Facebook’s new user charges create difficulties in business

June 27, 2018 | 17:27

(0) user say

Allowing some administrators to set a monthly charge for group members is supposed to be the first step of Facebook’s plan to charge users, aiming to create more effective data security on its social network without the use of ads. However, applying the charge may create difficulties for Facebook’s business.

facebooks new user charges create difficulties in business

Facebook will test the first subscriptions for users. Photo: vietnamnet.vn

Facebook’s plan to charge users

On June 20 Facebook officially launched its latest policy allowing groups on the social network to charge a membership fee of $5-30. Groups on cooking and raising children will be the first to use this feature during the test period.

Previously, on June 12, Facebook’s policy to halt false and fraudulent advertisements came into effect. Accordingly, people can now send complaints after buying goods on the social network. If the number of complaints about a firm is large enough, Facebook will halt the firm’s advertisements on its platform.

Halting some advertisements may be Facebook’s first step in collecting fees from users after a series of scandals related leaking user data.

According to Bloomberg, from early May, Facebook has carried out market research on developing a charged social network without advertisements.

At the April Congress hearing, Facebook CEO Mark Zuckerberg also revealed the possibility of launching user charges.

“In general, we believe that the advertising-driven model is right for us. However, we are considering other possibilities,” Zuckerberg said at the hearing.

Additionally, NBC News quoted Facebook COO Sheryl Sandberg as saying that if users want to opt out of Facebook’s data-driven advertisements they would have to pay for it.

“We don’t have an opt-out at the highest level,” Sandberg said on April 6. “That would be a paid product.”

New charge may put Facebook in difficulties

Paying for more security may not be a good way to enhance user data security because security expenses remain huge.

According to the latest survey of Kaspersky and B2B International, large firms spend nearly $1 million on every security breakdown. With Facebook’s current scale, such emergency situations would certainly cost far more than that.

Currently, most of Facebook’s revenue comes from advertisements. According to statistics of data analytics company Experian, Facebook and Google in 2017 embraced a quarter of the $100-billion global online advertising market. Thus, not doing business through advertisements will cost Facebook users heavily.

The problem is that the charges to use certain features of Facebook may reduce the number of the social network’ users, causing a huge fall in its revenue.