Would you pay $5.55 to own your Facebook?

28 Sep

Or, how do you put a value on love, I mean, Facebook?

Money by Thomas Hawks

Photo credit to Thomas Hawks

I’ve been following (and participating in) the discussions of the Facebook changes announced at f8 (for more on that, see my previous post), and have been feeling that the Facebook changes are more directed at supporting further funding sources for Facebook than they are about improving user experiences.  (Facebook seems to take the bread and circuses approach to keeping people happy – the pretty new timeline/cover aesthetic is the newest circus.)

The Guardian’s article “Why Facebook’s new Open Graph makes us all part of the web underclass” was the first piece that I’ve seen that really took the issues that I’ve been grappling with and fleshed them out.

Without money by Toban Black

Photo credit to Toban Black

The Guardian’s article was based on one overarching metaphor: participation in the internet is like participation in society, flying in an airplane, or traveling on the Titanic: there are first, second, and third class citizens and being in the lowest class sucks.  And, like with classes in all things, you get what you pay for.  As Facebook users, we’re internet freeriders.

We’re the product, not the consumer.  With Facebook, like with all things, you need to follow the money.  Facebook’s paid to deliver eyeballs and demographics to advertisers, not to bring a great social media experience to users.  Facebook will continue giving us circuses that keep us happy enough that we don’t leave, but the Powers That Be at Facebook know that, ultimately, we’ll stay.  We have more to lose my leaving Facebook than Facebook has to lose by us leaving.

Because we don’t pay, we’re not Facebook members, we’re Facebook users.  But I wonder, what if we could become Facebook members, or Facebook stakeholders.  What if we could elevate ourselves to first class Facebook citizens?  If Facebook really works the way that I expect – and it really is all about the money – could there be a way to buy yourself out of the parts of Facebook that you don’t like?

Let’s look at the numbers:

International Money Pile in Cash and Coins by epSos.de

Photo credit to epSos.de

In 2009, Facebook had a profit of 222 million and brought in 700 million in revenue, meaning that they had a profit margin of about 26%.  Predictions are that Facebook will make 1 billion in profits in 2011.  Assuming they’ve kept roughly the same profit margin, that would mean that Facebook’s expected to gross about $3,885,006,495 in 2011.  Facebook has roughly 700,000,000 members, so we can say that the gross $5.55 for every Facebook member per year and net $1.42 for every Facebook member per year.  (Seems really low, doesn’t it?  Please correct me if you think my math is crazy.)  So, does that mean that it really only costs $4.12 to provide Facebook service to each person, because talk about economies of scale…

The Colour of Money by The Wanderer's Eye

Phtoto credit to The Wanderer's Eye

If you could pay $5.55 per year to buy yourself out of the ads and the tracking, would you?  I definitely would.  I don’t know if I can place a real value on my Facebook experience, but I know that it’s more than $5.55 per year.

But, before everyone starts offering to pay Facebook $5.55 to get out of the scary parts of open graph, let’s admit that Facebook’s got a lot more invested in you than one year of your data.  One year of your data is good, but Facebook’s advertisers are paying for access to a lifetime of your data.  So, let’s look at this overall: Facebook’s current value is somewhere between 50 and 100 billion.  (Yes, I know that’s a very big range.)  The most recent data that I found says that it’s dropped to 82.25 billion, but I’m seeing numbers all over the place.  Let’s be generous and call if 100 billion – things like this usually go up after IPOs, anyway.  So, splitting the total value of Facebook amongst its users, Facebook has a value of about $142.85 per user.

Would I pay $142.85 to get out of Facebook ads and tracking?  Tricky question.  Definitely a lot harder than would I pay $5.55 per year.

built by the people...for FACEBOOK by libraryman

Photo credit to libraryman

Let’s say that the Facebook “buy out” involves both.  A one-time fee of $142.85 and a membership fee of $5.55, to be fixed at a 10% price increase per year.  Would you do it?  There’s been all kind of rumors floating around recently that Facebook is going to start charging (Facebook has categorically denied them all, and to be honest, I don’t believe them, either).  The rumors suggested that Facebook would charge $9.99 per year and had people outraged.  I don’t think the rumors are true, but I’m not that opposed to $9.99 (although obviously I’d rather pay $5.55).  On some level, I’d welcome a Facebook membership fee, because then I’d be a Facebook member.  They might actually have to have member services and respond to members’ concerns.

Questions of the day: Would you pay for Facebook? How much would you pay?  What would you expect for it?

MaggieCakes is a blog about social media, marketing, culture, and what’s new on the internet written by me, Maggie O’Toole.  Every day (okay, I try for every day) I comb blogs and news outlets for the news about internet culture and social media to bring them to you (with my commentary, of course) here on MaggieCakes. Find anything interesting in the worlds of culture or social media that you’d like to see a post on? Leave a comment or send me an e-mail at 2maggieotoole@gmail.com.

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