This is wise advice given by Phil Davis, book promoter extraordinaire, and I though I'd share it with you. He says... "When I published my first book, Fast & Furious Book Promotion, I was against giving it away for free. As a business person, giving away free things just didn't seem to make sense. But when one of my customers, Dr. Bill Guillory, and I teamed up to write How To Become a Total Failure: The Ten Rules of Highly Unsuccessful People, (http://www.tenwaystofail.com) Bill insisted we give away 500 hard copy books and 5,000 ebooks. Needless to say, Bill was right. Within a month of self-publishing How To Fail, we had a publisher in Germany who bought the rights to the book and we were in discussions with a US publisher. What happens when you give away copies of your book is you jump-start the conversation about your book. And when people start talking about it, you never know who might hear about it. Remember the term market influencer from an earlier tip? The result you want when you give away free copies is to get market influencers to start talking about your book. (or buying the rights to it) To get noticed in this over-crowded marketplace you need to be aggressive. I have no rule-of-thumb regarding the number of books to give away, but the numbers Bill and I used worked for us and might work for you as well."

OK, I posted that because it's sound advice from someone who knows, but the reality of it is... how many authors out there want to give away so many books? This is a decision that each author needs to think twice and three times. there are many authors that have the funds available to purchase extra books to be given away, but let's face it... those are not the majority.
I believe that if an author can afford to give away between 50 and 75 books to those he believes will be able to spread the word, he should. Among those people that will receive free books are reviewers from different newspapers and magazines because their word carry and, as Phil says in his article, who knows who will be reading the reviews?
At any rate, I wanted you to hear from someone who has been giving advice to authors for many moons and see how HE does it.
Good luck!, and remember to place your comments here so we can pass them on to other authors.