Would you pay for an add free Twitter or Facebook? This is the title of an article CNN published on its website couple of months ago.
And this is a very interesting question. You know that even though I am an early adopter and strong believer in Twitter and Facebook future as a mass media, I am still wondering about how those companies are going to become profitable in the next few years. Indeed, I have always questioned the strategy of many Web 2.0 start up to focus on developping a large base of users without even thinking for a second about how to make profits out of it.
And so far, I have been right: Facebook's IPO has been a failure, I believe no one could say the contrary. Investors are worried about the revenue growth pace of Facebook, and its ability to perform as expected.
Same thing for Twitter, where most of their initiatives to implement ads to generate revenues has failed.
Now, people have been used to a free Internet, where services are paid by companies through ads. But the thing is there are way too many services on the Internet which base their revenues on ads for brands to finance all of them! And with the economical crisis, we all know that advertising budget is the first one to be frozen.
So now, would people pay to use Twitter or Facebook? The article has a good point: "If we're selling a service, our customers are our users and our job is to make our users happy,". Indeed, that is what Facebook and Twitter have been working on: Having a great product for users. But they have not integrated at an early stage of the process the way to get their "clients" (brands) involved in it. If users pay for the service, Facebook and Twitter will go on being interesting, but if now their main focus is to get as much advertising money as possible, I believe the service will deteriorate and in the end, they will never be able to become as profitable as they could be.
I would personnaly pay for Facebook or Twitter. The access to my network and to the information it allows me to get is just great, and I don't see myself living without it. Now the thing is how much am I eager to make out of it? VCs have based the value of these companies on how much money they can generate from an average user. Am I eager to pay that kind of money to use these services?
This is the answer to be asked. And let me be more precise about my thought: On the long run, to be honest, I don't see how Twitter or Facebook would be free.