Middleground alternative is to have a non profit behind the "free service". This works relatively well for some opensource critical resources like rubygems.org which has a foundation paying the bills, sponsored by companies. I think there are other good examples.
Problem is that social networks are hard to build, and tech people behind efforts like Diaspora, while they may understand the tech part, can't make something appealing enough for grandma or everage joe.
Problem is that social networks are hard to build, and tech people behind efforts like Diaspora, while they may understand the tech part, can't make something appealing enough for grandma or everage joe.