I’ve met some people who are perplexed why some businesses give their products or services for free — and how they make money. In fact, your products for free has been one of the best business models, particularly on the Internet.

With PowerHomeBiz.com, for example, we give away the information for free. But we earn from the ads we post on the articles. Advertising is one of the most common ways information websites such as ours earn from giving away the store for free, so to speak.

This strategy has been used to a great advantage by companies who actually sells products or services. Long ago, Estee Lauder has started the trend among cosmetic and beauty companies to give free samples away, and now this seems to be the norm in the beauty industry.

On the Web, Adobe gave away its PDF Reader and made a lot of money from its paid products. So with Macromedia Flash, which gave away its free Shockwave Player. Skype allowed free download of its software, but earned from their premium services. SixApart offers its LiveJournal blogging platform for free, but sells a premium version.

The trend nowadays is to give something for free — in order to capture the audience attention, make them familiar with the company, and make them try the product. Once hooked, offer them a premium version or offer them one of your paid products.

Business 2.0 calls this the “freemium” business model, where a free version of the product is given away only to lure the customers with the paid version. And you will find that they will want to pay because they have already tried and used the product, or they are more responsive to your offering because they already know and trust your business.