Free Site
From Free Stuff Wiki @ A4F
A free site is a freebie company, often a Limited Liability Company (LLC), that operates an incentive business model in order to give away free gifts. Free sites attract new customers with freebies, hence giving them the nickname of a “free site.” Examples of free sites can be found in our freebie company list.
Networks
Free sites can be independent or networked. Free4Me and Transcendent Innovations, for example, are companies that have many free sites associated with their respective networks. A network is basically a group of free sites owned by a single company.
How a free site operates
Free sites make money to give away free gifts through incentivized advertising. This means that the free sites offer an incentive – a freebie – to gain business. Free sites’ goal is for new customers to click on advertisements and use or try the products being advertised, such as Blockbuster.com. As a result of bringing new customers and business, the advertising company (Blockbuster) pays the free site a predetermined amount of money, such as $40 per offer completion.
For example, freeipods.com gets paid $40 for batman129 to complete an offer, and then another $240 for each of his 6 referrals to complete an offer ($40 x 6 = $240). The free site, freeipods.com, now has $280 and can afford to purchase and ship an iPod to batman129 at an online rate, leaving some money leftover as profit.
Profits
Free sites generally make the bulk of their profits when users complete an offer and never complete the site (and never receive the free gift). This is because they gained money from the advertiser(s) for the user’s offer completion, but did not have to turn around and purchase a free gift for the user.
Profits in the freebie industry are minimal, and are dependant upon the size of the user base and quality of the free site. Free sites that have few users will not be earning much money because few offers are being completed, bringing in very little revenue. Likewise, free sites that are of poor quality or ineffectively being managed will not be able to bring in a wide user base, thus limiting revenue.
