How does a free webapp earn money?

I saw a lot of web applications today that are free to use. Any idea how they earn money? Aside from ads, of course.

There are plenty of web applications that are free to use, and don't make any money at all.

If they don't offer premium (paid) subscriptions, there are still a few ways to make money

• ads, as you noticed; it is the most intrusive, and probably less efficient way
• affiliate sales or "soft sales"; it's still advertisement, but less evident and arguably more efficient, since links pointing to external websites or ecommerce sites are usually contained in articles or blog posts, and not isolated in the "advertisements" area
• a few websites (f.i. Hunch.com ) claim they might resell user-generated data or analytics to external companies; of course you need a lot of users (millions to ten of millions, I guess), and I'm not really sure whether there is any company at all actually relying uniquely this business model

Here are a few ways:

1. Ads as you said.
2. Free products that relate to paid service. They help generate paid users or help build credibility for the company. An example would be AddThis.com which is owned by ClearSoring.com.
3. Building a product that starts as free and then releases a paid version.
4. Building a product that they want to sell to a company that will build a monetized version.

In addition to the two good answers provided, there is also the support/service model: the app, per se, is "free" - but support or services around it cost money.