WOULD YOU PAY TO BE ON FACEBOOK?



It's insidious. It's addictive. It's the productivity-sapping bane of offices worldwide.

On October 24, 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for US$240 million, giving Facebook a total implied value of around US$15 billion. Knowing Bill Gates, Facebook must be rolling in dough, right?

Apparently not, it seems.


A. How does Facebook make money?

How many people are on Facebook? No one knows exactly, but latest estimates range from 175 million to 250 million users.

A cursory internet search showed the following: According to founder Mark Zuckerberg, revenues of US$300 - 350 million are projected for 2009 [Feb. '09].

FB is supposed to be breaking even, but they plan to spend US$200 million on servers next year, which might land them in the RED.

Sources of revenues are essentially the ff:

i. Advertising (brand ads, deal with Microsoft)

Apparently, companies pay Facebook a hefty sum of money to place their ads on the right-hand side of the screen. These ads are supposedly customized based on your stated interests in your profile, so that there is a higher likelihood they would be of interest to you.

But really, when was the last time you actually clicked on a banner ad? Enough said.


ii. Virtual goods

Facebook launched Gifts on February 8, 2007, which allowed users to send virtual gifts to their friends that appear on the recipient's profile. Gifts cost US$1.00 each to purchase, and a personalized message can be attached to each gift.

But can this be a major revenue driver in the coming years? I would think that people are more interested in answering quizzes, and tagging friends on countless party photos, and coming up with feeling-profound status updates (ex., "Chubbs thinks happiness is optional. Que sera sera."), than in giving each other virtual gifts.


Facebook's database on its users is a veritable goldmine, and there have been plans to sell the information to other companies, but these have been hindered by protests from users about invasion of privacy.


B. Alternative revenue-generating scheme for Facebook

Well, here's my suggestion: Stop making Facebook a free site, and START CHARGING USERS.

Of course, the idea of pay-as-you-go subscriptions for internet content is not entirely new. Stanley Bing, columnist of Fortune magazine, is skeptical of this approach. In his August 17th column, he barked, "How about Facebook? Would millions of lonely, homebound losers be encapsulating their lives in all their digital splendor if they had to whip out a credit card to do so?"

Hey, don't discount it entirely, Bing-O! I believe it's worth a shot.

Let us discuss the arguments then:

No. 1 : "If Facebook is going to start charging me for using its site, i'll just delete my account." (or not bother to log in anymore)

This is obviously a valid concern. How many people would be so disgusted / dejected / disappointed / that they would actually stop using Facebook?

Not everyone, I think.

In fact, I would bet that "heavy" Facebook users (i.e. people who log on everyday, post their pics - even those back in grade school, etc.) would be "sticky", and remain loyal to the site.

Let's do the math. For example, if 75 million users drop out and you collect US$5.00/year from the remaining 125 million or so users, that's easily US$625 million in revenue.

The key here is to make the payments as unobtrusive as possible, and reasonable enough so as not to make a significant dent on the individual user's wallet.

How can it possibly be done?

a) "Micropayments" on selected actions

Off the top of my mind (this is not an exhaustive list) :

Logging in to view friends' pics and profiles - FREE
Updating your status / profile - FREE
Posting comments on friends' pics and "likes"- FREE
Taking quizzes - hmm....okay, FREE

Adding friends - say, FREE for first 300 friends, and you get charged something like 1 US cent for each friend exceeding this number

Uploading pics - can be FREE for first 50 pics, and then a 2-cent charge on each pic thereafter (hey, bandwidth does cost money)

SuperPoke! - definitely 1 cent for each

Playing games - perhaps FREE at first, but if you keep on playing Yoville or Typing Maniac for hours on end, it will cost you.

The total amount you spend each month would then be charged to your credit card bill.

Of course, the general level of activity would likely slow down, as people think twice about taking certain actions, etc. You might even argue it makes it so much less fun!


b) Purchase of stored-value units

Taking off from the prepaid cellphone card industry, one can opt to buy a certain amount of units (say US$10.00) online from Facebook, which would be debited as you play games, give gifts, upload pics, etc.

This would work for users who fear they would be unable to control their "spending" on Facebook actions.


Meanwhile, Facebook management can allay advertisers' concerns, by pointing out that the members who dropped out tend to be those people who likely didn't log in too much; didn't update their profiles; only had a few friends, etc. (in general, those people who never got into the spirit of things, as it were). Hence the remaining membership are the "quality" ones, who are more receptive to ads.

Further, they can continue to beef up content and features, to prevent the drop-out rate from becoming too high. To convince non-users to sign up under the new pay-as-you-go scheme, they can make an online ad campaign that goes something like, "Facebook is where the fun is." or "Facebook: Where all your friends are talking about everything, except you."


No. 2 : "If Facebook is going to start charging me for using its site, i'll just move to other social networking sites."

Again, this is certainly a valid response. But which site(s) offer a viable alternative to Facebook?

Friendster is passe and full of scammers. Multiply and MySpace's features are lacking in comparison.

One might make the following riposte, "Well, i'm sure someone will create a new social networking site, with even better features, and everyone will go there."

True, this is very possible. But would this hypothetical new site's business plan be based on advertising revenues only? How then would it go about making a positive return on investment?



