Paying to socialize?
Tech.blorge, one of the blogs on my RSS feeds, recently published an entry titled “Would you pay to use Facebook“. They are echoing some of the ideas raised as a reaction to rumors that Facebook, which raised half a billion dollars less than two years ago, is running out of cash. One of these ideas is subscription-based Facebook, meaning you will have to pay for accessing the website.
Right now this sounds more like a speculation, but it looks like the Russian social networking websites are actually experimenting with the subscription-based models. I wrote in the past about the various ways Odnoklassniki.ru is monetizing on the social aspects of online social networks. Recently, my father pointed out an item (RU) in the one of the Russian-language new websites, which states that Odnoklassniki is now requesting payment from new users asking to register. According to this article, the registration now will cost between $1-2. Those who choose not to pay will not be able to view other people’s profiles, contact other users, etc. In other words the free registration is lacking any of the “social” elements, which is the main reason for people to join.
I looked a little bit around and there are more news items about that move in RuNet. The official rationale stated by the Odnoklassniki management is that the paid registration is aimed at combatting spammers, who tend to open numerous accounts and use them for promotion of their products. Some of the critics disagree (RU), suggesting this is just a way for Odnoklassniki to force the spammers to share their profits from the network.
In any case, it will be interesting to see whether or not the paid registration model will turn out to be sustainable. Probably Facebook crew and others will be watching as they think about their next move. In the meantime, I do wonder if you would pay to socialize online?
I’ve been paying to LiveJournal for at least three or four years. The paying customers didn’t recieve any benefits to justify it, just little things like extra userpics. So, my primary motive was to support a project I liked.
Regretfully, they sold the project, and the current administration is stupid and greedy. I guess that when the subscription runs out, I will just figure out a way to reliably cut the ads out.
Thanks!
I think the power of Facebook comes from the fact that everyone is on it. There is no “killer feature” apart from that.
If they start charging, then clearly not everyone would be on it, thus they will loose the only think that keeps them going.
It seems that the models today go towards giving the service for free. But charging for the extra-powerful features. Take Red Hat for example (any non-free Linux for that matter), or WordPress and many more.
How can Facebook be running out of money?
It is a business model that ‘feeds’ on itself. With millions of user’s and the ability to utilise ‘targeted advertising’ MUST place FB above the rest in terms of revenue.
Also, I notice (note: even though i use FB, i am not familiar with many of its features) that when i type a message to my friend, FB scans keywords and includes a spiel about it at the end of the message. I can only assume that these keywords are paid advertisements.
For me, this raises an even bigger question.
Privacy.
You are right, Davor, that FB has a steady flow of income from its advertising business. In fact, I remember seeing something yesterday about that, but did not have a chance to take a note of that. I think it was related to the recent Web 2.0 Conference; I think they talked about it there.
Anyhow, the fact that they have a good flow of advertising income, does not mean that it covers all their costs. Running an operation such as Facebook is a really expansive business. Just think about the costs of servers they need to run this platform or about the cost of electricity needed to run those servers. And there are many more costs involved.
Here is a link to my older post going slightly deeper into the economics of FB. Frankly, my post is not as good as some of the posts I am linking to there. If you are interested, I would suggest spending a few minutes exploring those. I think it’s fascinating!
Спасибо за пост! Добавил блог в RSS-ридер, теперь читать буду регулярно..