Finding Profits for Facebook

A substantial part of the world wide web is available to information searchers and surfers at no cost to the consumer of that information or service. I have therefore wondered how come very few purely web-based businesses are able to make sufficient money to sustain their activities. A leading example for me is Facebook and other social network sites that have millions of users but are yet to make any cash for their investors and developers.

Farhad Manjoo writes in the Slate Magazine that a large number of these businesses are in dire need of a plan to ensure that they make some money. This may run counter to the natural instinct of most Internet businesses which insist on developing a fine product and thereafter seek a revenue model. It is often stated clearly that Google's founders were not overly interested in its commercial applications until they became certain that it was the top search engine. While this model appeared to have worked well for Google, I do not see any reason for the assumption that this is the most appropriate model for Facebook. As the writer suggests, the institution of a payment model may lead to the reduction of clients but it would have the advantage of demonstrating to the developers whether the service has much value at all.

To my mind, no approach is necessarily better than the other and the model adopted by Google is prudent for the service that was new and one that requires numbers upfront so that advertising can be sold. It is not clear that social interaction sites would succeed in the same way. What happens when they start to charge?