Free Businesses

Skype, Youtube, Google are the forerunners of new genre of businesses that were essentially started on a free service model. These businesses have also been tagged with most hefty price tags for acquisitions. Their revenue model is none to start of yet these enterprises are quite attractive businesses since they draw humongous global traffic e.g. Youtube is the site with maximum hits today. Such traffic translates eventually to enormous ad revenue.
Is the 'free service' a magic formula? Yes since these three subscribed to it and so are a few upcoming ideas web or nonweb related. But rememeber since it is magic it is difficult to achieve. Ironically these ideas share another common quality: simplicity which is quite often overlooked and mostly avoided. Every one talked about Video hype but Youtube made it real. Freely available ubiquitous VoIP was made real by simple Skype. Google of course pioneered the simple web interface. What about the only text based site craigslist.
The gratuitous model is very hard to sell to investors but it is perhaps the new way of doing business.