Maybe they won't be charging specific user fees, but the users of Facebook have to pay something because they're the ones with the money. If they don't pay user fees they'll have to pay in terms of desktop space,or annoyance factor or something. Ads pop up or pop under, or do something that require you to do something to them to make them go away. This will annoy some small portion of the existing users. Most won't care, but some - a few at least, will think that the upside of Facebook isn't worth the hassle of all the haranguing to buy things.
Well the Ads will be focused!" say the Facebook fans. OK, but I'm already interested in sport shooting so I don't need Facebook's Ads to tell me what's going on in that business. I'm not shopping on Facebook, I'm just socializing. (I'm not actually on it at all, I'm just saying) So the Ad's don't really mean much. Does Remington Imagine that I had never head of them until their Facebook Ad shoved itself into the middle of my conversation with my cousin from Houston? Do they imagine that's the moment to tell me about some new product offering or to alert me to a special deal? I don't think so. Mostly I will just find it annoying because I was doing something else.
Eventually, Facebook will run out of new users. So long as they still bring in new users fast enough to make up for the users dropping off, everything is fine. But when they run out and that number takes a down tick, it's all over for Facebook. They will need to incrementally increase the money they get from each user, which forces them to increase the burden on each user, which alienates a few more, increasing the burden even further, and so on, and so on, down and down and down until they are Myspace.
Mark Zuckerberg will end up a billionaire either way, and good for him. But I don't see this as the revolutionary product he claims. He hasn't invented a new way to socialize, he's just shoved a computer into the process of actual socialization, and put an ad over the top of it. But in the end it's still your life. There are lots of ways that you can relate with your friends and your family without paying anyone. And the higher the cost/burden gets for Facebook, the more appealing those other methods will become again.
I wonder how long it will take before the dolts at CNBC figure out that it was mostly the existence of "SecondMarket" the private stock distribution market that undermined the Facebook IPO. I know they've already mentioned that by letting Facebook run their own underwriting and pay no fees they eliminated the incentive for the banks to support the stock. I'm an entrepreneur of sorts so I appreciate the entrepreneurial spirit. But no one succeeds alone. Maybe if Mark Zuckerberg were a little older he'd have realized that.
I got the ultimate sell signal for Facebook this past weekend. I spent 2 hours on Saturday chatting with two beautiful young girls - ages 19 and 22. One was a 6 foot tall 120lb Russian girl with long blonde hair. The other was a petite half English half Chinese girl who could not have been any cuter if she were riding a unicorn. Both were intelligent, charming, and full of big smiles. If I were their age and single, either one of them would have needed a huge club to fight me off. They are what every young man (and a considerable number of older men) are looking for.
But neither has a Facebook account. They don't see the need.
Tick Tock on the Facebook thing.