I had a long talk yesterday with a good friend at the back end of a bad business experience. Call it recession-related, banking, credit cards and a website that might be valuable someday–good information, nice interface–but was taking too long.

We had a talk about web apps, trends and the long-term problem of free. My friend is safe, thanks; he’ll be fine while what he’s been working on falls apart through no fault of his own.

But free? Are you ready for free? If you’re looking at a web business or information or expert business, you’ll probably have to deal with this. People on the web–you included–expect free.

Unless you’ve been hiding under a rock, you already know about the dustup between Malcolm Gladwell, Chris Anderson and Seth Godin . . .

Anderson’s book, FREE, came out a few weeks back, arguing in part that the distribution costs of any intellectual property that can be boiled down to digital format, be it a song, a book, a video or a game, have become so low that you should essentially round down to zero and accept that if you don’t make it available for free, someone else will.

So, rather than fight it, just suck it up and give it all away.

That’s from a post on Jonathon Fields’ blog: Why I Hope the Free Brigade Got It Wrong. He adds:

Because if the Free Brigade are right, if we who create information, performances, music, writings, recordings and any other electronic “commoditized” form of our work are required to give our creations away whenever they appear in digital form, that effectively shuts down one of the most powerful and lucrative ways to scale a small business built around creative or strategic output.

Which brings me back to my conversation with my friend from the besieged website. Somebody has to make payroll.

Tim BerryTim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.