Facebook users can afford to pay

Charging a flat fee for using Facebook would be a doomed policy- no matter how nominal the fee, users would flock in droves to competing networking sites.

Most people just don't want to pay to go to web-sites. So much of the web is free pay-to-use sites almost always fail.

Inevitably a "new facebook" would arise and crush the dominance of Facebook.

Facebook has the right idea by planning on a premium version and/or getting revenue from other sources.

Facebook is a cute idea... If it's free for the user. Why would anyone pay a fee for this. It's definitely something one can live without as it really doesn't add any value to one's life.

I've saying they should charge for over a year. One dollar a month to start. Makes good sense and even if only half paid, it's still $150 million in revenue a month. What's the hold up Facebook. Do the math and it just makes good business sense. IHMO

There is a facebook group "we will not pay to use facebook" with 5.2 million members, essentially saying "if you charge, we are gone".

Facebook does not control the users, the users control Facebook. If the company tries to change this fact, they will fail.

Facebook better improve its platform before it considers charging. They have far too many issues with both their primary database and peripheral apps to even consider charging a fee. This is another one of those "sounds good on paper" ideas that Corp. America is great at...it sounds fab, until they launch it and it flops.

When you have so many people that shiver when hearing the name of Facebook, I highly doubt it'd be anything more than some luddite people paying for services while trying to keep in contact with "those in the know"... all the while being the laughing stock of us all :)
It's so cute.
All Facebook ever will be is a overglorified micro-blogging site with connections between micro-blogging sites.

What teenager wants to spend money they don’t have on a social networking site. Advertising will easily suffice for revenue. Just look at the information being put on to facebook, they write what are having for dinner for god sake, over the top as far as I am concerned but think about such targeted ad revenue.

Imagine a user complains about thier phone company - this can then be used to display targeted ads. Its like they are listening to every thought users have. Now thats power!

Once the genie is out of the bottle, you can't ever put it back in. Charging users would be suicidal and the folks at Facebook have already shown themselves to be much too smart for that.

Facebook is sitting on a mound of data that will be useful to marketers once they figure out how to parse it and present it. FB will be the petri dish of a more powerful era of micro-targeted marketing. Someday we'll look back on traditional advertising as just so much spam and wonder why FB didn't come along sooner because it makes so much sense.

@CarriBugbee

I would certainly consider paying for their services. After all, nothing is for free and it's apparent that if no one pays for this service, it and others like it will eventually go away.

I am one of the 5.2 million users who would bolt immediately if FB charged. FB is nice and all but in no way adds to my life enough for me to part with money over it. Even $1/month could be better spent elsewhere.

The problem with this idea is the negative network effect.

If a big chunk of the user base ends up not using it because you have to pay then that weakens the value of FB for the remaining users, which will reduce their willingness to pay, causing them to leave, which will reduce the value of the network for the remaining users, which will...

You get the picture. FB grew because of network effects and it can shrink for the same reason.

I am a contrarian, my bet is that other networks will arise to replace FB.

nope, sorry. charging users would lead to the demise of the site. I for one would just jump to twitter bc it's free. No one will pay because competitors offer a similar service for free. Just like charging for the news would fail, this idea would most certainly fail too.

---There is a facebook group "we will not pay to use facebook" with 5.2 million members, essentially saying "if you charge, we are gone".---

5.2 million out of 300 million. Hmmm... don't let the door hit your ass on the way out - see ya.

I think people would leave and leave fast. It's low barrier of entry (free) is part of why it's so popular.

A users group with more then average spending power doesn't mean that they are prepared to pay.
Question: what will happen when half of your friends pay and half don't pay?

what's funny to me is how myspace is looked at like a 2nd tier social network now.....im efinitely well off (i have money to spend) and i spend way more time on twitter and myspace....and i fall into the age group of 18 to 24 year olds.....

in that age group myspace is still the most dominant site...checkalexa, check quantcast if u dont believe me.......

facebook will fade with the old people that use it.......

