Homestead.com the Menlo Park-based company that wrote the book on hosting free Web pages is doing an about face to survive.

A three-page letter from company CEO Justin Kitch sent Monday asks Homesteaders (as they are sometimes known) to consider a move to a subscription-based model.

"We will soon be asking you to pay for your current version of Homestead Personal," writes Kitch. "You will still be able to build and maintain a site for free, with a new service called Homestead Personal Preview. Sites built with the Preview version will be restricted to: three pages, limited customer support, 8 MB of storage space, no use of the offline SiteBuilder, and no option to remove Homestead branding."

The response was quick and immediate.

"We've actually received more than 50,000 responses since last night," says Homestead PR spokesperson Jody Kramer. "The letters are split. Some people say they just can't afford to pay for something they got for free. Others realize that they should've been paying for something this great for some time."

Either way, the choice to move into pay-to-host mode is a massive undertaking. Homestead boasts 11 million customers, making it the largest user base yet to move to a subscription model. Napster may surpass this record once it unveils its subscription model.

Free Falling

With the collapse of the sponsorship market, Homestead says its free Internet services are becoming impossible to sustain unless they are severely restricted or neglected.

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"We refuse to let Homestead Personal become a second-rate service," says Kitch.

The changes are expected to take effect in about a month. However, current Homestead Personal members, will have an additional 60-day grace period to choose between paying for the new Homestead Personal or downgrading to the Preview version.

The brand new version of the offline SiteBuilder will include an option for removing Homestead branding from the pages, a new graphics library of more than 800,000 images, 25 MB of storage space, and priority turnaround time on e-mail requests.

Homestead is now waiting on its customers to let it know how much the company should charge for its new subscription and services.

And according to analysts, the death of many free service sites is not the worst thing that could happen for a company or its customers.

"In today's saner business climate, services that offer real quality are allowed to charge a fee that reflects the value of what they provide," says ASPnews.com founder Phil Wainewright. "Businesses respect that. They know that, at the end of the day, you get what you pay for."