Microsoft's Software Philanthropy: The Goodwill Ploy
They're going after markets that don't have much money in the first place. They realize internally, though would never admit, that giving away software to people who wouldn't buy it otherwise doesn't cost them money. Externally, they'll say how they're doing such good things, and say how "We gave away a billion dollars in software last year.", but that wasn't a billion dollars that they could have had otherwise.
This is basically the same as the RIAA giving me a bunch of MP3 files of music I wouldn't have bought anyhow and claiming they gave me a thousand dollars of music.
Or like me saying I have a baseball card that's worth $100,000. It's only worth that if someone will buy it. If no one will buy it, then it's a piece of cardboard with a picture on it.
The moral of the story is that they're giving away something that costs them nothing to a market group that wouldn't have bought their stuff otherwise, and keeping Free software out.