By Andrew Ballenthin
There's a substantial amount of buzz going on over Facebook's decisions to further commercialize the value of it's technology and assets (user information). While the decisions Facebook is making may come as a shock to users it awakens the business questions in social media that have not been getting addressed - how does a social network monetize it's model beyond advertising income?
While users may feel that they are being hard done by Facebook keep in mind that over the past six years now up to 500 million users have had a free ride without being asked to give back to the Facebook community financially in any form. There is almost no other business scenario any shareholder would approve to run for free for hundreds of millions of users on their nickel without a cost to the community or users.
There is a great confusion perpetrated from purest and social media evangelist I call the "flower child mentality". We've listened to self proclaimed social media guru's tell us peace and love are free and social networks should be too. This is dead wrong. We learned during the dot come era that eyeballs, page views and wild stock valuations weren't the fuel to keep only web based businesses alive. Social networks and websites need paying customers and solid revenue models. Only websites and businesses that can deliver an ROI to their shareholders deserve to continue thriving despite know matter how novel the concept that can be achieved with technology.
Facebook deserves to monetize through any possibly channel it can. It does not have to consult users. It does have an obligation to protect data, however, so does every other site. BUT any users in this age of searchable electronic trails on anyone and anything is naive to think that they have a right to have a free ride from a social network and not be held ransom to its policies and changes.
I was on record a year ago that in the next three years (now 2 years) social networks are headed for a cataclysmic shake-up. Just like the dot.com era that saw free use business models go the way of the dinosaur, so will similarly modeled social networks that do not put in aggressive monetization programs to pay back their stakeholders. Facebook is the start of more changes to come in social media, hold on to your hats. Reality is catching-up to free use social networks and what being online really means to a world that shrinks by the nano-second where ultimately, I do hate to say, money makes the world go around even in cyberspace.