I don't normally read Mark Cuban's blog, but a friend suggested I check out a specfic post of his.  Here it is.

Sorry if I come across as a hater, but his point really bugged me.  First of all, the whole premise of his argument is that companies that provide free services (like Google and Facebook) will inevitably fail because of their free offerings.  That's an interesting idea and I was ready to read how he backed up his argument, but he never once addressed why offering things for free is a problem.

His real point is that every company will eventually have to deal with competition and there's no way for an established company to survive very long.  He's basically saying that as soon as a company is successful, they should face their inevitable downfall and make short-sighted decisions because there's no way to succeed long-term anyway.

So here are the obvious problems with this argument:

• There are a ton of companies that have managed to be around for the past 100 years.  Cuban is suggesting that this advice only applies to "freemium" companies, but he doesn't to anything to explain why they're any different.
• He suggests that because big companies don't stand a chance, they should sell off when they start to fade.  You'd think that if a company is doomed to fail, no one would buy it.
• Free web applications have only been around for about 10 years.  Really, they've only been around five years in their current form.  It's way too early for anyone to act like they know how these companies will age.
• Mark Cuban sold some website I've never even heard of to Yahoo for six billion dollars and now Yahoo isn't doing so hot.  It seems like he's taking this experience (selling before you're too big, then let the big guys fail) and assuming that it will hold true in all cases.  The fact of the matter is that Yahoo made a lot of really bad acquisitions.  It's not an intrinsic problem for big companies.
• AIG and GM are good examples of companies that got too big and failed.  However, no one can suggest they would have been better off giving up after 10 years of being on top.
• Some sites that offer free services still have real business models.  Google is a legitimate advertising and media company.  Sure, they need to keep innovating or else they'll be toppled, but my money's on them keeping the throne for at least another decade (and maybe another century.  Who knows?).
• Here's a snippet that Cuban suggests applies to all large freemium companies: "their ecosystem has bloated to the point where they can no longer create anything for free".  What company has done this?  Facebook, myspace, google, yahoo...they're all free still.  Where is he getting this argument from?

There's a lot more not to like, but I'll cut it off there.  The point is, I can't agree with the attitude of giving up just because someone better will probably come along.  It's funny how his basketball team perfectly models this attitude.