The rumor that Facebook
will suddenly start charging users to access the site has become
one of the social media era’s perennial chain letters.
While Facebook prominently advertises that its service is “free
and always will be” on its homepage, it hasn’t stopped false
rumors of a pay scheme from going viral on numerous
occasions, most recently in conjunction with the major profile
redesign that the site announced earlier this month.
Given the ubiquity of these rumors, we thought it was worth
exploring their origin — and why we can guarantee Facebook will
never charge you to use its service.
A Long History
Chain letters — which date back to the days of snail mail —
have dogged nearly every online service that achieved critical
mass. While they vary in the details, the general premise is
that something negative will happen to your account unless you
spread the message to your friends.
On AIM, this took the form of IMs that needed to be shared with
friends to avoid account deletion. On Friendster, rumors spread
that the service was getting “too crowded” — and hence, they
needed to determine which accounts were active and remove those
that weren’t. On MySpace, word was that the service was getting
so popular that the site would soon start charging members, and
the only way to avoid the fees was to — you guessed it — forward
the message to your friends.
Of course, none of these situations ever actually materialized,
but it didn’t stop millions of users from passing the message
along. Snopes has a detailed overview of these scams and others that
have permeated the web over the years, going all the way back to
the early days of Hotmail.
The recent round of Facebook rumors suggest that the site will
start charging for membership as a result of the upcoming new
profiles. The new Facebook does indeed feature some dramatic
changes, but you can rest assured that one of them isn’t that
the site will start charging you.
Here’s why: For starters, it doesn’t need the money. Facebook
is estimated to be on track to pull in around $4
billion in revenue in 2011, and has raised more than $2
billion in venture capital. It’s also on track to go public in
2012, a move that would bring in significantly more capital for
the company and value it at between $80 billion and $100
billion.
More importantly, the company’s business model revolves around
having as many users as possible. Remaining free is paramount to
doing that. Facebook makes its money on highly targeted
advertising that’s based on the plethora of data that its
members share on the site. Restricting users’ ability to use the
site would actually be detrimental to that model.
Facebook didn’t even introduce its ad platform until 2007 —
because the company wanted to focus on adding users as quickly
as possible.
That’s not to say social networking sites haven’t found success
in charging members for some services. LinkedIn offers premium
memberships with features such as enhanced search, direct
messaging and seeing who has viewed your profile. Some dating
sites, like Match.com and eHarmony charge users to message each
other. Still, those services are appealing to a specific
audience — Facebook’s goal is to connect everyone in the world.
That can’t be done if you need a credit card to use the service.
Why It Will Never Charge You
Of course, Facebook is in business to make money. Beyond
advertising, it has found ways to profit directly from its users
through Facebook Credits, a form of currency that can be used on
the site in social games like FarmVille and Mafia Wars.
In the future, we expect Facebook to find additional ways to
monetize. The company could grow its credit system to become a
rival to PayPal. We could also see Facebook extending its ad
platform beyond the social network itself and onto the wider Web
— in order to compete with Google’s AdSense.
There’s also potential in ecommerce. Although Facebook’s Deals
product fell flat, an increasing number of merchants are
starting to sell
their wares directly on the social networking site. Might
Facebook one day provide its own tools for powering such
activity? It’s certainly possible.
The one thing that all of these models have in common is that
they need a critical mass of users to be successful. Facebook
has that, and would never risk losing it by charging people for
basic access to the tools that make its multi-billion dollar
business work.
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