In this recession many consumers are discovering that real purchasing power is to pay nothing at all. chris anderson wrote all about it in " wired" magazine and is coming out with a book on the freebie nation and so is free the new black? tad smith is back with us along with keith ferrazzi along with ferrazzi green light. you've got free grand slam breakfast and dinners and free dugs from frooizer. >> free works from promotion. all marketing is generosity. trying to build a relationship with a consumer and if you lead with free you get permission to actually have a conversation to follow it up with what you real very to say, so starbucks gives away a free cup of cove on the day of election. they are talking about their values and talking about americana and they want to make starbucks related to that so it gives that you per miss and works as a trial. i'm not sure as a business model. >> tad, you know, on the internet, almost everything was free, and now 10, 15 years later, we come to see it's kind of a problem and people are having a hard time making money. >> that's true, and it's really important to see, dennis, that when things are free there's no such thing as a free lunch. business models suffer and people suffer and jobs suffer, and often it's not clear that there's real free in the value of the consumer. honestly, free can often not be the best price and as sort of odd as that sounds. >> well, tad, that actually makes a lot of sense coming from someone that sells advertising from my perspective, but you also -- >> a tough crowd there. >> but you have to recognize that giving away of free m & ms and content online, et cetera, without price, you know, is actually something that i call high touch marketing. we've got to get reconnected to the consumer, and that kind of intimacy, that kind of connectivity and reaching out in generosity i sympathy very powerful. >> well, there's no question, keith, that i think it's compelling to have free, but it's probably worth noting that free communicates value. a price communicates value, and when it's being given away for free, a consumer can be really questionable. >> you get what you pay for. >> not at all, not at all. discount would go say that thing isn't worth as much as it used to be, but if -- >> free says this thing ain't worth anything at all. >> everyone knows it's worth something. everyone knows it's inherently worth something so it's basically saying thank you. you're being damn generous to give me a gift. >> you and i both learned when we were young you get what you paid for. >> tad, were you never young. >> that's true. >> well, i've got to tell you on the whole free thing, i could see where it works for a company that's an upstart. it's way behind and no one knows who it is, but for m & m mars, one of the biggest chocolate titans in the world, for phizer making a drug that's number one in the category, i mean, i kind of wonder about the wisdom there when you are a world leader in the category. >> i'm not sure if you heard about the tfc debacle with the oprah giveaway. >> that was another free. >> that was a free that worked. you think of kfc as this gross and grimey or particularly good deep fried chicken, and their free was a particular meal which was a broiled healthy meal and they wanted to let people know you could come here and have that. that kind of promotion actually makes a lot of sense if you're repositioning. >> tad, do we have google to blame for this. google provides amazingly powerful software features that microsoft will sell to you and at google they just say, hey, you click on it and we'll get paid if you click on the ad and here's a bunch of free functionality. >> no, we have google to thank for this. the plain fact of the matter is that google is making the world's content organized in a reasonable way available for all of us to reach very simply on the internet, and the fact that they are figuring out new ways to get other people to pay for it is really a win for consumers, and we should all be thankful. >> you got like 100 publications you oversee, "variety," among others and you're taking paid subscriptions and tearing them up online free like everyone else did? >> we did have a period where many of them are free and many of the magazines that are free online now, but clearly we're reviewing all the business models as we go forward. we need to think about how the right balance of providing a great service for our customers and for our shareholders needs to carry forward. >> i think we'll see two new business models. i heard the word now and i think it might have been chris anderson the fremium so you start with free content and upgrade to a premium paid content and i think we'll start seeing that. i actually think that some of the other things -- well, let me stay with that. i like the fremium. >> heroin dealers from what i understand you give them the first hit or two free and they end up paying for it and the other stuff not addictive i really question whether your customers are going to end up being kind of ticked off. >> i think price communicates alol of value, dennis, and when it's free it says it's not worth anything, unless there's a catch and by the way we all know businesses are not out there largely as non-profits, there's often a catch. if the catch is something that gives consumers value i think we'll all buy into it and we'll do that happily, but anything beyond that you've got to look closely. >> let me thank you freely, tad and keith, for being here. much appreciated. >>> the internet gives away most all of its content free of charge, just talked about that, so is the net wiping out not just newspapers but the traditional broadcast networks? abc's late night talk show host jimmy kimmel thinks so and torched his own network trumpeting the new fall lineup to advertisers by telling the crowd, a bunch of advertising people that, youy know, the people that pay the networks so he can make his millions of dollars, that 90% of the shows that they were advertising at that event will basically be cancelled and he added every year we lie to you and every year you come back for more. you don't need an up front. you need their. we completely lie to you, and then you pass those lies on to your clients. the "new york times" said kimmel must have great blackmail photos of the network executives. that's the only way he's keeping his job. reese schoenfeld is co-founder of cnn and the food network and back with us cnbc contributor and "vanity fair" columnist