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Paying for Facebook?
I had to use this graphic again!
Ok, I’ll admit it, about half the reason I am wrote this post was because I got to use my “Facebook Ax” image again. That took me awhile to put together so I thought I should get at least two posts out of it! But the other reason is actually a really really interesting one. In case you missed it or forgot, a little over a year and a half ago Facebook was given a $15 billion valuation. Some felt this valuation was way out of whack and others (myself, unfortunately included) thought it wasn’t too crazy. At the time of the valuation I didn’t know all the details about Facebook, just the fact that millions upon millions of people were flocking to it. This was the reason I thought Facebook might actually be worth $15 billion. This is before I knew that Facebook doesn’t actually make any money. In fact, in the latest reports, it appears that Facebook is burning through $20 million a month. Coinciding, the valuation numbers have come way down recently…down to the $2 billion range.
So how exactly does Facebook plan on making money – that’s the real question. Even though its valuation has decreased over 85% in the past year and half, it still lies in the $2 to $3 billion range. That is still a lot of money and means whoever decides these valuation numbers believes that Facebook can make a profit at some point. So what would one of the easiest ways for Facebook to try and make
Would you pay for Facebook?
a profit you ask – charge a fee of course (try being the operative word in that sentence). Well, I came across a survey on CNET.com that I found to be incredibly interesting. It asked the simple question of, “How much would you willing to pay for Facebook?” The results don’t bode well for Facebook – at all. Almost 88% of the people responding to the survey say they wouldn’t pay…not even 50 cents a month. 50 cents!!!! I know I wouldn’t pay a dime for it (or 5 of them a month). Relating back to my earlier post about axing Facebook – these results really put into perspective the value people place on Facebook. It seems people don’t believe that Facebook brings “50 cents a month worth of value” into their lives. And before you go spouting off about a biased sample with it’s relatively paulty numbers in comparison to the number who use Facebook and the fact that everyone who took the survey is a CNET vistor (I could come up with plenty of other validity issues…I’m taking a class in it right now) – let me say I know it’s biased, but the results are so overwhelmingly one-sided that I thought it to be quite interesting. From these results it looks like Facebook needs to head back to the drawing board about how to generate revenue if they were considering a monthly fee. Anyways, the results image here is stale, so click it for updated results and while you’re at it – head over to CNET and check out the article & survey.
If you have something to say...
My problem with this survey (and most surveys) is that there is always the “would” or “if.” It is asking people to assume how they would behave in that situation. It is easy to say you wouldn’t pay for facebook. But I am pretty sure that if that were to actually happen almost half of those 88 percenters would cough up 50 cents a month. Once they realize life without birthday reminders and easy contact messages, they would be more likely to see that there is a 50 cents a month value. You can say you can go elsewhere but you have years invested in facebook. I think 50 cents a month is better than locating friends all over again. Just my 2 cents (x 25).
@Bailey I understand your gripe with the “would” and “if” part of surveys, but how else is it going to be worded? The point of the survey is to find out what people would do if, in the future, Facebook charged a monthly fee. There wouldn’t be a need for a survey if Facebook just decided to start charging a monthly fee – you could just compare the data of pre/post numbers. So yes, all surveys that ask about a future behavior are flawed because it is asking a person how they would react and you can easily argue that people don’t actually know how they would react until the situation actually occurs, but we don’t really have any better options at the moment. My point is, there is still value in a survey like this, even if it is inherently flawed.
You shut your mouth when you’re talking to me!
hahahaha – ohhhh little sister. You’re awesome.