The rumours of charging for using Facebook have been circling for some time, but is there any truth to them? Is Facebook in need of more money, is it running at a loss as it is suggested of Youtube? The crux of the matter is that (nearly) every website wants to make money and, as Ben suggests, since we live in a Capitalist society, this is only to be expected. So, what is the next step for Facebook, are we going to end up paying to use it? And what will we get when we do?

In his kindly titled article “Hitting Ben is FREE” Scott, with an eloquence I cannot hope to match, completely misses the point. If you haven't yet read it I suggest you do so now(http://www.moneywhatmoney.co.uk/index.php/Scotts-Articles/Hitting-BEN-is-FREE.html ). He starts off with two good points, firstly that a tax on windows is a silly idea – couldn't agree more – secondly that if Facebook started charging their users, there is a very high chance everybody would simply stop using it and find somewhere else to waste time.

Whilst the story about William the Orange was entertaining, it is hard to see how it bears any relevance to the problem of revenues from social networks. William the Orange imposed a tax on windows purely to get some “money for nothing,” people having windows or looking out of them cost him nothing and so the tax had no real basis, economic or otherwise. Websites are a a little different.

William of Orange, or William III, was King of England between 1672 and 1702. He didn’t really do anything remarkable, except think of ways to make money because he was a bit skint after knocking seven bells out of the French. His most famous way of making money was the ‘Window Tax’, the bigger and more windows you had the more you got taxed. The idea was to tax the use of freely available things like air, water and in this case sunlight.

As far as getting something for free go sunlight is right up there with wind and rain. People got a bit fed up of paying for actual windows, so they just left holes in the wall or had a brick lattice instead. Now back in 1690 when the tax was introduced central heating didn’t as such exist and the winters were probably colder etc etc, so people jus got cold and wet instead of paying.

SO what on earth would possess my compadre Ben to think that by making people pay for facebook that they would still use it?

Most things which seem to be free are actually funded by advertising, along side the service we want there will be adverts and the payment for those covers the cost of us getting the product without ourselves paying. The advertisers in turn believe that the sales they will get from the adverts will be sufficient to make a profit on their payment for the advert in the first place. Great in principle and something Google have successfully built an empire on.

Facebook claim to have a similar model, they provide the service entirely for free (the end users don't have to pay anything) and then display adverts along side the content. Similar to Google, but with one crucial difference; when was the last time you clicked on an advert on Facebook? I thought about this for a while and concluded never, I have Facebook open for a fair part of the day, every day and yet not once have I clicked on an advert.

I was woken up this morning by a text from Nik. Firstly, a big thank you to Nik for doing it by text, last time it was by hitting a gong (nobody knows where he got it from) four inches from my ear. The text was about the new plan, announced on the 11th of May by the government, to fit "smart metres" in every home in britain by 2020 at a total cost of £7 billion (original article: http://news.bbc.co.uk/1/hi/business/8042716.stm). 

On the surface this seems like good news, whilst Qonnectis main focus has been on their water metering product, they also provide smart metering systems for gas and electricity (http://www.qonnectis.com/Solutions/Energy-Utility/Default.aspx) and so could be a part of this. 

In my last article, written in response to the pirate bay verdict, I suggested that the traditional business models of the music and film industries had passed their best and that if such firms wanted to survive, they would have to come up with something new and better. It's easy to look at their models from outside and point out that they have failed, it's much harder to come up with suggestions for what they should do to fix them.