Facebook to Charge?
03/25/09 03:42 PM Filed in: Technology
That’s the rumor. After
all, it’s the thing to do, right? Look at other
mammoth companies that used to provide a service for
free but now charge for their services: MySpace,
YouTube, Google, Xanga, Wikipedia, Hulu ... Oh, wait!
All those services are still
free.
They’re add supported, so they will always remain
free.
Even still, people continue to prove their gullibility by falling for such silly rumors, even when the people spreading the rumors don’t even attempt to give a reasoning or source for their claim. I was astounded to find that, as of today, over three million people are concerned that Facebook may become a Premium Service. Even more astounding, the groups have absolutely no solid evidence for this claim, not even evidence that suggest it, yet still people fall for it. They list links or sources of any kind. They don’t even provide reasoning for the suspicion. I’m actually quite convinced that the people who start these groups just didn’t want to title them, “LET’S SEE IF WE CAN GET 5,000,000 PEOPLE TO JOIN THIS GROUP!!!”
I’m here to firstly illustrate why your Facebook Premium cries are ridiculous and then to prove you wrong.
Firstly, you’re using the service you’re threatening to boycott in order to promote your boycott. This is almost as hypocritical and nonsensical as those “We Hate Facebook” groups that are on Facebook. People, do you think before you speak and/or act?
Secondly, your solution to let Facebook know how much you disapprove of this idea is to get as many people as you can to not use Facebook for a day. You know, this isn’t actually a bad idea if you extract it from the fact that you think Facebook is going Premium. It might really benefit all of you if you got out into the sun and participated in true, face-to-face social activity. But even if you did convince three million people to not use Facebook for an entire day, this would most likely accomplish exactly the opposite of what you wanted. Allow me to explain:
Three million people don’t log onto Facebook for a day. Facebook is currently a “free” service (to you) in the sense that all of it’s monetary gains are in the form of ad revenue. A lack of three million users will result in less people clicking on their ads, resulting in less ad revenue for them for that day. While one day of this won’t make a significant difference, a recurring trend of this would cause them to look at alternative business models. Facebook is an actual company, which means they do need to make money, believe it or not. That aside, users are on and off Facebook all the time, probably for days at a time. Even if a blip like that did occur in the site traffic for one day, Facebook would most likely disregard it.
Thirdly, you’re threatening to leave Facebook if they make their service Premium. Really, guys? You don’t think you need Facebook? You who think it would be significant if you didn’t log on to the service for one whole day? You who promote this idea on the very service you’re threatening to leave? You know, you waste countless hours on the site, why not give them a few of your dollars too? I mean, they’re giving you a very extensive and labor intensive service absolutely free.
But Facebook is looking for a business model. Translation: they need a consistent way to make money. Ad revenue is fairly consistent, and quite substantial considering there are 100 million of us that use the service on a regular basis, but even Google, who started their service creating income solely based on ad revenue, now sells products to generate consistent revenue.
Let’s imagine for a minute that Facebook does choose a Premium Service as their business model. Let’s imagine in that choice that Facebook limits the free service to ten status updates per day, photo albums of no more than fifty pictures, and a friend limit of 200 unless you pay them a monthly fee. If you pay them a monthly fee, the limits are lifted and, of course, all ads are taken away. This is called a Premium Service. Even if you were starkly against this, there’s no real way you could fight this, even with your three million strong groups. I believe many of you think the term “Premium Service” means “free version goes away,” but that’s simply not true.
Continuing to imagine, let’s say Facebook charges each user $5 per month for the Premium Service. That means they’ll be making $60 per person per year. Facebook currently delivers to 100 million users for free, so even if 95% of these users don’t value the service enough to pay a measly $6 a month for its full functionality, that still leaves five million Premium Service users. Five million Premium members paying $60 a year to Facebook generates them a revenue of $300 million. With this new income from the Premium members combined with the ad revenue propagated from what’s left of the other 95 million users, Facebook will still be generating far more income than they did before. And those of you who were too snobbish to accept a limited service and refused to actually pay for something you use? Facebook wouldn’t even miss you.
This won’t happen anytime soon, because Facebook currently makes proper figures from the ads on the right that you consistently click on. The people who think it will don’t truly understand the limitless possibilities of an innovative website idea (i.e. Google) and financing it with ads due to the heavy traffic. Facebook has been estimated to be worth upwards of $15 billion dollars. While some say this estimate is too high, it still illustrates that they don’t need to charge for their service.
All of this is completely irrelevant once you consider Principle #7 in The Facebook Principles: “Facebook is a fundamental service.” This being the case, and immediately following that statement, they further explain, “People should be able to use Facebook for free to establish a presence, connect with others, and share information with them. Every Person should be able to use the Facebook Service regardless of his or her level of participation or contribution.”
