Huge websites, such as Google, thrive on "free" programs and services. You might wonder how they stay in business until you use one of Google's free services and become aware of its total saturation with advertising. Giving away something free is still a form of advertising. Turning to genealogy, we find the same methods of advertising. Ancestry.com has several "free" databases as to do many of the other commercial websites. The unspoken, yet obvious, conclusion is that if you use their "free" services you will be enticed to use their subscription ones. This is also the basis for the collection of "free" commercial subscription websites available at the FamilySearch Centers (formerly referred to as Family History Centers).
Of course, the free government websites are anything but free. They subsist on taxpayer dollars. But what about the privately operated "free" websites such as Archive.org and FamilySearch.org? Are they truly free? And if they are free, what are they promoting? In the case of FamilySearch.org, the answer is both complex and quite simple. The Church of Jesus Christ of Latter-day Saints is promoting family history as a tenant of their (our) religion. Again, the site and the records are only free because they (we) choose not to make make money from the site. But when there is a considerable expense to provide a service the Church will charge, as shown by the cost of renting microfilm copies of the records from the Family History Library.
In the case of Archive.org, the free nature of the site comes as a result of the philosophy of the owner/innovator Brewster Kahle. There is a particularly telling quote from Wikipedia, referring to Kahle:
He states the digital transition, thus far, has gone from local control to central control, non-profit to for-profit, diverse to homogeneous, and from "ruled by law" to "ruled by contract". Kahle states that even public-domain material published before 1923, and not bound by copyright law, is still bound by contracts and requires a permission-based system from Google to be distributed or copied. Kahle reasons that this trend has emerged for a number of reasons: distribution of information favoring centralization, the economic cost of digitizing books, the issue of staffing at libraries not having the technical knowledge to build these services, and the decision of the administrators to outsource information services. See Wikipedia:Brewster Kahle.In response, the Internet Archive or Archive.org has started the Open Library which has pages for over 20 million books and over 1 million of those give access to a full-text downloadable version.
So does free compete with the subscription based companies' offerings? That is a complex question and one I come back to from time to time. The answer is yes and no. It is hard to find an analogous situation outside of the Internet, but let me try. Let's say I want to go to a park. I can do that anytime I want to for free (courtesy of my local government). Should my park wanting desires be fulfilled by visiting one of the free parks, then I guess I am satisfied. I might add that we have some pretty elaborate free parks in the area. But does the existence of a free local park keep me from visiting Disneyland or Universal Studios? No, but distance and expense do. Can the local park be said to compete with Disneyland? Not really. If I wanted the Disneyland experience, I would pay the price notwithstanding the distance, travel time, lodging cost, entrance fee and food cost.
Do Disneyland and Universal Studios compete with each other? Do Ancestry.com and WorldVitalRecords.com compete? On one level they could be considered competitors, but usually the reason for choosing one over the other is not a matter of competition as it is a matter of personal needs, personal interests and personal preference.
Should all genealogical information be "free" as a matter of principle? Much of what we have today from all of the online services would then be unavailable. It is only because some people can make a profit selling genealogical services that those services are made available. The system we have now, for all of the criticism which could be leveled at it, works tolerably well for a large number of people.