Conferences are magnets of attention from the business, blogging and tech communities so it’s no wonder that the Open Source Business Conference is the center of buzz on the internet. Wired wonders where in the world are the open source billionaires.

In 2007, some 30 open source software companies were purchased for more than $1 billion — double the number of sales in 2005, according to consulting firm 451 Group. And 2008 is proving to be even more frenetic. In January alone, Sun Microsystems announced the purchase of open source pioneer MySQL for $1 billion; open source development players Covalent and SpringSource merged; and Nokia agreed to pay $153 million for the open source mobile-software maker Trolltech. On Wall Street, bankers are rooting around for a good open source company to take public.

How can you build a business by giving away the store? The money comes from selling add-ons, service contracts, and hardware to go with the software. But that model works only if you master a couple of basics. Open source software makers have to win enough users that even the small percentage of customers who pay will generate a torrent of dollars. (Mozilla gets most of its money from Google, which pays to be the browser’s default search provider — something Google is willing to do because Firefox has so many users.)

Meanwhile, Benchmark Capital is capitalizing on open source business models noting that the "opportunities for the next generation of open source companies lies on identifying new problems (rather than moving into existing fields) and being the first to address them. Among other things, moving into a fresh market means you can start monetizing earlier, because you’re adding value sooner."

And that resonates with Funambol’s Capobianco description of open source business model noting that Software as a Service coupled with hosting, licensing or advertising may hold the key to make money with open source.