O and just so we're on the same page, i signed up for Facebook before i had a myspace page....this was in 2005 ....

i wont have to make the decision to pay or not to pay bc my facebook account has been deactivated for over a year now......=-)

facebook was pre 2008.......twitter is IN!!!!

i think facebook more funny when free.

Best Picture

People used to pay for Compuserve, Prodigy and AOL. Where are they now?

'nuff said.

I dont think FB is a sustainable business model in the long run...
Its a happening social networking website right now and thats all to it...in 10 yrs from now i dont think it will be worth the hype that it has today unless it has a different business model...
If it starts charging forget about it...

Thanks everyone for the lively discussion here. I'd like to react to a few good points that have been made in your comments:

@John Morawski
True, just because this Nielsen study says Facebook users are "more affluent" than MySpace users doesn't mean they necessarily have money to spend on Web services. I would like to see another study done around what kind of services Facebook users actually do spend the most money on, online and offline.

@Parker and @James
True, the very existence of a Group on Facebook threatening to boycott the site if it charges users is a strong indication that some type of exodus would occur. But as James infers, any business plan involving a fee would take into account that inevitability. Which earns you more subscription revenues: 300 million members who don't pay, or -- assuming half of the users leave -- 150 million who pay $1 per month? Some entrepreneurs would opt for the latter, but there's definitely a case to be made for growing the overall base instead of charging.

@Jason Bradfield and @Kyle
I think you're dismissing the technological innovation and overall usefulness of Facebook too easily. What other site exists that would let me keep track of my friends' activities as comprehensively as Facebook, even if it is cheaper? Kyle, you suggest Twitter would stand to benefit, but I think there would still be a great demand left unserved if everyone flocked to that site.

Please keep the discussion going!

Doug , pertaining to your statement @jason bradfield and @kyle.......as far as the younger generation that is using FB is concerned .....i think they are starting to see that its not as useful as we had hoped......i am constantly hearing about jealous break-ups ruining the facebook experience/stalkerish behavior from partners... and malicious pictures ruining relationships & friendships.....also about how FB is app infested.....now i know my encounters with enstranged facebook users is a small SAMPLE size but im a popular guy and my reach across the internet is quite vast........

i just feel like if they are yur friends you can talk with eachother through text message or skype....use that as an alternate means...i dont want to see photo albums of your family or some lame event you went to....i think thats why the younger generation still flocks to myspace b/c myspace profiles are more narcissistic and its all about pictures of one self.....

plus with the mobile smartphone business now exploding, twitter leads with being the easiest way to update your friends on how or what your doin.....twitter apps are light years ahead of facebook lite & myspace when it comes to the mobile market.....

+ twitter's real time search is where the real gold mine is at, if you want to get back to talking about one of these sites turning a profit.....well its right there in the tweet

On Facebook's home page, it states "It's free and anyone can join". This is part of Facebook's appeal. It puts us all on the same plane so Richy Rich can join and so can Joe Shmo who doesn't have two dimes to rub together. In my opinion, they shouldn't charge to use the site. I believe that if they were to start charging, MySpace and Twitter would become even more popular. I wouldn't pay to use Facebook when there are free social networking sites available.

Facebook is now a well-utilized and powerful marketing tool for many companies. All of my major clients create Facebook pages for the company / movie / album or whatever it is they sell. And they create Facebook apps and Facebook games to market their company. Thats where FB should charge money, not to the end users. That's what Apple did with the iPhone SDK -- now it costs $99 to download the SDK needed to create an iPhone app. When I develop iPhone apps, I just pass that cost onto my client.

As for end users, the truth is that a lot of young people live and die by facebook. I personally dont, but my company has dozens of people in their 20s who are constantly on facebook (how they get any work done is a different story) posting all of the boring crap in their lives:)

They and college kids would pay a small nominal fee for FB for sure, they're addicted and very networked. But a significant minority will flock to one of the other 60 social network sites out there, if those sites can come up with better technology and features than FB. There's few that can compete with FB at this point though.

