Freemium is a business model that works by offering basic services for free, while charging a premium for advanced or special features. The word freemium is a portmanteau created by combining the two aspects of the business model: free and premium. The business model has gained popularity with Web 2.0 companies.

The freemium business model was articulated by venture capitalist Fred Wilson on 23 March 2006. After describing the business model, Wilson asked for suggestions as to what to call it. Within a matter of hours, more than 30 name suggestions were given by his blog readers.

One such suggestion came from Jarid Lukin of Alacra, one of Wilson's portfolio companies. Lukin coined the term "freemium", and Wilson and his audience adopted it for the business model. The term has since appeared in Wired Magazine and Business 2.0, and has been used by prominent bloggers such as Chris Anderson and Tom Evslin.

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