Web twist on an old model. And it's working.

Can you build a business on a foundation of free condoms?

Apparently so. An article in AdAge  (free registration required) points us to Gratis Internet, Inc. The company originated as a portal to obtain free condoms (freecondoms.com) and has moved on to loftier things such as www.freeipods.com.  They made Inc.'s 500 Fastest Growing Companies list this year coming in at number 18.

The model is simple. For example, at freeipods.com, you simply enter your email address and shipping information. Then you choose from a list of offers...these range from applying for a credit card to downloading free ring tones.

Next, you refer your friends to do the same. This forms a "conga line". As more of your friends sign up (remember Amway?), you get closer to your ipod and eventually receive one for free.

The 18-24 demographic has responded. Gratis is providing leads by the boatload to companies like CitiBank and Blockbuster. These corporations hire Gratis on a pay-for-performance basis.

Sound like your great uncle's pyramid scheme he tried to rope you into years ago? This new twist on an old model works because your friends, if they take you up on your referral, get something of genuine value. Plus you don't have to ride around selling cleaning products out of your trunk.