Should Facebook offer a paid, ad-free version?

Facebook money

By Heather Kelly

CNN

(CNN) — Twitter co-founder Biz Stone has been using Facebook quite a bit lately, and he has some friendly advice for the company, from one social network to another.

Stone thinks Facebook should offer an ad-free subscription version for $10 a month.

A premium version of Facebook could appeal to people who don’t want to wade through the barrage of ads for a juice-cleanse delivery service or Edward Snowden fan fiction (these are the actual ads I currently see on my Facebook account).

“In general, the ads on Facebook don’t seem particularly useful or engaging. However, ads on the service are universally tolerated because that’s what makes Facebook free, and free is nice,” Stone said in a post on Medium.

The company could also throw in some special features for these Premium customers to sweeten the pot, according to Stone, though he doesn’t suggest anything specific.

He does a bit of math to show how lucrative a paid tier could be. If just 10% of the service’s 1 billion active users dropped $10 each month, the company would make $1 billion a month.

For the first quarter of 2013, Facebook reported making just $2.85 per user from ads in the U.S. and Canada. That number is lower globally.

Advertising makes up 85% of Facebook’s revenue. The rest comes from payments and other fees, which include social games and virtual goods, and amounts to about 65 cents per user for the quarter.

The subscription model is common among tech companies offering content, such as music or TV shows on Pandora, Hulu and Netflix. But it hasn’t taken off with many social networks. LinkedIn offers premium accounts that have beefed-up search, mail and other features starting at $20 a month.

As an April Fool’s joke this year, Twitter announced a premium service that, for the low cost of $5 a month, would include all letters in tweets, including vowels. The lowly free service would be rebranded Twttr and include only consonants.

Stone isn’t joking with his new suggestion, though. In his post, he also said that Facebook was too complicated.

“The truth is, if I can’t figure an application out in a minute, I usually move on to something else. Too many settings and options frustrate and confuse me. I like making simple stuff because I enjoy simple stuff,” he said.

He recently hired a few ex-Facebookers for his new startup, and they guided him through optimizing all the settings for the least overwhelming experience. He’s now using Facebook regularly too keep in touch with family, but like any regular Facebook user, he still has gripes about how it works.

This isn’t the first time someone has suggested a paid, premium version of Facebook. But because he’s Biz Stone and Twitter is a hugely successful social network, people are paying attention — unlike when your distant cousins or people you knew in high school complain in Facebook’s news feed.

The-CNN-Wire
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