Facebook Inc. is on the radar this week for introducing “Sponsored Stories” for its 1 billion users, where those who have a “very important” post that want to ensure the post reaches the news feeds of every friend, would pay a nominal fee for the posting. The more friends a user has, the more it would pay to guarantee the post makes every friend’s feed. This has been tested in 20 other countries and just rolled out in the U.S. in the past few days, designed to be a new source of revenue for the company.
Analyst Larry Barrett wrote, “Facebook’s pay-to-display scheme probably will find some takers — depending on the price — among the child-photo-sharing and Spring-Break-updating crowd. But then again, chances are most of the people who would actually consider paying to barnstorm their friends’ news feeds probably are long on time but short on the expendable cash required to sustain an extended self-promotion campaign.”
“On the surface, LinkedIn’s new feature smacks of a snoozefest waiting to happen and probably not particularly engrossing to the majority of its users who are either too busy working or looking for work to nestle in for Richard Branson’s musings on whatever,” A skeptical Barrett wrote.
Facebook Inc. investors – like billionaire fund manager George Soros of Soros Fund Management – will certainly be looking for new ways for the company to make money, while those who invest in LinkedIn Inc. – like billionaire Israel Englander of Catapult Capital Management – might appreciate at least an attempt at increasing value of subscriptions.
