Who wants free books? You look like you do. That girl over in the corner looks like she does. That guy in the back who's chewing gum and talking on his cell phone isn't paying attention, but he probably wants free books, too. I know I want free books.
You may notice on our sidebar a link to science fiction texts at Project Gutenberg, which collects public domain and Creative Commons-licensed texts on the Internet. In particular, I notice they have a link to Nick Mamatas's Move Under Ground. I strongly suggest you stop reading this post and start reading that novel, seeing as how it is much better written and has the potential capability of, like, totally blowing your mind.
Cory Doctorow makes his books available on the Internet and writes in Forbes that he believes it paradoxically causes them to sell better. Doctorow also notes that science fiction is more frequently copied illegally than any other form of literature and argues that anyone well-known enough to be ripped off is probably doing alright in sales and marketing. Snuffles, who is sitting across the room, has just pointed out that, back when anime was more obscure in the U.S., fans got the word out largely by ripping off their favorite shows and movies and passing them around.
Recently, the publishers Tor and HarperCollins have announced that many of the books they sell will be publicly available on the Internet. Tor appears to be doing this in a limited fashion and demands that people who get free books also get Tor's newsletter, as reported in FantasyBookSpot. Tor's website for the free book sign-up is here.
The Huffington Post has reported that HarperCollins, too, is making books available free online in the hopes that it will encourage people to buy those books. A visit to the HarperCollins website reveals that it's true. Doesn't look as though they're demanding newsletter subscriptions, either.
So what's the point of making books available online? Well, in the case of public domain texts, the copyrights have run out and the books are fair game, but as for the others, the publishers and writers are guessing--and Doctorow suggests they're guessing correctly--that many or most people would still rather read a book on paper than on a screen, so after seeing a chapter or two of a novel they might like, they're likely to buy the physical book.
Update: Jeff Miller of The Curt Jester has just pointed me to the Baen Free Library, which has plenty of Baen titles to choose from.