Facebook is awesome. You can’t argue with that. Just look at Tanija and Hedija, two sisters who lost their parents, and were separated from one another at the ages of 10 and 16 during the frightening mass confusion when Hitler invaded former Yugoslavia. They’ve spent their entire lives living a mere 100 miles from each other, never really knowing one another’s fate. That is, until the two were recently reunited by Facebook.
Facebook isn’t awesome for everyone, though. If you were banking on the social networking giant’s IPO as your golden Willy Wonka ticket, Facebook is probably something of a four-letter word to you. The well-documented plummet of the stock’s value has placed tremendous pressure on Zuckerberg and company to introduce new ways to monetize their foothold in the daily lives of their 1 billion members.
One such scheme that is currently in the testing phase is an update to Facebook Messages that, if adopted and rolled out to the whole of the platform’s user base, will allow strangers to send messages users directly. Currently, the “other” folder (shown in the image) is where Facebook sends messages that are considered less relevant to the user. The majority of users ignore that folder (or aren’t even aware of its existence) and check only their Inbox.
Now, Facebook plans to allow users, and very likely brands, to pay $1 to route their messages to the “real” inbox of non-friends.
The decision has been met with an early swell of criticism from bloggers and Facebook users. As this development could affect the strategies I recommend for our client partners, I thought I’d check in with a sampling of the DEG team for early thoughts on the move.
Overall, most of those who participated in my highly unscientific water cooler poll were unsurprised by the change. In fact, many on our team were surprised that Facebook hadn’t offered this service sooner. After all, it could theoretically compete for a significant share of marketing budgets currently directed to other one-to-one communication channels like email.
There was one response, though, which I found particularly interesting, and perhaps prophetic. “As a consumer, this is something I’ve come to expect,” shared one respondent, who then added that companies offering online services often create this type of disruptive environment to position themselves for a premium experience subscription model.
Could it be?
Is Facebook setting us up for Facebook Primo/Plus/Gold, a paid service where users can upgrade to cut out the clutter? Is that the real move being made here to monetize those 1 billion users?
It is perhaps a bit conspiracy theory of my co-worker’s, but it’s not outside the realm of possibility. You needn’t look any further than Spotify for an example, she points out. The very popular free streaming-music service offers just such an upgrade to a premium experience, eliminating disruptions by advertisers. The tiered offering, which has been adopted by 3 million out of 10 million users, helped Spotify jump from $97 Million in 2010 revenue to around $500 Million in 2012.
Those numbers are pretty compelling; especially when you consider that Facebook could make serious hay without coming close to the 30% upgrade conversion that Spotify has reached. To keep my job easy, I’ll keep my math simple. At $20 a year per user, a 10% conversion rate would look something like a $2 billion boost to a top line that is projected at roughly $5 billion for 2013.
Time, of course, will tell if my co-worker is more Nostradamus or David Icke. I’ll be sure to post it on my Timeline once we know for sure.