Flickr follows a 'freemium' business model, as do many apps and games

'Freemium' is a new word to me, but its meaning was instantly clear from the context when Michael Arrington, the heavyweight tech blogger and founder of TechCrunch, wrote:

Freemium business models are always hard. You have to give users enough for free that they try your service out and get hooked. Then you hit them with fees for upgraded features that make it even better. With a perfect product people don’t mind paying because they feel like it’s good value.

The main thrust of the article, though is that Flickr is more of a hostage taking model than a freemium model. I tend to agree, but unlike Michael, I do not mind using Flickr. In the meantime, thanks for teaching me a new geekspeak word.
Come to think of it, almost all "free" Facebook and iPhone apps of any renown follow the freemium model. It's good to be able to put a catchy jargon term to a universally recognized phenomenon.