Economics is a reasonably simple science: buy low/sell high, supply and demand, incentives and disincentives. But when you add marketing into the mix, things get strange.
AOL, an effectively free ISP (how many Free AOL! CDs have you received today?), is being targeted by Microsoft because, well, they own a market Microsoft doesn't own yet. (I can't wait for Microsoft to get big enough to merge with Costco or mount a full frontal assault on Wal-Mart.)
Case in point: Microsoft is paying $10M to woo away AOL customers, including a $50 rebate for switching. What changed this time? Someone finally realized that it was important to convert one proprietary email/calendar/etc. format into another to encourage people to switch.
