The Plan for Facebook | Teen Ink

The Plan for Facebook

January 13, 2009
By Anonymous

Hundreds of millions of dollars are waiting to be made by online tech companies that don’t charge their customers for their service. In the article, “A Radical Business Plan for Facebook,” Farhad Manjoo gives out the idea that online social networks like Facebook, Myspace, and Youtube could make money by charging their customers for the service they provide. These companies have had to cut jobs and cut back on free privileges offered to employees because of financing problems. Manjoo mentions companies don’t settle for million-dollar opportunities and only go for the billion-dollar ones. Statistics show some companies could make hundreds of millions of dollars a year by barely changing their operation; take Facebook for example. They could set certain limits and regulations for the users that want the program for free. Then, they could make customers pay $5 a month to get full use of it. For the portion that would decide to pay, the company could make at least $300 million a year. Even though it comes short of being in the billions, it’s still money to pay employees and make their service or product better.

It is true that there are online companies losing out on earnable money: Facebook, MySpace, Youtube. Each year, millions of people use these services without paying. Meanwhile, tens of thousands of employees get fired and lose benefits to save money during this time in the economy.

“What exactly is so bad about making a few hundred million dollars a year?” said, author, Manjoo. He talked about how companies are looking for billion dollar opportunities instead of just hundred million dollar opportunities. He establishes a good point. Big companies reach for billions because it is a large number. Instead of earning billions over ten years by making millions a year, they attempt to get it all at once instead. Unfortunately, this is risky business and sometimes fails to pay off.

Making money in these companies should really be easy. Let’s take Facebook for example; they should require their users to pay for the service they provide. Specifically, like Manjoo said, they should create a free version for free that disables the use of some benefits of the program. If a user wants the full version, they must pay a certain amount monthly or yearly. Millions of people use Facebook daily and there could be plenty of money made off of it. Users can compromise with a free version limited to certain benefits; they don’t even communicate with half their friends anyway. For the users who do use the system as a common convenience, at least some will opt to pay. If charged just five dollars a month, Facebook has the potential to make $300 million or more per year. Seems like a reasonable amount of money considering Facebook is run by so few people.

People will argue that companies like Facebook and Myspace make plenty of money on advertising. Obviously if they have to lay off workers and cut back on benefits, they aren’t as well off as it seems. Paying a small amount of money a month to use the service isn’t much. Take the change out of your pocket each day for a month and there would be enough for that month’s bill.

It is agreeable that internet companies like Facebook and Myspace should charge for the use of their services. It permits employees to keep or get jobs and keep many companies from going out of business. It also provides a useful service that people will be willing to pay for.

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