The uproar that followed Facebook's decision in February to change the terms by which it stores users' content highlighted many of the issues faced by the owners of free media.
While Facebook may have millions of highly engaged users and the ability to profile them by demographic and interest, those users see it as a free service and have so far resisted most attempts to make it a viable advertising medium. Facebook founder Mark Zuckerberg continues to search for a way to make significant money from his property.
He is not alone. While there is no denying the success of media brands based on offering users free services or content, it is still far from clear how advertisers can relate to many of those free media services and how the media owners can make money from them.
Generation Free wants free websites, social networks, mobile applications, mobile downloads and games, and it does not expect to have its experience interrupted by ads.
As brands and media owners wrestle with that challenge, some observers have begun to question whether free digital media has a future. Richard Williamson, director at KPMG's media practice, says: "The argument that all content is moving to free is fallacious. As the internet becomes more sophisticated, polarisation increases.
"Premium content such as Club Penguin, World of Warcraft and [business network] Xing will go to subscription and the majority of more marginal or undifferentiated content will be forced to go free to gain any sort of audience."
As we move deeper into a recession, this question becomes more pertinent.
The time is ripe for a look at free content: to see how advertisers are using it, to look at whether and how the media owners are making any money and, crucially, to see if the free digital media model has a future.
Online media consumption is booming. According to the latest European Interactive Advertising
Association Mediascope Study in November 2008, online is the only form of media that has increased in terms of consumption in the past year. Time spent watching TV and consuming print media have both declined, while time spent listening to the radio remains static.
Consequently, major providers of free digital media such as Google, MSN and Yahoo have become as established as ITV, The Sun and Capital FM. They have also become adept at working with brands.
Phil Macauley, head of commercial services at Yahoo, describes a recent campaign: "In February, Yahoo and Nissan ran a campaign in major ski resorts in Europe. This involved designated Nissan ski runs where photos were taken of skiers and uploaded to Flickr, where skiers could see themselves on the slopes. There was also in-resort après-ski activity, promoted online via targeted display advertising on Yahoo."
Brands are increasingly using the reach of free websites such as Yahoo to connect with their consumers in this way. Most notably, with the growth of broadband, websites are raising revenue from their content through pre-roll advertising around video-on-demand.
Jamie Estrin, managing director of The Web TV Enterprise, offers two examples: "Consider a 25-year-old man who visits Nuts.co.uk to find out about the latest action films being served a trailer for the new Rambo movie before he starts watching a video clip. Or a 20-year-old girl viewing an exclusive interview on the Girls Aloud website being served a 10-second ad for the latest Motorola music phone."
Generation Free is also the iPod generation and the rise of the MP3 player has led to an unprecedented explosion of interest in music. To some extent, this has translated into increasing online sales.
According to the International Federation of the Phonographic Industry, the recording industry's representative body, digital music sales in 2007 were up 40% on 2006 to an estimated $2.9bn, representing 15% of all digital income.
Yet at the same time, consumers have never been so reluctant to pay for their music. According to composer lobbying group British Music Rights, 63% of the British public who download music have downloaded music illegally, through sites such as Kazaa, Limewire and Bittorrent.
Paul Gayfer, strategy director at comms planning agency Goodstuff, believes the emergence of the freemium model on sites such as Last.fm and Spotify is a pointer to the future.
He says: "Spotify allows users to access thousands of tracks and albums to stream for free, and to upgrade to a premium account for £9.99 a month, givng you an ad-free service, among other benefits."
Even artists and musicians have begun to adopt this business model. For example, Nine Inch Nails released the first nine tracks from the album Ghosts I-IV as a free digital download and sold the entire album for $5, as well as an ultra deluxe edition box-set for $300.
The band sold all 250,000 copies of the ultra deluxe edition of the album, grossing $750,000 for the band in just three days.
Recent research from comScore Mediametrix revealed that online, free-to-play games reach approximately 40% of all people online.
Companies such as Spil Games, EA, MSN and Miniclip are growing rapidly, taking advantage of this burgeoning enthusiasm for free online games. The largest player according to comScore, Spil Games' global revenue jumped 125% in 2008.
Advertisers are flocking to the medium. UK-based free-to-play games site Mousebreaker recently partnered with the band The Prodigy to produce a new game as a key viral element in the launch of the album Invaders Must Die.
A classic shoot 'em up, featuring music and artwork from the new album, the game is viewed by the band and its record company as an excellent way of connecting with potential buyers.
As Paul Collins, publisher of Sticksports.com, which provides free-to-play online cricket, football, baseball, tennis and motorsport games to about 2.2 million visitors every month, explains, free-to-play online games are one of the most effective methods of targeting the key demographic of young professional men.
