How much would you pay for a Social Networking service?

Categories: Social Networking, Web TheoryPosted on November 16th, 2007

There’s been quite an outcry from bloggers and Facebook users about the recent social ads product, that makes me wonder if advertising is not the best way social networks –maybe free (with ads) isn’t the model that users want.

There’s a few ways that websites can monetize (actually, I’ve got the master list here) perhaps one way to approach is to be part of a premium social network a paid site that users won’t mind. Charlene sent this article from Business week to me called “Social Networking of the Elite” which demonstrates several premium models for users.

Of course, there’s a few challenges if we approach premium model, it prevents others from joining, or leaves those not willing to pay stuck with a version of advertising, or someone who’s not able to join at all.

How much would you pay for a Social Networking service?
So let’s hear it from you:

1) How many of you would be willing to pay for a social networking service like LinkedIn, Xing, MySpace, BeBo, Facebook, especially if it removes all the advertising,
2) How much would you pay per month?

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This entry was posted on Friday, November 16th, 2007 at 10:56 pm and is filed under Social Networking, Web Theory. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

I don’t mind the ads. It’s like the suggestions on Amazon: sometimes they are useful and I use them; other times they are irrelevant and I ignore them. The ads can’t get me to do anything I don’t want to.

Posted by DJHowatt on November 17th, 2007 at 12:27 am

Last.fm has been offering a paid ad-free service for a long time - except it is surprisingly hard to find the navigation to actually pay for a sub. Many people pay for the ad-free Last.fm because it also gets you MORE content benefits - and allows you to do a bit more with your community of like-minded music nerds. Last.fm can do this because they are not *just* a social network, they are also a personlised radio station and content publisher (whose content is made sociable)

The problem I see for FB and MySpace offering a similar paid service is that they don’t have any inherent content - it is all UGC.

Posted by seb chan on November 17th, 2007 at 2:32 am

If people start charging for social networks it will be similar to the internet not being “free” anymore. It will be limited to a few who can afford it.
But has anyone looked at a “paid” internet model? It might be a profitable one which will consists of legitimate users.

Posted by Sanjay on November 17th, 2007 at 2:35 am

Jeremiah,
Another question is how much would users be willing to pay to NOT have their activity tracked, or have their data be available to third parties.

Posted by Mario Vellandi on November 17th, 2007 at 2:59 am

It’s not about the ads, for me, as long as they’re not “shouting” at me. But it would be nice to be in a community where I can put in a keyword to look for like-minded people and not have the majority of the results be from those who list themselves (with several entries) under every keyword they can think of, just to get the attention. Can’t stand the “look at me” entries who don’t have much more to offer than their latest party stats.

Posted by Ro on November 17th, 2007 at 3:58 am

You don’t have to exclude people to have premium service. I fully expect that these sites can and will offer a premium model that allows full access to you and you to others while at the same time clearing out the clutter. From there, the site can go on to offer premium content and other services.

Setting up the premium service inside the existing portal and infrastructure seems relatively inexpensive and all they have to do is charge more than the add revenue they will lose and you have a winning business model.

Posted by frank on November 17th, 2007 at 7:51 am

I pass over ads..they are like noise on the screen unless they are contextually relevant to what my intent on a page is, which is rare if ever. To the point RO makes on like-minded individuals driving the context, isnt that the intent of Facebooks social ad serving..

Posted by dirk shaw on November 17th, 2007 at 8:16 am

I would be willing to pay for Linkedin if it provided more of a forum for networking and learning, similar to physical world professional network organizations I am a part of. The current ads are not a problem because they don’t interfere with my use of Linkedin, but if they start to significantly reduce my ability to use the network tool I would have a problem with the ads. For example, if I could no longer update my profile on Linkedin without viewing a 30 second commercial, I would move to using a different tool or evaluate the value of the network tool and consider paying to continue using it. Right now Linkedin acts as a great way to keep contact info up to date, but it really needs next level applications and activities to make it into something I would pay to use. The seemingly non-intrusive ads are a fair trade off for the contact management service provided right now.

