising
What’s free: content, services, software, and more. Free to whom: everyone.

Broadcast commercials and print display ads have given way to a blizzard of new Web-based ad formats: Yahoo’s pay-per-pageview banners, Google’s pay-per-click text ads, Amazon’s pay-per-transaction “affiliate ads,” and site sponsorships were just the start. Then came the next wave: paid inclusion in search results, paid listing in information services, and lead generation, where a third party pays for the names of people interested in a certain subject. Now companies are trying everything from product placement (PayPerPost) to pay-per-connection on social networks like Facebook. All of these approaches are based on the principle that free offerings build audiences with distinct interests and expressed needs that advertisers will pay to reach.

· Cross-subsidies
What’s free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.

Scenario 3: It’s a free second-gen Wiii! But only if you buy the deluxe version of Rock Band.

When Wal-Mart charges $15 for a new hit DVD, it’s a loss leader. The company is offering the DVD below cost to lure you into the store, where it hopes to sell you a washing machine at a profit. Expensive wine subsidizes food in a restaurant, and the original “free lunch” was a gratis meal for anyone who ordered at least one beer in San Francisco saloons in the late 1800s. In any package of products and services, from banking to mobile calling plans, the price of each individual component is often determined by psychology, not cost. Your cell phone company may not make money on your monthly minutes — it keeps that fee low because it knows that’s the first thing you look at when picking a carrier — but your monthly voicemail fee is pure profit.

On a busy corner in São Paulo, Brazil, street vendors pitch the latest “tecnobrega” CDs, including one by a hot band called Banda Calypso. Like CDs from most street vendors, these did not come from a record label. But neither are they illicit. They came directly from the band. Calypso distributes masters of its CDs and CD liner art to street vendor networks in towns it plans to tour, with full agreement that the vendors will copy the CDs, sell them, and keep all the money. That’s OK, because selling discs isn’t Calypso’s main source of income. The band is really in the performance business — and business is good. Traveling from town to town this way, preceded by a wave of supercheap CDs, Calypso has filled its shows and paid for a private jet.

The vendors generate literal street cred in each town Calypso visits, and its omnipresence in the urban soundscape means that it gets huge crowds to its rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.

· Zero marginal cost
What’s free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.

This describes nothing so well as online music. Between digital reproduction and peer-to-peer distribution, the real cost of distributing music has truly hit bottom. This is a case where the product has become free because of sheer economic gravity, with or without a business model. That force is so powerful that laws, guilt trips, DRM, and every other barrier to piracy the labels can think of have failed. Some artists give away their music online as a way of marketing concerts, merchandise, licensing, and other paid fare. But others have simply accepted that, for them, music is not a moneymaking business. It’s something they do for other reasons, from fun to creative expression. Which, of course, has always been true for most musicians anyway.

· Labor exchange
What’s free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.

You can get free porn if you solve a few captchas, those scrambled text boxes used to block bots. What you’re actually doing is giving answers to a bot used by spammers to gain access to other sites — which is worth more to them than the bandwidth you’ll consume browsing images. Likewise for rating stories on Digg, voting on Yahoo Answers, or using Google’s 411 service (see “How Can Directory Assistance Be Free?”). In each case, the act of using the service creates something of value, either improving the service itself or creating information that can be useful somewhere else.

· Gift economy
What’s free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.

From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn’t the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact. In a sense, zero-cost distribution has turned sharing into an industry. In the monetary economy it all looks free — indeed, in the monetary economy it looks like unfa
ir competition — but that says more about our shortsighted ways of measuring value than it does about the worth of what’s created.

THE ECONOMICS OF ABUNDANCE
Enabled by the miracle of abundance, digital economics has turned traditional economics upside down. Read your college textbook and it’s likely to define economics as “the social science of choice under scarcity.” The entire field is built on studying trade-offs and how they’re made. Milton Friedman himself reminded us time and time again that “there’s no such thing as a free lunch.

“But Friedman was wrong in two ways. First, a free lunch doesn’t necessarily mean the food is being given away or that you’ll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we’ve seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It’s as if the restaurant suddenly didn’t have to pay any food or labor costs for that lunch.

Surely economics has something to say about that?

It does. The word is externalities, a concept that holds that money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we’ve always known about but have only recently been able to measure properly. The “attention economy” and “reputation economy” are too fuzzy to merit an academic department, but there’s something real at the heart of both. Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.

There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.

FREE CHANGES EVERYTHING
Between digital economics and the wholesale embrace of King’s Gillette’s experiment in price shifting, we are entering an era when free will be seen as the norm, not an anomaly. How big a deal is that? Well, consider this analogy: In 1954, at the dawn of nuclear power, Lewis Strauss, head of the Atomic Energy Commission, promised that we were entering an age when electricity would be “too cheap to meter.” Needless to say, that didn’t happen, mostly because the risks of nuclear energy hugely increased its costs. But what if he’d been right? What if electricity had in fact become virtually free?The answer is that everything electricity touched — which is to say just about everything — would have been transformed. Rather than balance electricity against other energy sources, we’d use electricity for as many things as we could — we’d waste it, in fact, because it would be too cheap to worry about.

All buildings would be electrically heated, never mind the thermal conversion rate. We’d all be driving electric cars (free electricity would be incentive enough to develop the efficient battery technology to store it). Massive desalination plants would turn seawater into all the freshwater anyone could want, irrigating vast inland swaths and turning deserts into fertile acres, many of them making biofuels as a cheaper store of energy than batteries. Relative to free electrons, fossil fuels would be seen as ludicrously expensive and dirty, and so carbon emissions would plummet. The phrase “global warming” would have never entered the language.

Today it’s digital technologies, not electricity, that have become too cheap to meter. It took decades to shake off the assumption that computing was supposed to be rationed for the few, and we’re only now starting to liberate bandwidth and storage from the same poverty of imagination. But a generation raised on the free Web is coming of age, and they will find entirely new ways to embrace waste, transforming the world in the process. Because free is what you want — and free, increasingly, is what you’re going to get.

Chris Anderson (canderson@wired.com) is the editor in chief of Wired and author of The Long Tail. His next book, FREE, will be published in 2009 by Hyperion.