According to Facebook, The Facebook Principles are the rights and responsibilities of each user, and The Facebook Principles are not subject to change at the whim of the Facebook staff. They are the foundation of the service, and they are not subject to change now, or anywhere in the near future. If they do change, it will only be for the betterment of the users. Hard as it may be to believe, Facebook isn’t actually out to get you.
Even still, people continue to prove their gullibility by falling for such silly rumors, even when the people spreading the rumors don’t even attempt to give a reasoning or source for their claim. I was astounded to find that, as of today, over three million people are concerned that Facebook may become a Premium Service. Even more astounding, the groups have absolutely no solid evidence for this claim, not even evidence that suggest it, yet still people fall for it. They list links or sources of any kind. They don’t even provide reasoning for the suspicion. I’m actually quite convinced that the people who start these groups just didn’t want to title them, “LET’S SEE IF WE CAN GET 5,000,000 PEOPLE TO JOIN THIS GROUP!!!”
I’m here to firstly illustrate why your Facebook Premium cries are ridiculous and then to prove you wrong.
Firstly, you’re using the service you’re threatening to boycott in order to promote your boycott. This is almost as hypocritical and nonsensical as those “We Hate Facebook” groups that are on Facebook. People, do you think before you speak and/or act?
Secondly, your solution to let Facebook know how much you disapprove of this idea is to get as many people as you can to not use Facebook for a day. You know, this isn’t actually a bad idea if you extract it from the fact that you think Facebook is going Premium. It might really benefit all of you if you got out into the sun and participated in true, face-to-face social activity. But even if you did convince three million people to not use Facebook for an entire day, this would most likely accomplish exactly the opposite of what you wanted. Allow me to explain:
Three million people don’t log onto Facebook for a day. Facebook is currently a “free” service (to you) in the sense that all of it’s monetary gains are in the form of ad revenue. A lack of three million users will result in less people clicking on their ads, resulting in less ad revenue for them for that day. While one day of this won’t make a significant difference, a recurring trend of this would cause them to look at alternative business models. Facebook is an actual company, which means they do need to make money, believe it or not. That aside, users are on and off Facebook all the time, probably for days at a time. Even if a blip like that did occur in the site traffic for one day, Facebook would most likely disregard it.
Thirdly, you’re threatening to leave Facebook if they make their service Premium. Really, guys? You don’t think you need Facebook? You who think it would be significant if you didn’t log on to the service for one whole day? You who promote this idea on the very service you’re threatening to leave? You know, you waste countless hours on the site, why not give them a few of your dollars too? I mean, they’re giving you a very extensive and labor intensive service absolutely free.
But Facebook is looking for a business model. Translation: they need a consistent way to make money. Ad revenue is fairly consistent, and quite substantial considering there are 100 million of us that use the service on a regular basis, but even Google, who started their service creating income solely based on ad revenue, now sells products to generate consistent revenue.
Let’s imagine for a minute that Facebook does choose a Premium Service as their business model. Let’s imagine in that choice that Facebook limits the free service to ten status updates per day, photo albums of no more than fifty pictures, and a friend limit of 200 unless you pay them a monthly fee. If you pay them a monthly fee, the limits are lifted and, of course, all ads are taken away. This is called a Premium Service. Even if you were starkly against this, there’s no real way you could fight this, even with your three million strong groups. I believe many of you think the term “Premium Service” means “free version goes away,” but that’s simply not true.
Continuing to imagine, let’s say Facebook charges each user $5 per month for the Premium Service. That means they’ll be making $60 per person per year. Facebook currently delivers to 100 million users for free, so even if 95% of these users don’t value the service enough to pay a measly $6 a month for its full functionality, that still leaves five million Premium Service users. Five million Premium members paying $60 a year to Facebook generates them a revenue of $300 million. With this new income from the Premium members combined with the ad revenue propagated from what’s left of the other 95 million users, Facebook will still be generating far more income than they did before. And those of you who were too snobbish to accept a limited service and refused to actually pay for something you use? Facebook wouldn’t even miss you.
This won’t happen anytime soon, because Facebook currently makes proper figures from the ads on the right that you consistently click on. The people who think it will don’t truly understand the limitless possibilities of an innovative website idea (i.e. Google) and financing it with ads due to the heavy traffic. Facebook has been estimated to be worth upwards of $15 billion dollars. While some say this estimate is too high, it still illustrates that they don’t need to charge for their service.
All of this is completely irrelevant once you consider Principle #7 in The Facebook Principles: “Facebook is a fundamental service.” This being the case, and immediately following that statement, they further explain, “People should be able to use Facebook for free to establish a presence, connect with others, and share information with them. Every Person should be able to use the Facebook Service regardless of his or her level of participation or contribution.”
According to Facebook, The Facebook Principles are the rights and responsibilities of each user, and The Facebook Principles are not subject to change at the whim of the Facebook staff. They are the foundation of the service, and they are not subject to change now, or anywhere in the near future. If they do change, it will only be for the betterment of the users. Hard as it may be to believe, Facebook isn’t actually out to get you.