Bionicoder's Blog

Windows software development and business blog

Archive for the ‘Software Business’ Category

Paypal Charges $10 for Nothing

Posted by bionicoder on March 26, 2010

If you ever used Paypal merchant service, you would feel like to run away from it.  Especially if you got a chargeback from buyers.

Since we used Paypal to receive money from software buyer, we got a few chargebacks. In the beginning, we tried to dispute by providing enough proof to Paypal.  As you guessed, we lost case and payment was taken back. Additionally  Paypal charges $10 for disputing on our behalf per Paypal claim.

Then we thought if we can’t win, why we need Paypal charge us $10 for disputing a hopeless case. So we stopped arguing anymore. When other chargeback cases happen to us, we just refund money back to buyer without any argument. This at least saves us $10!!!

However this “good” thing did not last too long. In recent two years, we noticed Paypal informs us about chargeback two months after transaction date. That means Paypal doesn’t leave us the  option to refund money to buyer. The only option available for us  is to let Paypal dispute for us. Of course we have to pay $10 for disputing each time.

The most ridiculous chargeback was two weeks ago. We got an email from Paypal about a Chargeback. The transaction was in early January 2010. Of course, we can’t refund from our Paypal account. In Paypal email, it asks us to provide information about transaction and proof of sending purchased item to buyer within 10 days.  Since we already know there is no hope to win the case, we just wait without doing anything.  On the tenth day from Chargeback informing day, we got another email like below.

Hello Bionicoder,

Using the information you sent us, we are disputing the buyer’s request to
reverse the payment.

The buyer’s card company has reversed the charges for this payment. We have
placed a temporary hold on the disputed funds until this matter is
resolved. If the card company decides the case in your favor, the funds
will be available in your PayPal account.

The credit card company has charged PayPal a settlement fee for this
chargeback. According to the terms of the PayPal User Agreement, we debited
your PayPal account to cover this fee.


Attn: Accounting Department
P.O. Box 45950
Omaha, NE 68145-0950
United States

What a ridiculous thing! We never provided any information to Paypal. How can they use the information we sent?

In the mean time, this chargeback event was marked as “completed'”. Like always, Paypal charged extra $10.00, but for nothing.


Posted in business, Software, Software Business | Leave a Comment »

Interesting facts about OpenOffice

Posted by bionicoder on May 5, 2009

It is very interesting to see people discuss this topic. One interesting thing interests is that Sun ever considered ad-suuported model for open-office 2 years ago according to  this message.

Another interesting thing is that freeware + shareware model does not work well for all products. Sun did not make enough money from StarOffice ($34.99 per license). This can be proved by the recent acquisition. It is a failed model for Sun. If Sun succeeded on StarOffice, they should not be acquired by Microsoft. See how much money Microsoft earned from Office products. I guess maybe billions.

It is time to pay more attention on ad-supported model.

Posted in business, Software, Software Business | Tagged: , , , | 1 Comment »

Ad-Supported Version of Microsoft Office 14 May be Available

Posted by bionicoder on March 22, 2009

On Feb 24th 2009, I posted an article asking that Will Microsoft consider ad-supported software model again? Now this will become true. On March 3rd, Microsoft Business Division president Stephen Elop said Microsoft would release an ad-supported version of Microsoft Office 14 — Office 14 is expected to be available in 2010. Elop said the purpose behind releasing a free version of Microsoft Office with ads displayed alongside the workspace was to draw “pirate customers into the revenue stream.” according to Silicon Valley Insider.

As my analysis in previous article, this would be Microsoft strategy to compete with Open Source and freeware. It is not only for fighting software piracy. Then what would be Open Source ‘s response to this? Will Open Source follow Microsoft to use ad-supported model as well?

One thing we can predict is more and more software companies will follow Microsoft to put ads on their software in the future. No matter you like it or not, this is the trend driven by competition.

Posted in ad-supported, Software, Software Business | Tagged: , , | 8 Comments »

Three Ways to Monetize Freeware

Posted by bionicoder on March 4, 2009

Some developers make freeware just for giving back to Internet community without considering any money back. I give my respects to those developers. For other freeware developers (maybe high percentage) who also want to make money from freeware. I summarize three popular ways to monetize freeware for your reference.

This is not for companies who use freeware to attract customers. For example, I know many security companies use free anti spyware or similar security tools to attract customer. When customer download their tool, it reports that your Windows has many malware running, if you want to remove them, you need to pay for the advanced feature.

Software as a Service(SaaS) Model

The implication of SaaS is software delivered as freeware. Your revenue comes from service provided following the software. The successful freeware or open source using this model are MySQL, JBoss, Apache and Spring. As you can see, this model better fits the freeware or open source which targets enterprise customer.

Also this model has high requirement for the development team. The team needs to be dedicated and have enough experience and skills for high quality product. The quality is the key for having ideal customer base.

Ad-supported Model

The ad-supported model better fits consumer software. The idea is simple. Software works like a media carrying ads. Software is offered for free. Revenue comes from advertising on software GUI. The ad-supported model I am talking about here is NOT equal to malicious adware. What I am talking about is like Yahoo Messenger bundle with ads on the GUI bottom.

The challenges for developers considering Ad-Supported model are:

  1. the ads inventory.
  2. It is hard for 100,000 user base software to get constant ads from advertiser

  3. ads management
  4. It is extra work to manage ads delivery

The available market solution is Younexus advertising solution for software application. What Younexus does for software is like what Google Adsense does for website. Younexus feed ads to software participating their program.

In addtion, Younexus requirements for software joining their program is software should not contain virus or any malware.

Selling traffic Model

This model requires you have enough patience because it will take longer time till you see revenue come in. The way it works is you offer software for free and wait for other website to add link to your website if they like it. Ideally you get bigger and bigger traffic, then you can get benefits from your website advertising.  This article explains how this model works in detail.

This model works for software with unique and special technique. For such kind of freeware, people like it because of its uniqueness. They can’t think of anything else once they need use the special functionality. For example, when you want to zip a file, the only one you can think of is WinZip.

How about if you wan to find out a FTP tool? They are many free FTP client tools available. It is too common.

Posted in ad-supported, Software, Software Business | Tagged: , , , | 5 Comments »