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Victims of Sandy Hook

Stop the Slaughter of Innocents. Congress is bought and paid for by gun lunatics and gun promotion groups. If you want to live in a safe America, help buy Congress back for America. Send a donation to Mayors Against Illegal Guns, 909 Third Avenue, 15th Floor New York, NY 10022

Freebie Sites Taking the Net by Storm

The first freebie site saw the light approximately four years ago. Since then, millions of users have signed up for them and business owners have multiplied their offerings a thousand fold. The industry continues to show tremendous growth as browsers can't get enough of these sites and the people that run them are capitalizing big time.

The basis of this business model is a simple one: "incentivized", or "forced leads". Let's try and make those industry terms clear for the layman. It all begins with online advertisers of the CPA variety. Advertisers in all shapes and sizes offer a CPA or Cost Per Acquisition payout to affiliates that promote their offers. When a user signs up for one of these offers, the affiliate makes a commission.

Here is where the "incentivized" part comes in. The affiliate, in this case a freebie site owner, shares this commission with the user that generated it. This sharing takes many forms including gifts ranging form the original free iPod to free Xbox 360s and just about anything in between. Cashback rewards have also become increasingly popular and some users have made over $10,000 in easy money just by completing various affiliate offers on freebie sites.

Beyond the opportunity to make free money or earn a gift, these sites have something else working in their favor that make them spread like wild fire: viral marketing. Word of mouth for these literally spreads like a virus, from one person to their social network and so on. The reason for this is that freebie sites offer rewards to users who refer new users.

On one side of the business model, users are required to complete one offer themselves and refer a set number of friends to do the same so they can earn their free gifts. On the other side, users earn a fixed cash bonus for every person they refer to the site.

That's all well and good from the user's perspective, but what makes this model so attractive to the business owners that run these sites? The simple answer is of course money. Here is how these earnings break down.

In this first example, the site owner is offering a Video Ipod for eight referrals. This means the user has to sign up to the site, complete one offer and refer eight of their friends or family to do the same. Once this process is complete, they receive their gift.

Here is the catch: 90 percent of users can fill an offer and refer one, two, three friends. Then it gets hard and unless the user in question has a huge social network or knowledge of how to get more referrals through forums or advertising, it pretty much stops there. In this case, the site owner has generated an average of $25 to 30 per completed offer and has not shipped a gift. That's $25 to $120 in profit without doing a thing.

For this second example, the site uses the revenue share principle. When a user completes an offer, they get 60 percent of the commission money. With thousands of dollars in offers up for grabs, the site owner is pocketing 40 percent of hundreds of dollars per user.

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