Enough will pay a marginal fee because FB has the network of people that no other social network does. They're the main stage at the show. Anyone who doesnt is just squatting anyway, and can move on at their own peril

Forget Twitter, that dog is doomed to fail like Friendster before.

lol businessmen, go back to Merrel Lynch

Classmatess.com!!!!!!!!!!!!!!!!!!!!!!

I will absolutely never pay for social networking.

The notion that people might do so is ludicrous.

@Dan L: I don't think you know what luddite means.

I simply will not continue to use Facebook if it requires payment. Douglas, you're obviously very disconnected from the younger generation. Facebook was originally founded for college students (when I joined a long time ago) and we all know college students don't have any money. I really doubt it ever uses this business model, despite the inefficiencies you attempt to point out. The moment they do, Facebook numbers will dwindle significantly.

Myspace is profitable (last I checked).

Facebook has more users but doesn't make money (yet).

They are both free and neither of them will ever charge basic usage.

Facebook just needs to figure out how to make more money from its ads.

As much as I enjoy FaceBook, I would drop it in a New York minute if there was any fee involved.

simple, charge the people that build Facebook apps to access the API. Then it's up to those third parties to come up with innovative ways to make money using Facebook.

Or charge for commercial accounts, companies, like Budweiser, that use Facebook for marketing would pay a fee for an account. Add features that allow those companies to target certain demographics.

I have no problem putting up with advertising in exchange for free websites, like Facebook.

Total flame bait post for how stupid this is. The minute they do that people will flock to the next free thing.

However, What's funny though is how we still pay for services that do a lot less than facebook, for example, phone or cable.

I would never pay for facebook or for any social network. I didn't pay for Match.com and that's how I met my wife, so go figure.

Google (Wave) is probably drooling at the thought of Facebook pay-to-play!

Google (Wave) is drooling at the prospect of Facebook pay-to-play!

um... no. I would not pay to use Facebook - not unless by paying I could have better control over the interface - and block ads. Maybe.

If facebook started charging i wouldn't think twice about leaving and going to myspace.
Austin from http://www.uwdawgnation.com/

I absolutely refuse to pay even a penny for using Facebook. Their advertising revenue is supplemented by valuable information they gather from their users, which allows for effective ad targeting, reaching consumers much more effectively than TV, radio, or print ads. To alienate them would eliminate a substantial chunk of that knowledge which makes them so profitable.

They stand to make a half billion dollars this year in revenue, I doubt their wallets are hurting. http://www.businessinsider.com/facebook-revenues-will-pass-500-million-says-board-member-2009-7

Wow Jason, did you even read the article? Or did you give it the brief scan that most people (read: KIDS (burdens)) pass off as being informed today? Had you read you would have plainly seen that Myspace, as of June 30th has lost almost a half a billion dollars. What the hell is facebook anyway? Most of us pioneers swapped that for Twitter 8 months ago. By the time facebook gets around to figuring out how to charge they will have completed the cycle of obsolescence.

As a business with costs to bear, Facebook is not interested in freeloading cheapskates who never click on ads.

I hope Facebook remain free for those people, but if they want to charge me $12 per year to remove ads and perhaps to add some extra feature, like a custom profile background, then I will pay, and I am on one of the lowest incomes around.

I consider facebook to be a convenient nuisance. I use it because it's a convenient way to get ahold of all those people you really don't give much of a s#!t about but might need to contact sometime for one reason or another. I'd never pay for it.

I would not consider myself a "heavy" Facebook user by any means, but I know I would pay for it. I think the difficult part for FB to decide is the monthly cost. Even if they charged a measly $1 per month, and 1% of the users stuck around and paid it, thats 3 million dollars a month. *cough* Would you pay a dollar a month for Facebook? Of course you would, and don't try to convince anyone you wouldn't. Again, I don't think of myself as a big time FB user, but it is the first site I check in the morning, I see what everyone is up to and talking about, and I go about my day, checking it periodically. I'm sure my usage is pretty typical of others on this comment thread, and I'm sure you would say to yourselves, "pfft, its a dollar a month, who cares?" just like I would lol. You can even go all Childrens fund and rationalise it as 3 cents a day!

