One of the often-proclaimed advantages of the Web is that it lets sellers experiment with pricing. Selling electronic content, however, doesn't lend itself to the same Web-based price testing that we see with commodities such as books or electronic gear. Information sold on a transaction basis has a single, published price. In fact, customers often come to a site because of a specific price point. The buyer is in the position of shopping around for the best deal. Since the price is usually based entirely on output, the seller is telling the marketplace that value-adds such as powerful search tools, flexible output formats, and deep archives either will not or cannot be metered. Enterprise information contracts, on the other hand, are negotiated on a case-by-case basis and present an almost unlimited opportunity for the testing of price points. All of this got me thinking about price wars, particularly in the setting of enterprise-wide contracts. Of course, it's hard to have a price war when you're competing with a price point of dollar 0. What a difference a stock market crash makes. Free sites are closing down, being acquired or figuring out how to extract money from all those site visitors. The aggregators, database producers, and syndicators are figuring out whether to buy market share at the expense of short-term profits or to hold firm and trust that the competitors will also be looking at attaining or maintaining profitability. When you look at enterprise contracts, price wars don't much resemble a battlefield. In a sense, we're looking at guerrilla warfare; transaction-based customers don't see any change, and it has no effect on the published price sheets. Instead, the enterprise customer gets a call from an account executive who is shocked, shocked at what his rival has been charging the customer, and who offers a deep discount for a contract of a year or two, with the goal of removing that customer from the marketplacefor the duration.
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