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While it's been met with skepticism, has added 10,000 subscribers in its first year and some are finding value.

When Coit Staffing Inc. began exploring as an alternative to, executives knew they couldn't argue with the price.

As it turns out, they couldn't argue with its functionality either.

"First of all, we look for functionality [in an application]," said Tim Farelly, president of the San Francisco staffing and recruiting company. "It doesn't matter what the price is, if the product doesn't work, it's a waste of time."

FreeCRM proved to be easier to navigate and use, and had better graphics, Farelly said. Additionally, it clearly beat its cross-town rival on price. Finally, ASP CRM Inc., the company which offers, tailored its product to fit Coit's needs by enabling the staffing company to upload résumés to the site.

In the year since it formally launched, has grown to 10,000 companies and 29,168 people using the application. Targeted at small- and medium-sized businesses (SMBs), uses advertisements to pay the bills. In fact, Coit Staffing is an advertiser. It also offers a not-so-free-CRM paid edition for $9.95 per user per month, which comes with 1 GB of file storage, live support, a 99.9% uptime guarantee and no ads.

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Skepticism from the analyst community remains, however.

"It may have some limited appeal," said Laurie McCabe, vice president of SMB business solutions for New York-based Access Markets International Partners Inc. "People who are going to use that low-end an application, what are they trading up from? ACT!, which costs all of $79 a box?"

Nexgen Software Technologies Inc., in Naperville, Ill., has been using the paid version for the past four months and is still evaluating it with three users.

"We've had to tweak some of our processes to fit the software and that's not a bad thing," said Alwyn Francis, vice president of services. "One of the key things for us was access via the Internet so internally we don't have to develop a big infrastructure."

Nexgen had to create a few work arounds that it has since done away with as FreeCRM has matured, Francis added. The free, Web-access application has also allowed Nexgen to extend the CRM system to an outsourced telemarketing agency that can easily access the database.

A free CRM tool, ads or no ads, has also served the Kansas City chapter of the U.S. Green Building Council, a non-profit that promotes environmentally friendly building construction. Stacy Ernst, the membership chairman for Kansas City, has been using it for about two weeks to track membership and bill payments and has been happy.

However, she has had issues exporting content from the site, a concern if a new membership chairman wants to switch applications in the future.

CRM ASP's financial viability may be the biggest danger for users of its software. Just this week, software giant Microsoft announced plans to bolster its offerings for small businesses with its Magellan release next year. Additionally, established vendors like Intuit Inc. in Mountain View, Calif., maker of Quickbooks, and Best Software Inc., of Irvine, Calif., makers of ACT!, already have a firm foothold in the SMB market along with myriad hosted vendors.

"It's really hard to get that model to work," McCabe said. "We saw a lot of that in the dot-com era, even during the best of times it was a tough thing to make a go of it."

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