Data Doctors: Is Facebook going to charge for business pages? - East Valley Tribune: Business

Data Doctors: Is Facebook going to charge for business pages?

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Ken Colburn is president of Data Doctors Computer Services and host of the Data Doctors Radio Program, noon Saturdays on KTAR 92.3 FM or at www.datadoctors.com/radio. Readers may send questions to evtrib@datadoctors.com.

Posted: Wednesday, May 30, 2012 11:40 am

A lot of my news feed (recently) is about FB starting to charge business pages a fee; do you know if someone started a rumor or is it true? — Nancy

With the recent high-profile IPO of Facebook, there are a lot of rumors and speculation about what is going to happen with the world’s most popular social network now that it has gone public.

Many financial analysts have used the ‘revenue per user’ model to compare Facebook to other tech companies which can lead to some folks jumping to conclusions. Others have suggested that the easiest way to align the company’s valuation with revenue is to simply charge each user a monthly fee, but we all know (and so do they) that there would be a mass exodus if they implemented it.

While it’s certainly possible that Facebook could charge for use of their network down the road (and if they did, it would most likely be business pages first), there is nothing official that would suggest that it’s going to happen because they became a public company.

“Facebook is a free service, and we use ads to support that free service!” says Elizabeth Diana, communications manager at Facebook.

At this point in time, the only charge that a business page will incur from Facebook is if it chooses to place an advertisement on the network or use its ‘sponsored stories’ option.

Facebook has a unique way to target users for advertisers, because they have so much valuable information about who we are and what we like and half of us use the network every day.

Ads can be targeted based on any combination of location, language, education, work, age, gender, relationship status, likes and Interests.

Businesses can also use the ‘sponsored stories’ option to have posts or interactions show up on more news streams.

By default, Facebook only shows you items in your news feed that are from friends that you are actively interacting with or posts that have gotten a lot of likes or comments by your friends (the definition of their ‘Top Stories’).

Based on this approach, Facebook’s data suggests that the typical profile post typically only reaches 12 percent of your friends and they are working on ways to allow more important posts to reach more friends.

‘Sponsored Stories’ allows business pages to have posts bypass the normal algorithm and show up on more new feeds of their fans, which means more people will likely see it.

At the moment, the majority of the revenue generated by Facebook is from this type of advertising, but it isn’t enough to justify its current valuation, which is why the rumors of new fees have cranked up again.

These types of rumors aren’t anything new and have been circulating for years. They tend to pop up every time something significant changes within the network or there is discussion about new projects at Facebook.

We constantly hear stories about Facebook testing new ways to generate revenue from its users, including a recent story about something called Facebook Highlight. At the moment, it’s being tested in New Zealand where users can pay a small fee to have a particular status update appear on more of their friend’s news feeds.

They key thing that you will see with any of these legitimate discussions about fee-based services on Facebook is that they are all voluntary and for features that aren’t part of the existing free services.

Now that Facebook is a publicly traded company, expect to see more stories about new fee-based offerings and expect to see more hoaxes claiming that what you get for free today will be a pay service tomorrow.

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