Internet economics

So Facebook got a lot of criticism for their latest privacy changes and having privacy controls that are too ‘granular’, or whatever …

I guess there are two groups of Facebook users, those who don’t care about privacy so much, and those who are confused and fed up with all the changes. The first group is probably bigger, but still there must be a reasonable number of disgruntled users.

The basic problem is that Facebook has quite large costs (can you imagine how many servers are needed for 500m users?) and it has to cover these somehow, so it keeps coming up with fancy-pants advertising schemes, all of which leverage users’ data to some extent, and so come the privacy concerns and the outrage and the angst, etc.

Instead, why don’t they just charge a frigging fee. I’d happily pay $10 a year or so for a Facebook-like service with only two privacy settings: PRIVATE, where only my friends can see my stuff, and PUBLIC, where everyone can see my stuff.

Sure they might not get 500m users and they couldn’t monetise their social graph (whatever that means), but even 5m x $10 = $50m, not a tiny sum of money.

Younghee Jung on physical vs digital identity:

Socially and systematically our digital birth is not acknowledged. It only becomes valid when our physical and proven existence is linked to it. Will this change? Will we – digitally or physically – be freed from our permanent residence when so many of us are no longer in a position to claim a permanent residence?

Still small potatoes compared to offline retail sales, but growing fast.

In 2009, China’s e-commerce market totaled 263 billion RMB (approximately $38.5 billion) with growth equivalent to about 105% increase year-on-year

Also alibaba.com is one of the few really successful B2B e-commerce sites that I know of.

A combination of advertising & subscriptions:

There will be two ‘pillars’ to Twitter’s business model, Chief Operating Officer Dick Costolo said at the company’s Chirp developer conference in San Francisco. The first, announced earlier this week, is Promoted Tweets, which lets advertisers pay for sponsored tweets that appear at the top of search results for certain keywords.

The second pillar is commercial accounts, which Twitter started to talk about last year. That service will allow a business to pay for a Twitter account in return for detailed analytics tools and the ability for several people to post to the same account.

Just noticed a new feature on Facebook today:

It’s well known that Facebook has always had ambitions to compete with Google in search. Facebook’s big advantage is its data about your friends, which it can use to customise search results for you. For certain types of queries, this could be quite effective.

However, this new feature of FB seems limited to asking public questions and receiving answers from random FB members. I think it could be a lot more useful.