So, dear reader, what do you think? Is the above analysis actually worth contemplating about? Or is it pure hogwash?

Hence, I'm asking you (yes, you) this question: Would you pay to be on Facebook?

Hit the comment button NOW.

COBRATOX cream with snake venom
(Bonus Post, Saigon-Siem Reap-Hanoi-Halong vacation)


I guess i had ended my series on Vietnam and Cambodia too soon. Given my love for weird, oddball stuff, i couldn't resist posting about this new discovery below.

While browsing at one of the numerous souvenir shops at the Cu Chi Tunnels, my interest was piqued by this product:





Yes, you had read the box correctly, "Cream with Snake Venom". It is intended to provide relief for arthritis, rheumatism and similar ailments.

While other creams / ointments / liniments such as Bengay (from USA), Salonpas (from Japan), White Flower (from HK), Counterpain (from Thailand), Omega (from Phils.) and Tiger Balm (from Singapore) are basically combinations of Menthol / Methyl Salicylate (Oil of Wintergreen) / Camphor with other essential oils, Cobratox does them all one better with its unique ingredient.

It says right there on the side of the box, "Dried venom of cobra 0.0005 g".

Cobratox is produced by the formal-sounding Center for Rearing, Planting, Researching & Manufacturing Pharmaceutical Products of Military Zone IX.

I don't know about you, but what comes to my mind is a bunch of grim-faced men wearing combat fatigues slitting open the throats of writhing cobras and extracting their venom before stitching their insides back again before putting them on these big glass jars filled with water, which men are supposed to buy to increase their stamina in making . . . ahh, "Boom Boom". [A Vietnamese euphemism for . . . but let's not go there, shall we? ;D]

It was kinda cheap at 20,000 VND (around US$1.15) for a 20 gram tube, so i figured there was nothing much to lose if it didn't prove effective in relieving the pain from my tennis elbow.





The accompanying piece of paper inside the box wasn't of much help (see above pic), being in Vietnamese, but there are simple instructions to "apply to painful area with massage 2 times daily" on the box.

I am not so sure about the science behind using dried cobra venom as a painkiller ingredient; i have this vague notion that cobra venom kills you by paralyzing you, so i guess tiny quantities will just deaden your nerves a bit (thereby providing pain relief), no? :D

So, the 500,000 VND question is, is Cobratox more effective than Bengay, Tiger Balm and the like?

I've used it for a week so far, and here is how Cobratox performs based on the ff. criteria:

Heat - packs a bit of a wallop in giving that warm, burning feeling to temporarily relieve joint pain

Odor - neutral, meaning no discernable "snaky" smell, haha :D Would be nice if it had some sort of scent.

Feel - non-greasy, easy to rub into the skin. Not slimy, thank God!

Bottomline, it performs about the same as other pain relief ointments, so perhaps the REAL reason to use Cobratox is to be able to stretch the truth a bit and brag to your gymmates / sports teammates / etc. as such:

"My doctor has prescribed alternative therapy for my tennis elbow. We are applying dried cobra venom on it, which will eliminate the pain, AND as a side effect, increase my agility and quickness on the courts, AND increase my stamina to make Boom Boom. Unfortunately, the ointment is highly toxic and highly limited, so it is not available to the public."

HALONG BAY
(Conclusion, Saigon-Siem Reap-Hanoi-Halong vacation)





Halong Bay is a UNESCO World Heritage Site, located at Halong City at the northeastern part of Vietnam. Going to Halong City from Hanoi takes around 3 hours by van, on surprisingly well-paved roads.

Halong City itself is a singularly charmless place, with the usual mix of hotels, casinos and shopping places. Located just 90 minutes away from Vietnam's border with China, i'm willing to bet that most of these developments in the city were funded by Chinese investors. Some establishments seem to cater primarily to Chinese clients,
being fronted by Mandarin-speaking staff and quoting prices in RMB.

Halong Bay is also known by the more dramatic name [drumroll, please] "Bay of the Descending Dragon." Legend has it that dragons once descended from heaven and spouted streams of jade droplets that fell into the waters of Halong Bay, forming thousands of islands and islets, and helping defend Vietnam against attacking armies.

Of course, the truth is a bit more prosaic. The islands are limestone rock formations, with caves, lakes, etc. for exploring in the bigger ones.





Truth be told, this was the part of the trip i was looking forward to the most, and was quite happy as we boarded the Chinese-style "junk" for our tour. I had heard instances wherein the junks and sampans are not allowed to depart for the Halong Bay cruise, due to fog and inclement weather. Thankfully, the sky was all clear today.





The view from the upper deck of the junk was lovely. It was quite a sight to see the various shapes and sizes of the limestone karsts and isles, with the sails of the boats silhouetted against the horizon. We dropped by a cave (for some fairly rigorous spelunking), and checked out a 'typical' fishing boat as well.

Of course, the preferred (in)activity of a certain grumpy slacker i know is just to stretch back and relax, like so:




On board, we partook of an excellent seafood lunch, before turning back to return to shore.





Aside from the daytrip cruise we took, there are tour operators offering overnight and even 3D/2N Halong Bay cruises, on board junks which are fitted with cabins and other amenities.

Halong Bay is one of the candidates for the New 7 Wonders of Nature campaign. Click here if you want to check the official site and vote for it.