Basically, a free membership site is a site where the user is not charged a membership fee to use the site but is required to supply their e-mail address, choose a username and password to enter the site, participate in the discussions and activities. Sometimes free memberships are limited to less useful information or access while paid memberships have full access.
A large entity like MSN, for example, allows members to access most things on their sites without the need for any sign in procedure at all but, in order to join a group, you must supply your email address, choose a username and a password. The use of the site is still free. However, to use MSN as your ISP or to gain enhanced email resources you will be required to pay for it.
In the same way, an individual might start a free membership website. There would be no charge at all to access the site. To gain access to limited information would require supplying an email address, choosing a username and a password. To gain full access to the site would most likely require payment if the information they are providing merits a fee. Some sites never charge a membership fee and rely solely on selling their own product or promoting products produced by others as a source of income.
Free membership sites very rarely, if ever, supply information that you couldn’t easily acquire on the Internet yourself. An individual who sets up a free membership site doesn’t do it for free so they will be planning to make an income in some way. Usually, free membership sites are for the purpose of selling a product or service. Some information will be provided but supplying information is not the main objective.