Chris Anderson writes about the Freemium business model

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Wired’s Chris Anderson wrote an interesting article about online business model, The Economics of Giving It Away: In a battered economy, free goods and services online are more attractive than ever. So how can the suppliers make a business model out of nothing?

Here’s an excerpt from the article:

Digital economics have spurred entirely new business models, such as “Freemium,” a free version supported by a paid premium version. This model uses free as a form of marketing to put the product in the hands of the maximum number of people, converting just a small fraction to paying customers. It’s an inversion of the old free sample promotion: Rather than giving away one brownie to sell 99 others, you give away 99 virtual penguins to sell one virtual igloo. (Confused? Ask a child: This is the business model for the phenomenally successful Club Penguin.)

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