FACEBOOK: the end of free subscription?

            The social network called Facebook has revolutionized our lives when it was created in 2004 by Mark Zuckerberg. With subscriptions increasing exponentially, the network counts with 136 million users in Europe only thanks to the number of applications proposed by this social website. However, subscribing to Facebook is free. It is then not surprising that a rumor spread concerning the change to charged subscriptions. Is this rumor true? Does Facebook need this to be financed?

         First of all, the network has built its popularity on free subscription. That is why it has now over one billion users in the world. A change to charged subscription would certainly mean a significant decrease in this number. And this is really not in the interest of Facebook. Why? Because its initial and more important ways of finding funds are based on this popularity.

                       

With all the information that users save in their Facebook profile, the network has become a huge data base with every one’s name, sex, age, location and, most importantly, every one’s tastes. This turns this invention into a very advantageous platform for enterprises. Thanks to Facebook, firms can set up their own advertising campaign which will appear in the sidebars of the site and these can be aimed at corresponding people profile. For example, if you put in your profile that you like shoes, advertisement of these products will appear in your profile or in every page you will go on. Imagine if you could for sure spread your advertisement to millions of people interested in your product. It has more chance to work than advertisement in news papers ant it costs much less.

Facebook also has created very lucrative devices such as the Facebook Gift Shop. This application enables users to send virtual gifts to one another. These gifts are funny or meaningful images which can cost only $1.Therefore, even if half of Facebook’s users use one of these virtual images, the creator would earn $500 million. Only this year, this system generated $150 million.

             Facebook Credits are another lucrative creation of Mark Zuckerberg. The purpose of these Credits is to enable users to have access to more applications. For example, if you are a fan of video games which can be found on Facebook, such as Zynga’s Farmville game, you can have access to more animals by buying Facebook Credits.

            Other means of financing Facebook are loans and sponsoring. Thanks to its popularity, Facebook has a good borrowing capacity. For example, financing company TriplePoint Capital lent $100 million to Facebook for it to build its infrastructure. Sponsoring also brings significant funds to the network company. For example, Microsoft asked for collaboration between Facebook applications and its server Bing in exchange of which Microsoft invested $240 billion in Zuckerberg’s company.

            Besides, the firm has been able for years now to sell its Facebook applications to every Smartphone company such as Blackberry or Apple.

            Therefore, Facebook fans, there is no need to fear the rumor saying that subscribing to Facebook will no longer be free. The network has sufficient ways to earn a LOT of money. Indeed, it already has a turnover of $3.7 billion. The only stake for Facebook now is to stay the only essential platform to communicate in order to attract investors.

LINARES M.-P.