My docs online switches from free to fee

If you're one of the few Web surfers still looking for free stuff online, you will no longer find it at My Docs. The three-year-old Web storage company has discontinued its free service, switching entirely to a paid model.

My Docs Online Inc. customers must now pay US$9.95 per quarter for the premium service, which provides 50MB of storage space instead of 20MB. It also includes a Public Folders feature, which lets you share your files with other surfers; and a wireless feature, through which you can access and e-mail files from any Internet-connected wireless device.

My Docs is not alone in making the move to a paid model. Many of its one-time competitors have already begun charging for Web storage. Driveway Corp., one of the most popular online storage services, discontinued its free service in March, and i-drive.com did the same in June.

My Docs gave its customers about two weeks warning, via e-mail, of its policy change. However, the company had announced earlier this year that it would stop accepting new users for the free service. My Docs then pledged to continue supporting users who already had signed up for and were using the free service.

Lack of bandwidth

"We had a conflict," says Steve Dempsey, My Docs Online's president, explaining the decision to end the free service. "Our free users were competing for our resources, the same resources that our paying customers were spending money on. We decided that this move was in the best interest of our paying customers."

Users of the free service were draining the company's available bandwidth, causing performance problems for both free and paid users, Dempsey says.

"Uploading and downloading files, especially the larger video or MP3 files that a lot of the free users were storing, requires a lot of bandwidth, and bandwidth is what people notice," Dempsey says.

Instead of making money from advertising, as was My Docs' original plan, the company now is positioning itself as a service for mobile businesspeople.

"We started as a very Web-centric company, but our focus now is very much on wireless. We help businessmen and -women access the files they need, wherever they are and on whatever device they may be using," Dempsey says.

A FreeDrive no more?

The scenario is familiar. Even FreeDrive, a holdout in the free storage space arena, seems to be reconsidering its business model. In March, Mike Ferconio, FreeDrive's vice president of corporate development, said the company would "always offer a free service."

Ferconio is no longer with the company, but the current vice president of marketing, Donna Williams, won't make the same commitment.

"I don't think any company can say 'always,'" she says.

FreeDrive still offers a free storage service, although customers only are allowed 5MB of space. When the company was launched in 1998, it offered users 50 MB of space. Williams says FreeDrive may discontinue its free service, but declines to give details, saying only that it will take appropriate steps to notify customers when and if that happens.

FreeDrive supports its free service by requiring users to sign up for e-mail newsletters, Williams says. The company earns money by selling the advertising space in those newsletters.

Ready to pay up?

Will users, accustomed to online freebies, be willing to pay up? The folks at My Docs Online know that not everyone will be. Fewer than 5 percent of the company's home users upgraded to the paid model in the first days after they were notified of the change, says Steve Campbell, the company's product manager. But nearly 60 percent of the business users have upgraded, he adds.

Dempsey and Campbell both consider the switch to a fee-based service only a step in the right direction.

"This is absolutely a positive step," Campbell says. "It says that our paid version was successful enough that we simply had too many free users."

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