Premium or Freemium?

By Editor April 19, 2010

Is “Freemium” a viable model for startups (courtesy of ReadWriteWeb)?: 

I guess time will tell, but several well-known startups have found tremendous success giving away services for free and then adding a premium version, once some kind of value has been established.  Ning may just ultimately be a good example of the principle that the pricing strategy matters much less than the business model—if you can’t scale, “Freemium” doesn’t matter.  As Audrey Watters of RWW put it: “It may well be then that Ning’s announcements are less a reflection on the freemium model than on the company itself.  Despite over $120 million in VC funding, Ning has been unable to develop a sustainable business.”

What do you think about Freemium (and can we come up with a better name for this)?