I think there are people who would pay for a business level service from facebook just as people pay $50/year to google for a higher service class for email. Anyone running a business would $50/year for the security of knowing they would get customer service for that fee. If your account is disabled and you have invested in facebook as a tool for your business, you would $50/year for a profile just so you can communicate with a human to get an issue of concern resolved.

I'm amazed that people are comparing Twitter & Facebook. They are simply not comparable - 2 totally different concepts.

The problem with social sites like Facebook and Digg is that they were created with no business model to begin with. Both are unprofitable and even today lose money.

Digg users block ads on the site with ad blocking software to make it run faster.

Digg has taken 3 rounds of investment banking and now even if they did manage to sell it would not profit, only the investment bankers would.

Lastly, why would anyone pay to use Facebook when Google Wave is ten times better, faster, more stable and useful?

Not to mention Google makes a profit every quarter, over a billion even in today's economy. Facebook loses millions every quarter.

Hence Google is building a much better platform and it will always be free because they can afford to pay the bills.

I have had access to Google Wave, or Gwave as we are calling it for months as a beta tester and now have access to the public release.

I can tell you it is much better from a business standpoint than Facebook will ever be.

NO ONE will pay to use Facebook when they cannot make money there. That is the bottom line....

- Chris Lang
http://www.thegwave.net

The problem with social sites like Facebook and Digg is that they were created with no business model to begin with. Both are unprofitable and even today lose money.

Digg users block ads on the site with ad blocking software to make it run faster.

Digg has taken 3 rounds of investment banking and now even if they did manage to sell it would not profit, only the investment bankers would.

Lastly, why would anyone pay to use Facebook when Google Wave is ten times better, faster, more stable and useful?

Not to mention Google makes a profit every quarter, over a billion even in today's economy. Facebook loses millions every quarter.

Hence Google is building a much better platform and it will always be free because they can afford to pay the bills.

I have had access to Google Wave, or Gwave as we are calling it for months as a beta tester and now have access to the public release.

I can tell you it is much better from a business standpoint than Facebook will ever be.

NO ONE will pay to use Facebook when they cannot make money there. That is the bottom line....

- Chris Lang
http://www.thegwave.net

Ya right. I would never pay for it. electronic cigarette

The culture on social sites is about gifting friends, apps let you share and give virtual gifts, hugs, karma, large oversized hearts to your friends, in Farmville you can even gift trees or animals to virtual neighbors.

Why can’t you give a friend a prepaid $200 gift card to Nordstrom or Sephora as a gift on Facebook. Or a $50 Starbucks gift card to workers on your teams page. It makes sense that social networking sites can make a connection directly to point of sale in some way to claim a piece of that sales profit.

Its not a pay culture but a sharing and gifting culture, so.. better really gifts could be a direct marketing tool right to point of sale.

Google Maps can find a local store for you, even give walking directions from the block you park on downtown. But search is not as valuable as having a direct part in that sale at the counter.

With Facebook you allow an app a right to your information, you become a fan of a business, you allow a relationship to be formed.

So sales and special discounts you want these days should get access to your FB inbox, and also get access to your other email accounts to give updates. So why not have a, I’m at the store now app, to get a discount at the point of sale. The real money is at point of sale and the social sites need to give you a reward for any business it generates from that relationship.

Don’t keep tomorrows customers off your platform with fees that only restrict there access to the real market.

Like many others here have said, the money is in the applications and the ads. But also - why not charge for the professional Facebook pages that companies create as marketing tools? A sliding scale based on company size - so Microsoft pays a far larger fee than I would for my 1-person photography business.

An app that comes to mind that's likely profitable is Farmville. Half of my friends are actively playing - likely 70% of my over-40 friends play it religiously, and while they wouldn't admit to it, have probably bought "Farm Cash" and paid in excess of $10 to advance in the game.