Posted by Brian G on November 17th, 2007 at 8:50 am

I could see social networks possibly adding an option to upgrade to not have ads, but I personally wouldn’t pay for it.

I can’t imagine the networks would have a pay requirement to join, because that would severely limit the number of users, and hence the value of being part of the network. That’s why the Wall Street Journal is bringing down the pay wall.

I think as ads get more relevant, people will mind them even less.

I think a lot of this is echoes of the 1995 angst about the internet itself becoming commercial instead of a pristine environment. People got over it, and they will on the Facebook advertising, too.

Posted by Lee Aase on November 17th, 2007 at 9:06 am

We alreay pay for xing in Germany.

I think it’s 5 € per month. As it is primarily for business, I’m afraid that money is worth it.
Being a student myself, i just hope that these 5 bucks will be worth it one day

Posted by Stefan Martens on November 17th, 2007 at 9:27 am

1. nothing

2. nothing

verbose: why should I pay anything for a site that has little or nor focus (and/or expert opinion)? if I knew there would be “qualified” users, then perhaps I would pay to join the club; otherwise, I would prefer to join ANOTHER club (which limits membership to only such “experts”). Why should I pay for something that gets me nowhere?

Posted by nmw on November 17th, 2007 at 10:58 am

These are all great comments, thanks all

(Via JFK airport in NYC)

Posted by jeremiah_owyang on November 17th, 2007 at 11:57 am

Agreeing with Mario.

Behavior tracking may be innocuous for a while, but if third party sites start sending off-Facebook activity to friends without permission, all hell will break loose. An avantage of Facebook is that “we’re all there”. With pay model, the populations could be inconsistent.

Posted by Jonathan Trenn on November 17th, 2007 at 12:30 pm

I share the ad-revenue with my networks. For example, the news submissions sites (DIGG -style), they can put their google adsense code in their profile, and a module shares 50/50 for the content they create. 50% to me for the (low) cost of running the site, and 50% to them for taking the time for submitting a link. They won’t get rich on it, but fair’s fair. Monetising User Generated Content, should mean Revenue Share User Generated Content.

Of course if I sell a site to Google or Yahoo for a gazbillion dollars, all bets are off. Nah, just kidding, I’d find a way of giving my members, bless their cotton socks, a clip of the sale.

You’d be surprised how little people care about ads if they are getting a revenue. I just wish there was also an option for them to donate that clip to a charity we could agree on. There probably is, I should look into it…

Shouldn’t Facebook be looking at a similiar model? I put a code in my profile and get a few cents if people click through? Or it gets donated to breast cancer research on my behalf?

Posted by Laurel Papworth on November 17th, 2007 at 12:40 pm

I do not mind the ads as they are on Facebook at the moment, but I would totally pay for a site like Facebook that provides a good forum for both business and personal networking. I think however that there would need to be a free trial period long enough to get to know the network and see if it is useful to the individual - probably around 6 weeks. That seems to be the time that it takes most people to get going and learn what they can do in a network.

5 Euros seems a good price per month for the potential in Facebook, not sure Xing is worth that though. It is just not that rich an application…

Posted by Iris on November 17th, 2007 at 12:47 pm

Oops, sorry, I didn’t answer the real question.

I have never, over the years of managing communities for people, seen a premium site based (solely) on removing ads be successful. That might depend on demographic (I work a lot with gaming sites) but there usually has to be a killer additional app that members want. And not too ‘killer’, cos that annoys the majority that don’t want to pay.

I personally wouldn’t pay ever - the exception is Ning, where I pay not to display ads on my own page(as opposed to not see ads on other members pages).

Posted by Laurel Papworth on November 17th, 2007 at 12:50 pm

Jermiah,

This is my take on the topic. I won’t pay for social networks. Why should I pay for something that just offers me a dashboard for my online social activity. In fact, I can do the same with some tweaking of wordpress and associated widgets. For me, paying for social networks (unless it offers exceptional value and not facebook value) is ruled out.

