Facebook may see more potential profit from advertisers than from consumers.
If Facebook can come up with a way to dramatically increase an advertiser's provable ROI, advertisers will kill each other to get to the front of the line. "You mean we can suck even more money out of Facebook users by knowing even more about them, thereby influencing them even more effectively?" In fact "advertisers" can probably make a good ROI from their Facebook spending without ever showing you an ad in Facebook, just by data mining and tailoring their non-Facebook ads. Just because you don't see an ad doesn't mean you haven't been sold.
If Facebook were $25/year for a no advertising account, would Facebook consumers elbow each other out of the way to pay $50/year for more effective ways to see what their friends ate for breakfast? Probably not. And besides, you'd probably still be sold to advertisers as data per the previous paragraph.
I pay for email and I pay for bookmarks (and I don't have a Facebook account). I have a low grade chronic fear over what will happen when my email and bookmark providers can no longer increase their profit to their satisfaction, or to their investors' or acquierers' satisfaction.
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Facebook may see more potential profit from advertisers than from consumers.
If Facebook can come up with a way to dramatically increase an advertiser's provable ROI, advertisers will kill each other to get to the front of the line. "You mean we can suck even more money out of Facebook users by knowing even more about them, thereby influencing them even more effectively?" In fact "advertisers" can probably make a good ROI from their Facebook spending without ever showing you an ad in Facebook, just by data mining and tailoring their non-Facebook ads. Just because you don't see an ad doesn't mean you haven't been sold.
If Facebook were $25/year for a no advertising account, would Facebook consumers elbow each other out of the way to pay $50/year for more effective ways to see what their friends ate for breakfast? Probably not. And besides, you'd probably still be sold to advertisers as data per the previous paragraph.
I pay for email and I pay for bookmarks (and I don't have a Facebook account). I have a low grade chronic fear over what will happen when my email and bookmark providers can no longer increase their profit to their satisfaction, or to their investors' or acquierers' satisfaction.