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I hope that if that day comes you may consider trying out some searxng instances, as they do probably give similar results as kagi as both pool results from the same true search engines. I am so fustrated that we are at a point where people feel the need to pay 120$ a year for something that has been a staple of the free as in freedom internet forever, especially when things like SearXNG exist.
Its the third option, and no while nothing in computer infrastructure is ever truly free as theres always operational+maintenance cost as well as dev time and setup time, when nothing is at cost to the end user and the hosting provider isn’t trying to make a profit off their information then I consider it good grounds to it a ‘free’ service. I actually just posted a guide to alternative search engines over at !technology@lemmy.world , you may find it an interesting read.