I was having a discussion with a friend yesterday about emerging business models. The fact is that this world is constantly in revolution, thus nothing can ever REALLY be static.
Google offers a myriad of services for FREE yet rakes in millions of dollars in profit annually from advertising and other services.
Asides from the likelihood of sell ons from offering free services, the good will that you have from your customers is priceless. In this world of Shylocks and opportunist producers and suppliers of goods and services, always ready to take advantage of your ignorance or desperation, offering a service for free is a handshake that can rarely be turned down.
However, in reality, nothing is free. Not love, not friendship. But at least you get the chance to pay later, then, you will be paying based on real value not on percieved value which is still a dandy good deal.