[nickadams]

Charging for your application is a big step -- you are making a statement that what you are offering is of value.

I think that if you can offer some premium lever of your software for a price, do it.

My company created billQ (http://www.mybillq.com). Now this is a VERY specific and simple app, but it is very well done (biased?). At first we offered it completely free. This came partly from fear. Is this simple app really worth charging for? After a few months, and a bunch of feedback, people were actually offering to pay us even though we weren't charging. We learned from this, and the latest version now has a premium level that has more features and costs a small amount. And people pay for it.

Most people aren't not going to use your product because of the price, they are not going to use it because it a) isn't useful to them, or b) it sucks. The onus is on you to make the value match the price.

If at all possible, charge for your product. It will not only bring you better customers, but it will provide you with the resources to invest back into those customers. And this is something they are more than willing to pay for.

I would hope more companies put a value on their products. Web apps shouldn't be just commodities in the same way desktop software is not. If everyone relies solely on ad revenue, there will be a lot of cash-flow starved companies out there.