Price Point of Free--Class Discussion

In class we discussed advertising supported websites like google and skype. I was already familiar with the fact that we can use these websites products and services for free because they receive their income from advertisers. What I was not aware of was the idea of "free now, pay later with lock-in". What this is essentially, is that a company will give you its basic service for free, but if you like the service enough and want the more sophisticated version with more capabilities, you have to pay for it. A good example of this is Skype, which is a company that services VOIP technology. Skype lets you do the basic computer to computer calling for free. However, If you want more advanced technology like allowing someone from England to call your computer (but without the long-distance calling) you would need to buy the more advanced version of the product.

Free now, Pay later with Lock-in: Brilliant idea. I think this is a great way for companies to market their products.