Spending time at LeWeb I have noticed a lot of use for the term “Freemium”. Freemium is a business model that has two streams – free and premium. The free stream offers a product. site or service (or app) that is free but with limited function or features. The aim of the free model is to grow user base, interaction and relationships with the intention of upgrading users to a premium model where the revenue kicks in.

We may see businesses like Twitter, which is currently free, start to offer premium services after it has grown to critical mass BUT I fear that the word Freemium is going to be the ‘catch all’ term what will grace too many business plans that have no hope of making money.

Watching the startups yesterday at LeWeb I felt that we were back in the Dotcom boom of the late ’90′s but with greater Internet penetration and much more real income being generated. The big deals like Zappos, Facebook, Twitter will fuel startups and venture capital investments but not all will succeed.

Freemium has the potential to succeed but many startups will launch with this term forgetting to add the ‘emium’ bit of the business plan.