Desperate Days @Facebook

Do I have any interest in any of this?  Nope….

This week Facebook annnounced that it was going to start changing up to $100 per message for people who want to email someone who is not one of their ‘friends’.

Really?

Yep!

Here it is, in The Guardian.

“Facebook is extending its experiment charging users to send messages, offering users access to the accounts of VIPs – including Facebook founder Mark Zuckerberg – for as much as $100 (£61) per message.

The offer was spotted by Mashable reporter Chris Taylor who tried to message Zuckerberg, but was told the message would be routed to the less visible “other” folder, unless he paid the $100 fee.”

Pathetic?

You bet.

But also a sign of something much more serious.

Facebook is, in the long run, unsustainable.

At least unless they find a better revenue source than advertising.

Advertising on Facebook does not work.

Note the ads that accompanied my ‘home page’ this morning:  Ancestry.com and online gambling.  Do I have any interest in any of this?  I also got an offer to go ‘Snow tubing” in New Jersey (where it was 57 degrees F this morning).

You read a lot about how Facebook (and other online sites) are accumulating lots of personal data on you. From the ads that they are offering me, they don’t seem to be doing a whole lot with the datat they are accumlating. Yesterday, I was offered an online subscription to The NY Times (which I have had for more than year.  It would not take much to have figured that one out).

There is good news and bad news in this.

The good news is that your anxiety about Facebook gathering up all that personal data on you is misplaced. Clearly, they don’t have the vaguest idea of what to do with it.

The bad news is that, IMHO, Facebook is headed the way of MySpace, AOL, Zynga and a whole history of ‘flash in the pan’ online companies.  Big today – gone tomorrow.

They are gone because at the end of the day, a successful business is not about ‘eyeballs’ or ‘members’, it is about revenue.  No revenue, no business. (Just ask The NY Times, who announced yesterday yet another round of newsroom lay-offs because of a drop in ad revenue.

“Last month, Times publisher and chairman Arthur Sulzberger Jr. said that all divisions of the newspaper needed to “identify cost savings” during a time of plummeting ad sales revenue.”

It may be that the whole notion of ‘advertising’ (that is, encouraging people to go to the store to buy something) is archaic in a world in which you a) no longer need to go to the store and b) you can buy it right here, right now, online.  Also, who really even looks at ads online, let alone is influenced by them?  Anyone here ever buy something they saw advertised on Facebook?  Hands down.  Oh, there were not hands up to begin with.

Clearly, advertisers are starting to get the message that online ads are essentially pointless.  Last year Forbes announced that GM was ‘yanking its Facebook ads‘ entirely.

There’s no question that Facebook is popular.  But so is Tic Tac Toe.  Facebook now has a reported 1.1 billion ‘members’ and took in a bit over $3 billion in revenue from advertising.  That sounds good until you do the maths.  Facebook is, in fact, making $3 per member, per year.  or $0.008 per member per day.  This is not a business.

This is why Facebook is now going to charge $100 so that you can send an email to Mark Zuckerberg.

To drive up the revenues to parity with Apple’s 2012 income, Mark Zuckberg simply has to recieive 156 million emails this year,  at $100 each.  Or 4.2 million emails a day.

Maybe one or two of them will be about Snow Tubing in New Jersey.

Copyright Michael Rosenblum 2013