There's no such thing as a nominal fee when your asking people to pull out a credit card when they didn't have to the day before. FB is great and I can easily see paying for certain things on the site, but for basic access? NEVER! I have a ton of friends who spend every waking moment of their lives on FB games, and they have no problem with a few micro-payments there.

Basically, you can bring in some new revenue streams, but they need to be associated with new services or you're just going anger people.

Also, the reason I left Myspace was all my friends did, and FB would have no appeal if half my friend list disappeared.

They could try a donation scheme to see just how many people would donate to improve the site.
A statement in a small add they pop up in front of us that says something along the lines of "we will never charge, but we need to keep devolping so a donation would help etc ect...u might be suprised who would donate ... i for one would never pay for facebook but i have donated to sites when they have provided good freeware

If facebook started to charge I would seriously start a riot, I hate sites that make you pay to use them, especially when I set out with a goal to find an answer to a question, but then realize, hey the only information worth looking at costs $47.95 hm.... great....

Why should I pay just to use Facebook? We already paying our monthly fee in our DSL just to access the net. We are here for just social networking & not doing business. Besides, there are lot of business ads in the Facebook that definitely paying the FB site in promoting their business. If Facebook started to charge the user then I am very willing to delete my profile anytime!

Yes this is very interesting article.Around 17% of the time people spend surfing the internet is now spent on social networking sites; up 6% in one yr.Thanks for sharing such a useful article here...

reisezubehor

"The youth and lack of spending power amongst its users is at least partly to blame for MySpace’s decline — so too is the downturn in online ad spending."

Really? Thats the reason for MySpaces decline? How about the fact that its not a real social network and is basically just geocities with another name.

I don't think facebook should charge. Or, if they did charge they should do so in a very classy and strategic way. I think if members of facebook were to be required to pay per use, then they would just go somewhere else. I think that the young talent behind facebook should continue to watch and study how the members are using the new media and find a way of charging--if that's what they decide to do--that complements their members. The old model of charging every time you use it would cheapen the experience and turn folks away.

It would be a bad idea to charge and would end up forcing everyone back to Hotmail, Yahoo or other SN capable Sites.

Frankly what do you gain from fb ?Its supposed to add value to your life and not just get u addicted so as to manipulate you and just an out of topic question wat would be the easiest way to pay an annual $10 to a website.Gud topic.

I would never pay using facebook...never!!!!

http://www.craigspr.org

I would never pay using facebook...never!!!!

http://www.craigspr.org

I am truly amazed that there is so much retaliation and "up in arms" against having to pay just $1 a month for something millions of people find valuable enough to use many times a day. Why?....

Simply because all the same people who are speaking out about that $1 I doubt have ever spoken out this loud about the money the government STEALS from us with every pay check (income tax...upwards of 30% for some). If the same percentage of people who pay taxes stood up against income tax like they are against paying $1 per mo for FB, then the government might soon realize the "users control the government" not the other way around.

Just something to think about.

If facebook starts to charge its users to access the site, I don't think it will nearly be as popular. Although, they could charge businesses a small fee to run their fan pages.

http://www.drlenschwartz.com

Me and many friends use facebook as a way to have fun and chat with each other, we use it becuase it is free. If they end up doing a 'fee to use' we will most likely find something better. Even $1 a month would kill such a website when there are other websites like facebook we can and will use.

it doesnt matter how little the money they will charge is. hu the hell can b bothered 2 enter their credit card details and wat not? thats half the reason i dont sign up 4 some things on the internet.

automated approval system
I DO NOT AGREE WITH IT...
~THORERICSALO

"It could also charge a nominal fee, like $1 per month, to let members avoid ads. "

As more people become more internet savvy, this will become less and less of a viable point.

Ads are not seen on any computer in my network, regardless of whether on a pay site or free one.

Even Hulu doesn't have ads.. I would rather a few seconds of silent blackness than be force marketed to.

There is no motivation for me to pay $1 to avoid something, as I can do it myself.

There is no motivation for me to endure advertisments, as I can shop for things that I want when I need them.