So Over It: Free Stuff -- No, Thanks; We'll Pay

NEW YORK (TheStreet) -- How does Twitter make money?

Not only is there no clear revenue generator, its costs are certainly significant. Despite speculation to the contrary, the company denies getting a cut of text messages sent via the site and has, in fact, negotiated bulk rates for short message service traffic. Add in storage, hosting and payroll, and Twitter is a very expensive freebie.

Twitter is an amalgam of what is good and bad about the burgeoning "freeconomy." The site costs you nothing -- a definite drawing card. But can it remain successful and/or free if there is no cash cow to milk?

"People are making a lot of money charging nothing," writes Wired magazine editor-in-chief Chris Anderson in his new book, "Free: The Future of a Radical Price." "Not nothing for everything, but nothing for enough that we have essentially created an economy as big as a good-sized country around the price of $0.00."

But "free" is often a trick executed with smoke and mirrors. Free shipping is probably just factored into the price. A free trial requires a credit card and opting out can prove complicated. Online, there may be a push to move up to a "pro" version or for-profit intrusions, such as data mining and the sale of user information to marketers.

A free netbook, just for signing up for Verizon's(VZ Quote) or AT&T's(T Quote) broadband offerings? Well, factor in upwards of $60 a month to actually connect, and you've shelled out a baseline cost of more than $1,400 by the end of a two-year commitment for a $300 gizmo.