Weekly Social Networking Digest

April 12, 2009 | By Marc Porcelli | 1 Comment »

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Jeremiah Owyang, who is an analyst with Forrrester Research has a great personal blog called, Web Strategy by Jeremiah Owyang. Jeremiah has a very useful weekly digest. In this weeks edition, there is a section on Facebook’s financial situation where there are links to a Forbes article that attempts to break down how Facebook could raise $100 million a year through an average cost per user and advertisers per user. Among the interesting statistics in the article is how an average of 0.05% of display ads on Facebook are clicked on, very low!

Finally, there is an equally interesting, and perhaps more relevant link to an article that appeared in BusinessWeek that asks, Does Facebook’s Business Plan Include Premium Memberships?. Since Facebook hit 200 million users this past week, it is a very relevant question to ask. “Most estimates peg Facebook’s revenue at something between $1 and $2 per user annually – assuming $300 million (an unconfirmed figure) from 200 million people – which is quite small for a site with that many regular users, even for a free Web service. Rival social network MySpace, for example, is estimated to take in between $6 and $7 in ad revenues per user. ” If Facebook does in fact make around $1-2 per user, per year, why not charge users a small nominal fee to access the site, say $9.95 a year?