Facebook Should Embrace Micro Payments


Facebook likes to say its business is all about users and growth. Expansion is the priority at all costs.

But it is missing huge opportunities to turn its social networking platform into the next Google.

Members expect everything on Facebook to be free. But many would probably not balk at paying small sums for add-on services and virtual goods, and Facebook would find it is not just a social phenomenon but a financial one.

For instance, the company this week began offering vanity URLs to users who might like to customize their site addresses. Why not charge $5 for the feature, asks Dan Merritts, vice president of marketing at the Internet company Eduify.

It is important to get people used to notion that things on a site have a cost, agreed Rashmi Sinha, co-founder of the Internet site SlideShare, speaking at the OPENforum 2009 conference in Mountain View. “I do believe in building a product structure where monetization is a crucial piece.”

Some argue that Facebook is paying enough attention to revenue. After all, estimates are that its annual sales are about $500 million.

When users reach half a billion, revenue will be $1 billion, predicts Ro Choy, chief revenue officer at RockYou.

But the potential is much greater. “There is so much time being spent on these platforms,” such as Facebook’s, says Sharethrough CEO Brett Keintz. “That is going to keep growing over time. We see them as NBC and Fox.”