There’s no such thing as a free web app

I recently noticed that many of my friends’ Facebook posts were not appearing in my news feed. It became particularly apparent when I went to help out a friend and she posted a picture of me working and a “Thanks” message as separate posts. Then later in the day I met a friend who said “good picture of you working hard for a change”. The picture did not appear in my News Feed even though I was tagged in it and there were a couple of comments. However, the “thanks” message did appear.

Then I read this article which begins to explain what is going on. Facebook are not sharing everything with everyone any more.

This article made we think about the future of online advertising and social networking.

Where will it end?

The reasoning behind this is clear. Facebook need to make money. There is no such thing as a free service, it’s always going to need some money and the more users you have, the more money you need to keep things running smoothly. Facebook have a lot of users and will churn through a lot of money for computer infrastructure and people to run it.

The traditional method for media to make money is advertising. Whether television, radio, newspapers or whatever, advertising has been decreasing the end user cost of media for years. On the internet, we are all familiar with the sidebar adverts on many free services. They are reasonably unobtrusive and I expect most people simply ignore them.

So, how could Facebook increase their advertising revenue? A social network tool is all about the activity stream so the logical place to put more adverts is in that stream. A similar service that has already been down this route is Youtube. You used to be able to view almost any clip without any adverts either before or during the clip. Now most videos have an advert either before play or as an overlay.

Now, consider other free services and where they could introduce adverts. I’ll start you off with a couple of frightening scenarios :
E-mail : Imagine your free email provider pushing spam into your Inbox. Or following YouTube’s model and presenting you with advertising before you get to your message. If computers get good at language, they could start to put it inline with the message text. In an order confirmation email from Widgets-R-Us you could see “Thank you for your order of a Widget. Have you considered buying Widgets from Widget Co. instead.”
Photo sharing : In the middle of your holiday snaps, images that are adverts. If they get really clever, use face/body detection to merge pictures of you into adverts.

We all dislike being bombarded with adverts and most people have boundaries where they consider adverts acceptable or not. If Facebook stray too far into the unacceptable area, people will look for alternatives that do what Facebook used to :

What’s next?

A few ideas for possible future scenarios are :

Local nodes.

Some entity that you feel some affiliation with sets up a service for a small number of users. This could be a free service supported by less intrusive advertising or a paid service. When I use the phrase “local” I was initially thinking of geographically local but then it occurred to me that the internet makes everyone only an IP address away. This doesn’t need to be only a social networking provider, a local service could provide storage and email services as well. This would be similar to early ISPs who all wanted to provide you a webpage and an email account and various other services.
Unfortunately, this decentralisation breaks the current “Content Delivery Network” model. With a massive centralised service like Youtube who can decide which videos are getting the top 10% of hits you can place those 10% of videos on CDN nodes around the world. So that instead of all your videos living on your central servers, they may be stored within a few miles of the end user. This saves on massive amounts of worldwide bandwidth. Lots of smaller nodes makes that unworkable.
“Local nodes” would require the “federation” of social networking. The popular backend protocol XMPP does allow federation but a lot of current social networks have remained as islands. Lots of linked islands could one day be as powerful a network as the continent of Facebook.

Government sponsored social networks.

There was a time when people read newspapers and you could discern the political leanings of an individual by the paper they read. Now, everyone uses Facebook which by itself is no more political than the paper a newspaper is printed on. But if the management of Facebook wanted to, they could overtly promote certain political views or restrict the spread of opposing views. This could be a very powerful tool.
This means we have a gap in the market for a social networking tool that cannot easily be biased. It would need to be controlled by an independent body like the civil service. If it were a government sponsored system, there could perhaps be back end interfaces into government run identity management systems which would prevent the problem of fake accounts.

No more free services.

A less extreme scenario is that we all realise there is a cost to running something like Facebook, Hotmail or Flickr and start paying for it, if we want the system to remain reasonably ad-free.
I can predict a “premium” version of Facebook. If they keep the price sensible, I expect a lot of people will take it up. It would cost me £5 to promote my post to my 100 friends. IMHO that’s a bit expensive for sharing a joke. I think a few pounds a month would be acceptable to most people for providing a social network service with minimal advertising.

To conclude

I feel like the playing field has been changed. But in a way that we are all familiar with already. The internet has become analogous to television/radio. You have stations that are so full of adverts they are painful to watch. You have some stations that you subscribe to and the advertising is reduced. You have the government sponsored channels, that churn out a lot of good content but can be a bit risk-averse in trying new things. And you have “PBS” the free station that churns out low budget content which occasionally has a few gems. And, there is still the opportunity for pirate radio stations to broadcast without paying for the content.