Free hosting providers do not close because the economy is bad. Free hosting providers close because they are mismanaged. They give away too much resources (unlimited is the term we are looking for), put no limitations in place and then find themselves in trouble with spammers, warez distributors. Their hosting bills skyrocket and they simply close doors because it is an easy way out. In some cases, however, they get shut down by an upstream provider for too much abuse complaints or other legal reasons.
As far as Geocities, a brand owned by Yahoo! I believe, I think it was the company's own decision for a while now. The service, while popular, has probably not been performing very well and if anything, attracted all the same wonderful people, but mostly SEO spammers who used Geocities to build up hundreds of pages of fake pages to enhance their own or their clients' search engine efforts.