Releasing a book as a free download isn't newsworthy in and of itself. It was, once upon a time, especially when that book had the backing of a major publisher.
Which is not to say that free downloads have no role when it comes to promotion, publicity and marketing. Their main effect is to magnify any good feeling your book has generated, by making it simple for people who love the book to get it under the nose of their social circle.
I've had readers email their friends the whole book with a choice titbit at the top, "Doesn't this remind you of ...?" or "I knew you'd go crazy for ..." Ebooks are small: they're text-blobs. One reader pasted a copy of one of my novels into a mailing list with 60,000 like-minded (I hope) souls on it.Booksellers – I'm a former one myself – know that personal recommendations from friends are the best way to sell books – better than reviews, better than covers, better than store-placement. A publisher's publicity and marketing for a book is an excellent way to get it into some readers' hands, and the word of mouth enabled by freely copyable ebooks then acts as a force-multiplier to expand the publisher's efforts. Whether your "natural" audience is small or large, free downloads generally expand it, by letting readers make informed guesses about who else will like it, and giving those readers a persuasive tool for closing the sale.