How do companies that offer free products make a profit?

[Merp]

How does a company like Facebook make money? Is it just the ads? And how do software companies sell their software free of charge and keep their company alive/making profit? How can a company offer free products and services while still making money?

[SBAndrews]

Advertisements, yes. In some occasions they will give you free stuff because they want to encourage people to actually purchase something in the future if they liked the product.

In the case of companies like Facebook and Google, most revenue is from advertisements.

[Sami]

Some companies use free products to have access to more audiance of more readers thus they can make money from advertising other products to a wider spectrum and charge for the advertising services.