So I guess all of the rumors are true. In a press release on late March 31st, 2014, Facebook Founder, Mark Zuckerberg stated, “…unequivocally that Facebook is to move towards a paid business model in the very near future.”
This is the biggest news from the social media giant since Facebook held its initial public offering (IPO) on Friday, May 18, 2012. Zuckerberg explained that the company needed to recoup losses in their Facebook Ads and Sponsored Stories department, as well as, deficits from its recent tech company acquisitions. Facebook has been in the news, as of late, with its failed purchase of SnapChat, and more recently, in its $19 billion acquisition of Whatsapp and the $2 billion acquisition of Oculus VR.
These purchases have spread Facebook’s funds thin in the last quarter, causing the social media site to rethink its overall business model. “Numbers from ads are down…quite a bit from 4th quarter predictions. This coupled with the loss in popularity of 3rd party apps…it was inevitable.” said Zuckerberg from an online interview from his Menlo Park, California office.
This comes as a shock to many users, since the company is estimated to be worth 28.7 Billion dollars. This is from reports dated from March 2014. Zuckerberg said, “…not to fret. You will still keep your free Facebook account for now. We don’t plan on charging users until late June 2014.”
The proposed fees will be nominal in nature. They believe this Netflix-based model would prove to be more profitable. The Facebook Board of Directors proposed a subscription fee of $6.99 per month for regular users, and a fee of $29.99 per month for business-based users. The business user’s fee would also cover their regular account fees.
Regular users could buy yearly subscriptions for only $69.00 per year. Business users would pay only $299.00 for their services. “We want everyone to feel comfortable with these new fees…”, said Zuckerberg
Facebook would also offer various payment options ranging from PayPal to Credit Card options. “In the end,” stated a tired-looking Zuckerberg, “you have to answer to your share-holders.” How users react is going to be the next big question…especially when they find out this post is an April Fool’s joke.