• Wall Street Journal , Monday, February 2, 2009 11:30 AM

Wired editor-in-chief Chris Anderson, who last made a splash in book publishing with The Long Tail, gives a sneak peek a at his new book, Free, which will be published this summer. The Web is a consumer's paradise, he says. It's the biggest store in history and everything is 100% off.

Free can be a good business, he says, if you can get enough customers to pay for premium content to subsidize the majority who take the ride gratis. "Sometimes that's two different sets of customers, as in the traditional media model: A few advertisers pay for content so lots of consumers can get it cheap or free," he writes.

But the rules are changing since the economy started to really tank way back in September. Startups can no longer rely on bigger companies to just buy them out once they've attracted a sufficient audience. They are "having to do the unthinkable,' he says, and develop business models that actually make money from the outset.

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