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Free hosting service from paid hosts

Noticed some hosts to offer free hosting alongside their main paid service. Usually the free hosting of paid providers has more advertising meaning, than practical importance, as paid providers will never set any free service better than paid one.

Mainly free hosting has a lack of functionality, being, for example, unable to use top level domain, giving a subdomain or even just a folder under their own domain name.

I wonder, how reasonable is offering free hosting service for paid hosting providers? Is this advertising method efficient enough to open the direction if it is not used yet?

What do you think?
 
I'm a paid host who offers free hosting. As a rule of thumb, I'll provide the smallest plan (2GB of space and 10GB of Bandwidth) free of charge to those who request free hosting. Those people also need to provide good justification for the free account. Student, blog, non-profit, new company, etc. By offering free services ALONG with paid, I can provide my free clients with a full unrestricted account just like my paid clients have. Revenue from ads is not needed and I do not require any action on the part of the client. At this time, I have a mix of appox 25% free and 75% paid clients. It's worked out fairly well. A good amount of free clients do in fact purchase a paid account after they've been aboard for a while.
 
It can also be a good 'sample product' to prospective paying users, with a decent conversion rate it helps a paying company grow their business. Some will never progress their site beyond just a small free package but some will catch the 'bug' and want more :) you just have to give them the chance and the service.
 
t can also be a good 'sample product' to prospective paying users

Have always been thinking this is the main objective of free accounts at paid hosts. However do not see any reasons in this. More efforts for not too much profit. Economically unreasonable to my mind.
 
I'm no expert, but in my novice mind I see Free Website space as a logical addition to Paid Website space, like allowing those who want to do Websites a sandbox experience before they go for the real thing. It's a two way street as well. The newbie gets an opportunity to get familiar with the Web host and the Web host gets to know the newbie. For some Website hosts this also provides a source of business, i.e. hopefully some of the newbies will subscribe for paid hosting. And then of course free website space attracts plenty of Website activity, so for someone who may be starting this service for the first time it brings much needed traffic to the site as well.
 
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