Ask HN: Could a free, ad-supported SaaS app work?

I ask this mainly because I have a SaaS application that I launched in 2009 and has been stagnant in growth for a while now, and I just can't put in the amount of hours to catch it up to speed with the current competition.

Since putting a ton more work into it isn't an option for me right now, the alterative options I have considered are:

1) Selling it 2) Sunsetting/Closing it 3) Transitioning it to a free ad-supported SaaS app

In particular, (3) is an interesting option to me, because I'm not sure I've seen it done with a SaaS app before. It could be an interesting experience. Thoughts?