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Sept. 14, 2011, 1:45 p.m.

News.me, the iPad Twitter aggregator, relaunches as a free app and spins off from Bit.ly

The social news service explains why it’s is going from fee to free.

News.me is going free. The personalization-driven, filter-focused iPad app, initially prototyped at The New York Times and incubated within the Betaworks company Bit.ly, is announcing today that its iPad app — previously $0.99 a week or $34.99 a year — will be free to all.

It’s also going independent — sort of. News.Me is announcing today that it is breaking free of Bit.ly and becoming a separate incorporated company (News.Me Inc.). It will still operate under the Betaworks umbrella.

“Standing alone,” says Jake Levine, News.me’s general manager and Betaworks’ erstwhile (and awesomely job-titled) entrepreneur in residence, “we’ll have a greater ability to focus on the product — and to maintain as our strategic priority the development of the experience and focus on the customer.”

The fee-to-free move is an acknowledgement of the fact that network effects tend to be more effective when products are free — making their content, whatever it may be, more widely consumable and shareable. And News.me, like other social news services, “is an application that gets better when more people use it,” Levine notes. (Though he declined to share usage stats, today’s news would suggest a desire for more scale than what a paid-content strategy could offer.) With today’s mini-pivot, News.me — though still funded by Betaworks — is adopting a typical startup attitude: develop the user base first, the business later. Ultimately, “our goal is to find a business model that aligns to the grain of the product,” Levine says — a model that “at worst has a negligible impact on the product experience, and at best actually improves it.”

Though the revenue proposition is changing today, News.me’s user-facing product, in general, won’t, Levine says. The app will still focus on creating a good reading experience; it will still focus on aggregating content from a wide variety of sources. And, speaking of, nothing’s really changing about News.me’s relationship with the publishers whose content it’s licensed, Levine told me. (Disclosure: The Lab is one of those publishers. We haven’t seen any payments yet.) Though the contracts themselves will change to reflect News.me’s new status as a standalone company, the licensing arrangements — which pay publishers a small fee each time one of their articles is read inside the app — will live on. “We want to continue to work with them and continue to find a solution that’s fair for our users and partners,” Levine says. “Those conversations are all ongoing, and we’ll continue to experiment and find ways to make everybody happy.”

The first step to making everybody happy: making News.me’s product free. Levine sums it up: “We want to bring lots of people to the application. We want to make the product experience as good as we possibly can. And then we’ll focus on finding interesting, innovative ways to capture some value for ourselves.”

POSTED     Sept. 14, 2011, 1:45 p.m.
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