With the Facebook IPO ready to launch on May 18th, 2012 there have been questions how the world’s largest social media site will earn more revenue. Once you’ve gone public you have shareholders to impress and prove that you’re willing to make their investment worthwhile.
It seems that Facebook is ready to let at least one cat out of the bag by rolling out a test to specific users. Stuff.co.nz released the first information about this Facebook Status highlight ad being tested in their technology section. Stuff reports that a Whangarei man was given the option, “of paying to highlight status updates and picture posts with a yellow background when he logged on to his Facebook page this morning.”
TechCrunch wasn’t far behind two hours later covering the new Facebook test that will allow you to, “Pay To Highlight Your Facebook Status Updates To More Friends.” An interesting point that TechCrunch makes is that typically your normal Facebook status only reaches around 12% of your friends.
The new feature could revolutionize the way people communicate with their friends on the social network as the pay to play option takes hold. Entrepreneurs and businesses could use this option as an alternative to the traditional CPM / PPC Facebook Ads system. The costs in the current Facebook Pay Per Click market have been increasing over time.
Just recently in Search Engine Journal it was reported from a study from TBG Digital that in the last year the CPM (cost per thousand) model in Facebook has increased by 41%. The CPC (cost per click) market has increased over 23% since just the last quarter. This would provide another outlet to businesses but also bring in a revenue stream for people that wanted to have a louder voice with their friends.
If Facebook could harness revenue from it’s nearly 900 million users it could be big for the growth of it’s stock after the Facebook IPO. Josh Constine at TechCrunch doesn’t feel it’s that great of an idea however saying, “But Facebook is playing with fire here. The service has always been free for users, and a pay-for-popularity feature could be a huge turn off, especially to its younger and less financially equipped users who couldn’t afford such narcissism.”
Remember those Facebook Statuses that use to spread virally saying that Facebook will start charging for use? It seems that’s not too far off anymore, which clearly shows the potential evils of a company that must keep making more money when traded on the public market.