In 1988, “Saturday Night Live” aired a parody commercial deriding clumsy business models. “At First CityWide Change Bank, our business is making change,” said actor Jim Downey, portraying a naive “service representative.” After listing various ways in which his company could break a five, he explained how money is made. “The answer is simple: volume.”

More than 20 years later, I wonder if some digital entrepreneurs think the same. “Simple: we’ll make money on volume of traffic, at some future date,” they promise, even if the math doesn’t add up right now. Despite a knee-deep recession, the idea of giving away something for free and charging for something else later is bigger than ever. But is “free” selling? Continue »

The launch of Apple’s new iPhone 3GS was the best sales day ever for AT&T’s retail stores, while the number of orders taken at its online store also hit an all-time high, according to an internal memo obtained by MacDailyNews, a blog devoted to all things Apple. While the memo doesn’t outline the precise number of devices sold, it does reveal other details.

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008 — all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

Apple sold a million iPhones the weekend of the 3GS launch. A survey by Piper Jaffrey shows that nearly 56 percent of iPhone 3GS buyers were upgrading from the old device and only 28 percent were switching to AT&T — but that’s still about 280,000 new subscribers that will be handing over a lot of money to the carrier. As I pointed out in a previous post, “[T]he average iPhone user gave AT&T about $94.74 a month vs. an average postpaid AT&T customer, who spends about $59.21 a month.”

Millions of people logged onto the web when the news of Michael Jackson’s sudden death broke last week, and they’re continuing to flock to eBay to get their hands on the pop king’s memorabilia. The online auction site said it’s since seen the percentages of daily searches, listings and sales of Michael Jackson memorabilia rise dramatically.

As of yesterday, eBay said the number of searches for Michael Jackson items had surged 235 percent over the week prior to his death. People are apparently looking to profit off their old Michael Jackson loot, too — new listings of such gear is up 57 percent.

Michael Jackson dolls have risen in value as much as 450 percent to sell for about $120, according to Vendio Research, which provides market research for eBay sellers. With the advent of iPods, however, a vinyl version of the iconic “Thriller” album is only going for about $70. But sales of single white gloves have gone through the roof, Vendio said, with 352 sold last week alone on eBay vs. the prior average of five a week.

Akamai today said it would provide adaptive bit-rate streaming to deliver video content from web sites to the Apple iPhone 3G and devices running the iPhone OS 3.0 operating system. Basically, using adaptive bit-rate streaming means folks can watch streaming video on their iPhones or iPod Touches with fewer stops and starts. Adaptive streaming adjusts the video content to a lower or higher bit rate, depending on how robust the web connection is. Akamai offers a similar service for Microsoft’s Silverlight for video on PCs. Adobe Flash and Move Networks also offer adaptive bit-rate streaming, although Adobe uses a proprietary method that requires special servers.

Apple and Akamai are bringing the service to the mobile world, which will be great for dealing with the many variances in mobile data connections, and will provide for smoother video delivery over dodgy networks. Videos can run in the Safari browser, so they don’t even require a special app that AT&T, the carrier that provides service for the iPhone in the U.S., might try to block. For more details on this, check out the awesome story Liz did about HTTP video on the iPhone or her in-depth look at adaptive bit-rate streaming over at our subscription site, GigaOM Pro. For pretty video streaming, check out Apple and Akamai’s  show-and-tell site.