What's Freemium?
A couple of months ago, Fred Wilson blogged about his favorite business model, where web companies provide free use of their basic service, then offer premium versions and add-ons, available for a fee. As Fred pointed out, many successful companies have adopted this model (Skype, Flickr and Trillian, among others) .Alacra's Jarid Lukin proposed the name "Freemium". And, from the looks of it, it seems to have stuck.

Freemium is used in concert with other biz models. Free services is provided in the first instance.So it is important for companies going on Freemium to master costs (ex no distribution and no stocking) as a matter of fact such a model cannot be applied to clothes, furnitures and any tangible goods which must be transportated.Morever this model is best suited for online services and downloadable products (ex My space, VIADEO, IT sofware). In these cases the company can expect a return on investment in that the product once created and published is ready for immediate download without any fee. Also this model is best suited to social, referral and professional networkings where no publicity or advertising is needed.

As Katherine reports, a "freemium" business strategy attracts quick customer adoption--this has been the case with QNNtv--and then offers premium services that cover the cost of the free service.

Online businesses using FREEMIUM are
- Picasa ( google)
- Skype

As advantages
- Free service brings many people on the website
- Possibly to have many clients
- Good advertising for the product and society.

As disadvantages
-People cannot use the entire service
-Difference between the service (value) and the price you paid to use it
-Difficulty to transform curious into buyers