The few companies that dare make their basic product free, but sell the best version of it, are doing very well. Companies like NetworkMagic, ZoneAlarm and AVG.
Following on from selling a reduced function version of Photoshop, Adobe are now planning to launch a free, online, ad-supported version of it. This a win for users, a win for Adobe, but only if it works fast… I can’t help but think it will crawl & crash.