How much does it cost you to use Google? How about Facebook or Twitter? To place a call with Skype? What does it cost you to upload a video to YouTube? To start a Yahoo group? To create a certificate at Cyberbase Trading Post? The answer of course to all of these is nothing – those services are free!

Most wildly successful Internet business models are based on the concept of free. And just giving away a free whitepaper in exchange for an email address is not enough – the actual product or service needs to be free. Free by itself is not a business model.  But free coupled with a compelling path to paid services, is. And free is what drives word-of-mouth marketing.

Hotmail was the first Internet based email service and it was totally free. At the bottom of each email message was a short ad – “get your free email account at hotmail.com”. Talk about word of mouth marketing! Everyone who used hotmail ended up promoting the product to everyone they emailed! As a result, hotmail grew by tens of thousands and even hundreds of thousands a users daily!

VistaPrint is one of the most successful ecommerce companies year after year. They process over 54,000 orders on more than 100 products every day, serving over 8 million customers worldwide. They give away free business cards. You select the card style and put in your name and contact information. They print up 250 cards and send them to you for free (you do pay for the shipping). Like Hotmail, the only catch is that on the back of each card is printed a small message: “get your free business cards at VistaPrint.com”. This type of viral marketing obviously didn’t happen by accident – it was done on purpose.

I had a customer who sold popcorn – the very best gourmet popcorn available. His idea was to give away free samples of his popcorn on his website, then promote this by dressing up as an old-time popcorn maker and making a video for YouTube where he advertised his free popcorn. This is an incredible idea; sadly he never did this because he was afraid the response would be too great! He may have been right – but the idea is to generate exactly that type of word-of-mouth marketing.

Now it’s your turn – what can you give away for free that will generate a world-wide buzz? Can you use this to drive people back to your physical store? Can you use this to get customers who will pay you?