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It also depends a bit on how it's built as a product - somehow I doubt it'll be a top-level tab the way MySpace has it, but rather it'd be implemented as a pre-installed app like Photos. The question is whether they end up building a central high traffic music section that may be more merchandisable than a bunch of fragmented pages spread throughout peoples' profiles.
So the question is just how far they're going to go with it...
David, your myspace nature is coming to light!
Very thoughful, in depth look at the future of ads for Facebook. The international traffic issue you touched on is a big one for marketers, especially when you look at the style of user engagement. I would argue that users who have used Facebook since the beginning, when they were in college and it was far more private, use Facebook in a significantly different way than users in international markets who now have the opportunity to adopt Facebook in its current form for the first time. Brands need to take this into account as they continue to engage Facebook users in more ways than just straight-up advertising.
Did you see the article by Bob Garfield on monetizing Facebook? Back in September, he hypothesized a Netflix-data mining-type approach to affiliate transactions as an alternative towards ad-focused monetization. Worth a read, IMO.
MySpace was my immediate response to this title, too. ;)
I've always wondered where online advertising is going and have maintained that it is simply not sustainable 3 - 4 years out. We're heading in that direction. Web companies are going to have to start charging for the most basic functions and everyone will come back to reality.
How about just charging users $1/month? Don't they have millions of users? Does everything have to be ad based? Certainly, that's what investors are hoping for - as well as the FB founders; however, I'm not even sure that people even see ads when they go online. I have to believe that most folks are at least a little like me - they have filtered ads mentally, that they don't even see them anymore. They've trained their eyes to naturally seek meaningful content.
Are we talking about the Joe Plumber Hockey Mom who is an infrequent web user? I have to think that they're the same way or will be over time. Unless forced - like with a DVD or television commercial, they won't look at them. Going three or four years out, what is the sustainable revenue model here? Will sites start sponsoring buttons - in other words, to get this certain piece of functionality, the user has to click on the HP-sponsored button?
Going back to a pay model, perhaps users will be paying on a per click basis for certain functions within social apps and ad-hacks will be relegated to more traditional means? Alternatively, advertisers will only be paying for splashes (mind/eye-space), and always paying a very high premium for clicks.
So I think the major point would be to extract money from users who are willing to pay to use Facebook, but leave the people who wouldn't pay alone. The challenge is in price discriminating the former from the latter, while still getting everyone to come back to your site :)
Now don't get me wrong, you could absolutely generate a ton of value from charging people, and a lot of folks would stay. But you should also remember that Facebook raised a TON of money and that anything other than a massive multi-billion dollar homerun is a failure case.
I'd sure as hell pay it. FB told me when my cousin's had babies and when my niece moved to Cornell. A great way of overcoming grudges of our parents.
And this is the money line that applies to more properties than just fb.
thanks for stopping by Rohit! Hope all is well.
Their moves over the past 2 years seem to indicate this is where they plan on going. Perhaps charging partners a fee per user?