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I wonder how much the per-search cost is marginal cost vs. amortized fixed costs.

If their paying user base grows by 10x, do the searches drop from 4¢ each to 2¢ each?

Most of their cost comes from API accesses to other services (e.g., Bing), so unless they can replace those API calls the price cannot go down very much.

API access is negotiated by volume, so as they grow, they can negotiate preferential pricing.

> Our proposed price is dictated by the fact that search has a non zero cost. With other search engines, advertisers cover this cost. But it costs us about $1 to process 80 searches.

.0125 per search. The teams rate is twice that.

Or give notice to power users that they are exceeding quotas by a lot. Have a power user subscription perhaps. Many people don’t download a lot and ISPs are good, but you have outliers, datahoarders perhaps who take a lot of bandwith.