Facebook May Follow Linkedin

Must Read

Google Just Got Super Smart: Launches The Knowledge Graph

If there is one product on the Internet that has had absolutely no competition whatsoever, it is Google Search....

What Everyone Ought To Know About Social Bookmarking

As a marketer, you might be wearing different hats in your startup. Strategizing content, Executing SEO activities, drawing a social media...

E-Commerce Industry In India Worth $13.5 Billion In 2014: Will Cross $16 Billion In 2015

According to the latest report by IAMAI and IMRB International, the eCommerce industry in India reached a value of INR 81,525...

Facebook has gone far beyond the quirky college start-up it once was, with revenue around $800 million last year and profit in the tens of millions, according to a Reuters report. But it could do a lot better, and make its critics far more comfortable, through optional premium memberships like Linkedin Business Model.

The Growth is impressive, said Marc Andresseen – board memeber last year.

“If they pushed the throttle forward on monetization they would be doing more than a billion this year,” said Andreessen, who made the cover of Time Magazine as founder of the world’s first Web browser company, Netscape.

Chasing some Revenue target is very important for any of any company but making its services much more valuable to general members should be a top priority for any online business model. If taken care, revenue achievements will happen automatically.

Advertisements

Understanding the same, Facebook may follow the categorized business model like Linkedin. By segregating membership type Facebook can make the payment more immpressive. Some of features which facebook may consider to implement for Premium Members :

1) Upgraded Storage capacity for Video & Photo upload.

2) Ads free pages.

3) Highest security level for personal information sharing.

4) Multi party chat session.

Advertisements

5) Free Facebook points.

2nd & 3rd option can do wonders for Facebook as there are many business users who would like to have their Fan Club or various other pages to look ads free. They wont mind paying any reasonable amount to opt for this extra feature.

Similarly Security issue towards personal data has become a pain point for Facebook for long time. Implementing the 3rd option facebook not only ensure their members but also zip the lips of their critics.

By all the above manners facebook will earn few extra revenue with promise of better service and upgraded features, if price wont make a big hole in member’s pocket. Also is quit unlikely that Facebook will risk its current member base of 500 million by making the new membership type mandatory.

Paid membership would likely increase Facebook’s per person revenue. Even if you assume that the company gets $10 CPM (cost per thousand ad displays) rates for advertising — which would put it in rarefied company, given that the average rate in the U.S. is $2.48 — how much does the average customer bring in? Divide even $1 billion in revenue by 500 million users and you’ve got … $2 a person a year. Be generous and divide the billion by 300 million users, assuming 67 percent user growth since January 1, and they would still be just over $3 a person a year. It wouldn’t take much to replace that.

Now, heavy users who demonstrate a greater interest in the service would be more likely candidates. How much might they bring in through ad views? If someone uses Facebook several times every day and views 10 ads, the person views 70 ads a week, 3640 ads a year. Revenue for that person would then be $36.40 a year, or about $3 a month. A $5 a month fee would create $24 more a year in revenue than through advertising. The incremental resource costs to deliver benefits would be negligible. Promotional users would likely pay even more.

This would be a freemium business model. Assuming typical conversion rates of 2 percent, and Facebook might expect 10 million paid users with additional revenue of $240 million — close to a 25 percent increase, even for $1 billion in annual revenue.

Facebook would improve its reputation and sharply increase revenue. Not a bad result for a relatively simple change.

Previous articleiOS 4 Has Arrived
Next articleFuture of Check Deposits

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Youtube’s Biggest Hurdle To Encourage People For Covid-19 Vaccination Is Youtube Itself!

Youtube has become both the poison and medication when it comes to disinformation, and now that is causing massive...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded and unparalleled...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter, with a...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one of the...

More Articles Like This