When Freemium Fails - WSJ.com

From a freemium market reality check

"Phil Libin, co-founder of four-year-old Evernote Inc., said "freemium needs time to work." Fewer than 1% of users of the company's free note-taking app become paying customers within a month, compared with 12% after two years, he said. Evernote's premium app—which costs about $5 a month, or $45 a year—features more editing and file-sharing capabilities than the free version.
"You can't use it for something that's a very hit-driven business," added Mr. Libin, who is CEO of the Redwood, Calif., company, with 250 employees. The company has raised more than $100 million in venture capital."

When Freemium Fails - WSJ.com