My first taste of this sort of thing (if you don't count illegal .mp3 downloading) was Doctorow's Little Brother. He made available the free version, which I devoured and then purchased as a present for my husband. The free-book-promotion worked on me: it is the only reason I purchased the book. (Likewise, most of my illegal .mp3 downloads led to a purchase--if I tried it and like it, I bought it.)
Doctorow is still, in my opinion, the expert on this. As he says,
For me — for pretty much every writer — the big problem isn’t piracy, it’s obscurity (thanks to Tim O’Reilly for this great aphorism). Of all the people who failed to buy this book today, the majority did so because they never heard of it, not because someone gave them a free copy.
And that's true. I'm living proof that free-downloads-lead-to-sales.
But, is it viable? Is it a good marketing tool? Doctorow is a pretty well established author, and his free download policy is promotion in and of itself. Gratz and Konrath are giving away previously released titles to promote a new current release. Unpublished authors use free e-books to establish a readership for future books with no guarantee that any future book will be published.
I turn the questions to you (and I'm really eager to hear your reponses, so please share!):
Is giving away a free electronic version of a book a good marketing tool--does it lead to more sales?
Does it work better for established, developing, or unpublished authors? How?
Should free electronic versions of books be universal practice for all authors?
Does it work better as a promotion for a new release (which seems to be the standard) or in a creative commons licensing setting where all work is available for everyone free?