[Gandalf]

I was thinking the same thing, Fanatic. Animoto looked pretty cool, and they don't use advertising at all. Yet according to their founder, they get a pretty decent conversion rate of people upgrading to the paid service.

I think there's room for this in a lot of areas, but it needs to be done with caution. MSN kinda tried this with American Greetings, selling display pic and emoticon packs. They didn't charge much, but I don't think it went over well, since they are free now. Maybe the key users didn't have an easy way to pay for them?

That's one thing that the cell phone companies have going for them. You can "buy" things without really paying for it at that moment. It just shows up on your next bill. That's the easiest way to make micropayments work. Have an existing account where you can easily charge for little increments.

Xbox Live does this as well, with their Points system. Some of the downloads are free, and some cost "points" (which do not directly relate to dollars). Points have to be purchased in blocks of 500 or more, so mom and dad can "gift" their kids with points to use, and when they're gone, they're gone. It's another good example of micropayments that seems to work.

I can't think of too many other examples, although I've heard that in in Japan, you can even use your cell phone to make purchases at vending machines!