"Our users are male, aged 18 to 30 and work in an office environment. Seventy-eight percent of users do not yet have children and so they have the disposable income that makes them extremely attractive to advertisers."
Jude Turner, client services director of agency Magnitude, which has produced award-winning games on behalf of Wagamama, concludes: "Send a game out to a database of 100,000 people and, on average, 15% of those recipients will forward it on to a friend. That's 15,000 new people communicating with your brand. Then they forward it on, and so on. The joy of this model is that there is no end. Long after the initial launch, users can still be forwarding on the game you have created."
"Social networks are born truly free," says Goodstuff's Gayfer. "Not only do users not have to pay for them, they also expect them to be free of advertising. All the big social networks, from Friendster in the beginning to Twitter today, were built on this principle.
"However, as each develops, the need for revenue generation presses and the truly free model is compromised. Each network has faced its own challenges in this area and has adopted slightly varying business models in response."
While business networks such as LinkedIn are building a highly engaged membership through a subscription-based model, the most common revenue-generation model adopted by Friendster, MySpace and now Facebook is advertising.
The consensus seems to be that no network has managed to get this right yet.
Where MySpace is too invasive and garish, Facebook is too structured and cold, and the advertising on both is very avoidable for users. Yet brands can find ways to use social
The key is to engage users with personality and to accept that the conversation is two-way. A good example of this was the recent ComparetheMeerkat campaign for ComparetheMarket, which took the television ads' character, Aleksandr the meerket, to free online social media with great success.
Aleksandr now has 4,250 followers on Twitter, 175,000 Facebook friends and his ads have been viewed more than 100,000 times on YouTube.
The race to attract advertisers gathered pace in March, when, noting the sudden adoption of Twitter by brands, Facebook launched a redesign of its user homepage.
Peter Deng, product manager at Facebook, comments: "The new user homepage has been designed to make it even easier for users to create content and receive real-time updates from the people and connections they have on Facebook. It also gives users even more control over who and what they see in their stream by offering new filters."
It remains to be seen how Facebook, Twitter and the other social networks will raise revenues from this interest from brands.
The mobile internet has been the next big thing for quite some time but, as with social networks, it is still to deliver on that promise. Elaine Doherty, principal business consultant at Logica, says: "People currently use their mobile internet service for basic things such as checking the news or searching for directions, and usually only as a necessity."
She continues: "Consumers don¹t associate their mobile devices with the internet and, when they do, they often find the content and media they are searching for hard to find (if available), slow to load and in formats their phone doesn¹t support.
"Consumers' perception is often that the mobile internet is expensive to search. There is a major challenge here for media buyers and brands alike, as the significant revenue streams in this space lie in new exciting content."
And yet, the arrival of the iPhone has provided the first glimmer of hope that the mobile internet might realise its potential. People are starting to use free applications on the iPhone, as well as on the BlackBerry and Google's G1 phone. Advertisers are also beginning to recognise this and to look at ways to use the emerging medium.
The Pepsi Max "Kicks" campaign is one example of how this is working. By scanning a code on the drinks can with a phone, consumers were taken to a link where they could download games such as PES 2009 and Project Gotham Racing.
The strategy generated mobile phone data for the company and provided a new way for consumers to engage with the brand.
We can expect to see more of these and other free services provided via mobiles, and it is just possible the mobile will fulfil its potential as a medium for brand communications before long.
10 cult sites to watch
This free music streaming site launched in October and has already attracted one million users. Users can pay £9.99 a month for an ad-free service
A free service that allows users to earn $0.05 for sharing a music track with another user or to donate that money to charity
An on-demand music television and digital entertainment network, featuring shows around music videos, artist interviews, and music culture and lifestyle content
The site describes itself as "an independent, highly researched interactive travel guide and free online booking service". A user describes it as: "Everything Lastminute.com should have been - intimate, high-quality recommendations, a lovely brand experience."
An independent site that allows users to compare supermarket prices. It also features free money-saving tips and a calorie counter
Launched in April 2008, Blinkbox allows users to watch and share more than 3,000 movies and TV shows as well as 20,000 clips. Many are free and users can send clips to friends
One Small Deed enables people to let the world know the good deeds they have done and so inspire others to do the same
A spin-off from the popular children's cartoon, Bakugan has attracted a devoted following for its free online game
Free peer-to-peer software that makes downloading, streaming and sharing large media files fast and easy
At the last count, Apple's website contained 15,000 applications for the iPhone, many of them free. If you want to play Who Wants To Be A Millionaire? on your iPhone or find out the latest entertainment news, you can download it all from this site