To me it seems the web-based freemium model follows a similar pattern every time.
a) Offer a product or service for free (or very cheaply) in the hope that it will get noticed and start building a strong user base. b) Utilise advertising revenue to keep the product going until it hits critical mass. c) Once at the peak of its growth, either flog it off to a bigger fish or do an IPO.
It's what MySpace did with Old Rupert, then promptly went down the toilet because the user base was already migrating over to Facebook.
More recently, Omgpop brought out Draw Something, at the peak of its popularity they got noticed by Zynga and got bought for $180 million, now player numbers have fallen off a cliff as people get bored and migrate to another free game to play.
Instagram have also just done so by selling to Facebook for a billion dollars, now Facebook has done the same thing through their IPO.
I suspect that Facebook are already seeing their user base migrate over to competitors like Twitter, so they decided that it was time to cash in their chips. Talk of multi-bagger profits from a stock that starts life at $100 billion is pure fantasy IMHO.
