I would highly recommend reading Free: the future of a radical price by Chris Anderson. It was a book I could not put down; I finished it in three days. Free describes three Free business models: Direct Cross-Subsides –Give away cell phones, sell minutes of talk time;, Three-Party or Two-sided markets – Give children free admission, charge adults; Freemium – Give away free photo-sharing services, charge for additional storage space.
Below is an excerpt from the book:
“There’s no such thing as a free lunch.” The phrase refers to a tradition once common in U.S. saloons, which began offering “free” food to any customer who purchased at least one drink. Ranging from a sandwich to a multicourse meal, these free lunches were typically worth far more than the price of a single drink. However, the saloon-keepers were betting that most customers would buy more than one drink, and that the allure of free food would attract patrons during a less busy time of day. .
In 1872, the New York Times reported that free lunches had emerged as a “peculiar” trend common in the. Crescent City (New Orleans), where a free meal could be found in every saloon, every day. The spread included vast dishes of butter, large baskets of bread, huge vessels filled with potatoes, stewed mutton, stewed tomatoes, macaroni a la Francais, and “a round of beef that must have weighed forty pounds.”
According to the report, the free-lunch custom was feeding thousands of men who were subsisting “entirely on meals this way.” The Times article continued:
A free-lunch counter is a great leveler of classes, and when a man takes a position before one of them he must give up all hope of appearing dignified…. All classes of the people can be seen partaking of these free meals and pushing and scrambling to be helped a second-time.
If you want to read more go to this website: Wired–Free 0.00