Facebook monetizes key service

The ability to contact another person whom you’ve never met and doesn’t yet know you: this is a pretty valuable service to provide. How valuable? We shall see. Facebook announced it will start charging a fee for members to send messages directly to non-friends (link):

Today we’re starting a small experiment to test the usefulness of economic signals to determine relevance. This test will give a small number of people the option to pay to have a message routed to the Inbox rather than the Other folder of a recipient that they are not connected with.

Several commentators and researchers have noted that imposing a financial cost on the sender may be the most effective way to discourage unwanted messages and facilitate delivery of messages that are relevant and useful.

This test is designed to address situations where neither social nor algorithmic signals are sufficient. For example, if you want to send a message to someone you heard speak at an event but are not friends with, or if you want to message someone about a job opportunity, you can use this feature to reach their Inbox. For the receiver, this test allows them to hear from people who have an important message to send them.

Facebook’s charging members to use Facebook services — charging them to produce the data Facebook then owns — is a treacherous path. First, Facebook is not the only social-media game in town. Second, and more important, Facebook’s action suggests earning hard, tangible revenue is more important right now than collecting intangible data. Certainly, the fee will stop many from sending messages, connecting with people, producing data, that they otherwise would have produced, had the action been free.

I tend to judge Facebook as a data-collection company, as distinct from judging them solely as a social-media service provider. Both understandings of Facebook are valid. But is Facebook worth $100 billion because they can charge a dollar for a message? Or because they collect, own, and analyze the best social-science data in the world? The decision to charge a fee, to my mind at least, potentially damages the data-collection process to the benefit, hopefully, of greater revenues. Which makes sense, because Facebook is a public company now, and lives at least partly in the Wall-Street world. Moreover, data are intangible assets difficult to account for. Nonetheless, I find it a bad sign that a plan to raise revenues gets in the way of the data collecting, rather than results from the data collecting.

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This entry was posted in Facebook, intangible assets, intellectual property, prices, Symbolic data, the database, theoretical drivel. Bookmark the permalink.

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