I am fine with ads as long as it doesn’t snoop into my online activity. Facebook’s beacon is something which I don’t agree too but Google’s ads are ok for me. I would still put my bet on ads but it shouldn’t be all that creepy like facebook’s pop up window asking if you want to notify your friends when you buy something from somewhere.

Posted by Krish on November 17th, 2007 at 1:24 pm

I think the underlying question is about value of the platform, regardless of ads. Bottom line how much is Facebook worth to you. Everyone’s budget is differnt, but it’s the only way to determine true value. To me it’s about $10/month. To put this in context it’s about the same as you’d pay for a good magazine and half of what I pay for the Wall Street Journal.

Now the next question is what would I give up if I had to the Wall Street Journal or Facebook.

That’s a tough one.

Posted by Albert Maruggi on November 17th, 2007 at 2:07 pm

Nothing for the time being. At this point the advertising is not annoying enough to pay to get rid of it. That could change in a minute if the ads get obnoxious and interfered with the functionality of the site.

Posted by Carter on November 17th, 2007 at 4:04 pm

For sites like Xing and ecademy, I stopped using them rather than pay up. Social networks need scale, and it’s hard to convince your friends to also pay. For a purely social network, it’s even harder.

Posted by David Berkowitz on November 17th, 2007 at 7:27 pm

Social networks rely on the network effect to be successful - the value of a network to its users increases as the size of the network increases. It’s all about connecting, and the more people you can find on the network, the more value you get out of it.
However, requiring payment in a social network would reduce the number of people who join it, hence its value would diminish, and the very reason for paying in the first place would go away…

Posted by Elad on November 18th, 2007 at 7:25 am

1. I’m exactly like Dirk Shaw on ads, they’re noise and I pass over them on the web, and in print. I’d pay nothing for an ad-free site.

2. Nothing.

I’m going to get “ads” either way. In an “ad free” site, the ads will come from the voice of the customer(voc), prompted or not. When ads apply to me and I’m interested, it’s a win-win-win (advertiser-social network operator-consumer). What I look forward to in this new era of advertising, is the power of the consumer’s voice to arrest the perpetuation of bad advertising (be it false, intrusive, or for product reliability).

It seems that there are plenty of people willing to complain about the ads, but not enough of them willing to pay for it to be a viable option.

Posted by Dave Barger on November 18th, 2007 at 3:12 pm

Everything should be free. The consumer is the value. Flip the current model on its head, now there’s a new model. Consumers owning their own data. The next generation applications will leave these issues in the dust. Networks will be free, ad specific, and opt-in.

Posted by TedC on November 18th, 2007 at 6:59 pm

Hi Jeremiah!

1. Nothing*
2. I think $10/month is where I would set the limit.

* The only reason I would pay for a social network would be if I would get “something” in return. “Something” is not just access to other members.

For instance, I am a premium member of Microsofts XBox Live which costs appr. $10/month and in return I get to download premium content and play xbox online.

Also Im paying naymz.com $7/month to have my name appear on the top of google (when people search my name).

I think it’s naive to believe that everything can be based on ads and ads alone. And I believe that the attitude towards paying for online services is changing. Particularly the younger generation. Obviously they dont mind spending $10-20 on virtual goods, increased abilities in online games etc.

(I was born in the 70s, so when I say younger I mean people born in the 80s & 90s)

Posted by Emmanuel on November 21st, 2007 at 11:02 am

I don’t mind ads on social networks. I don’t even mind targeted ads (in fact, I prefer them to untargeted ads because, at least I might be interested in the product that’s being pushed). What I don’t like is the whole Beacon thing that Facebook has started doing.

I haven’t been affected by it, yet, but it does bother me that there is no easy way to opt-out.

Would I pay money to use an ad-free social network? I’m honestly not sure. I suppose it would depend on the cost.

What would I be willing to be per month? Again, it’s hard to say. I’ve never really sat down and thought about what my social experiences are worth, in terms of a dollar figure.