Tuesday, June 01, 2010

I think this is what "Free" means

I enjoy using Facebook

I like to use Facebook for posting short comment blogs, photos and linking to my YouTube videos.

Being social, I especially like Facebook for reading, viewing and listening to what others have to post and sometimes this spontaneously erupts into lively debate. I learn a lot from what is posted on Facebook.

It seems there is a constant protest over protection of information posted, and the possibility that Facebook will introduce a fee for using their services. To me this shows a possible misguided interpretation of what a free internet service is about. It’s actually no different to the operation of a free offline service.

If we use something for “free” we become a product

I believe the core Facebook service will always be free, because of its ever expanding advertising revenue.

What makes advertising on Facebook attractive. Why are businesses diverting their advertising budgets away from newspapers, magazines, television and even away from Google and directing their spending on Facebook advertising?

A wise business does not spend money on advertising without knowing what interest niches will be viewing the media. A farm fertiliser company is unlikely to advertise in a clothes fashion magazine, for example.

On Facebook we reveal who we are and what we are interested in through our profile info and wall postings. Facebook computers catalogues this into niche information that provides the best target conduits that advertisers can find through any medium out there.

This is what Facebook sells to advertisers and its popular! It works! I find advertising I place on Facebook has incredible results compared to Google AdWords, and far, far better than all those old offline mediums like magazine ads etc.

So we use Facebook free, without charge, as what we share is creating a better and better database that advertisers can target far better than the small fortune they used to spend on old market research ways.

We are the Facebook product becoming more and more value to Facebook by the day, so as long as we do not mind being a “Facebook product” the service is free.

Personally, I do not mind this at all. I learn and gain so much from the free service, and the advertising I face is usually close to my interests. If it is not, there’s a link to tell Facebook you don’t like the ad.

Privacy online has to be paid for

I see Ning are now about to introduce fees for building a Network there. MeetUp already does. There is a good business out there created from building up private networks with tight privacy protection. This is because the operators are interested in earning money from your fees rather than from advertising revenue.

When Ning is no longer “free” we are no longer the product because the product becomes the networking service.

I think Ning and several similar operators will become big business soon, and I think Facebook will take notice, along with Google and possibly Microsoft, of course. Facebook may even try to buy Ning or MeetUp, who knows.

I do think Facebook will seriously consider adding subscription networks to their operations, though I am sure they will do this with care. If more than 30% of the current 500 + million Facebook people pay Facebook a subscription fee to join or create a private network with tight privacy, Facebook’s advertising revenue will dramatically go down, and so will their overall revenue from both choices.

This maybe a very tough future choice for Facebook, but one thing that is certain is that we cannot ask for both a “Free” Facebook and have personal privacy of what we post online. How would Facebook pay to continue the service?

My own wee conclusion to this balancing act …

Online, offline, we can only get things for free, if we agree to become a product that someone or something else is paying for.

To actually enjoy freedom, we have to pay or work for something that gives value to and sustains someone else, and then, surprisingly, we question if it is worth it?


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