Why Facebook may soon cost you money

Now that Facebook has conducted a small test of charging users to promote their status updates, isn’t it inevitable that, as a public company, Facebook will have to start dinging users in earnest?

by Chris Matyszczyk

The other day, one of Facebook’s bigger clients was privately complaining to me.

This gentleman is in charge of digital advertising for a worldwide company. He told me: “First they charge me for ads. Then they try and charge me again in order to make sure those ads get seen by more people.”

He was referring to Facebook’s presentation in February when it suggested brands have “Premium ads.” You know, ones that might be enjoyed by more than the estimated 16 percent of fans who actually see a brand’s messaging currently.

It’s hard not to imagine that — despite Mark Zuckerberg’s insistence that Facebook will always be free — the soon-to-public company will have to seek more revenues from its biggest franchise: every single one of its users.

The principle behind the test aimed at users this week was the same as that aimed at advertisers: “Not too many people see your very important Facebook updates. So pay us and we’ll make sure they do. Or at least we’ll try.”

The method suggested was that your important post would be highlighted — for a fee of 1.80 New Zealand dollars (around $1.42). Actually there seem to have been several price points, one going up to the $2 mark.

The situation for users is even worse than that for advertisers. On average, a mere 12 percent of your friends see your status updates.

One can understand Facebook’s problem. Too many people use it. Too many posts are being created. Too many people miss most of what’s there. Yes, it’s just like Twitter.

To make this more disturbing for the company, there’s a joyous train hurtling in the other direction: the Church of Wall Street.

Those who demand that Mark Zuckerberg pay them the same respect as he would pay God — yes, by wearing a jacket — are only interested in money rolling in.

When they lose money — such as the $2 billion misplaced by JP Morgan Chase this week — they might bow their heads for a short moment and carry right on doing the same thing.

But if Facebook’s numbers fall short, they will be all over the company like a scratchy hoodie.

It is that sure knowledge that is driving Facebook to find every possible avenue of revenue.

Facebook is trying to make as much money out of brands as it can. It is trying to sell them every possible interpretation of its numbers in order to squeeze out cash.

“Can’t I just be left to control the world, without all this money nonsense?”

(Credit: James Martin/CNET)

In turn, brands can see that Facebook has huge numbers, but they aren’t seeing the sorts of results that make them want to anoint the site as their primary medium. Facebook is still cheap, and therefore money spent there is cheap money.

But with hundreds of millions of people on its pages, Facebook hopes to begin to squeeze pennies that will multiply into dollars. It is the ancient idea of nickle-and-diming.

This week’s New Zealand experiment comes from the same helpful impulse that spawned fees for your first checked bag at the airport.

In other words, now that we’ve got you, give us something. Of course, one of the difficulties if Facebook succeeds in charging customers for, say, actually having people seeing their updates, is the possibility that its relationship with its users will change.

Currently, Facebook can switch its privacy rules and drag you along because you are aren’t a paying customer.

But once you are, mightn’t people begin to take on a different attitude? A paying customer might expect a higher level of service, of feedback — and, yes, of privacy.

Facebook’s privacy-rule change this week allows it to use your face to advertise products away from Facebook.

If you were now being charged in order for your friends to see your posts, mightn’t you be tempted to charge Facebook for the privilege of using your lovely face to sell, say, 55-gallon tubs of lubricant?


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