Facebook services to remain free

Well, the privately-held Facebook “has been profitable for a long time,” the company’s chief operating officer Sheryl Sandberg said in an interview recently with ‘The Sunday Telegraph’. And the site will focus on being an “ad-based business,” she said – not on fees for functions.

“You are right that a lot of the products we provide for businesses are free – we love that,” she said. “And we think that if those free products work – and they do – then people will advertise against that and spend money against them to promote them.”

She added: “We want the world to use Facebook and I think the best way we get revenue is when people put up the page and it is all free and then they advertise to show people where the pages are. You’ve got to show people you’ve arrived. If I’m a business I can advertise to the whole world or to the people in Liverpool. We offer at both ends of that spectrum.”

Sandberg said that the site was the “best platform” for brands to build awareness – challenging even television, she claimed. The site’s unique strength is in users’ interaction with the ads – and in its ability to promote and hit the fast-forward button on viral marketing.

“Facebook is genuine two-way,” Sandberg said. “When you put an ad on Facebook, users can interact with it and, more importantly, they do it publicly. If I watch a TV commercial and I like it I might tell my husband sitting next to me and that’s it. If I see an ad on Facebook and I like it, I give it a ‘thumbs up’ and my average 130 friends see I like it and it spreads.”

She said however that Facebook planned to be careful that advertising didn’t intrude on users’ experience and turn them off. “We are very conscious that this is people’s space and that’s why our ads look and feel the same as the rest of the site,” she said. There will be no big pop-up ads – the only ads that we will feature will interact with users like everything else on the site.

“So, when Alice In Wonderland opened and bought an ad saying ‘come see it’, people could RSVP just as if the invitation had come from a friend,” she said.

“We’ve been profitable for a long time, we’re cash-flow positive ahead of our forecasts and we’re doing very, very well out of that model,” Sandberg said.

“The more people that use Facebook, the more inventory we have for adverts and the more useful it is for advertisers. The key question is: when we see our usage go up, do we see our revenue go up? And the answer is ‘yes’ in really compelling ways.”

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