If they charged, I might not get to be a user. :/ : (

So just keep that in mind in the case of some users. I have not read your post yet but perhaps you already realize what I have said. :) I hope you have at this point.

Facebook on the other hand is a place, a club if you will. There aren’t any services it provides that make it ‘cool’ enough to pay for it. Sure, everyone has it, but people don’t like to pay to explore or find out what COULD happen. They pay for guarantees they know WILL happen. I WILL get a date or I WILL get this product… not oh I’m paying to screw around and upload some photos.

Facebook has a platform which could sell many services. Think of the dating possibilities at college, it sets you up for a fee with others at your college who are looking. Not to mention non-romantic things like clubs or other groups and services.

There are also social sales opportunities, selling local or recruiting locally, all possible with Facebook (probably better served on LinkedIn though).

There are plenty of other opportunities, but if Facebook wants to start charging, they need to stop sitting at their computers all day programming algorythms and start doing real work to provide services people want. We pay for physical products or relationships developed through service. We do not pay for automated digital services which we perceive as inherently valueless or replaceable.

Also your iTunes analogy isn’t properly researched. The iTunes store does not make a lot of money in comparison to the iPod, which is the main drive of profits. Why do you think record companies have been jostling with Apple so much over prices lately. Also, the iTunes story didn’t convert many people, more steal or listen by alternative means then ever before… look at playlist.com, torrenting, or pandora (someone who has an effective freemium model).

People don’t pay for ideas, connections, relationships, entertainment, emotional content, or media… they pay for tangible guaranteed physical products and services. I argue this will never change, and combined with the internets ability to aggregate and distribute information quickly and cheaply, destroy more industries than it creates.

Everyone always says there are a bunch of replacements for Facebook, but it would take a whole lot of truly tectonic shifts for people, en masse, to migrate over to another platform. Not saying it couldn’t, but I don’t know that a $2 fee would cause that.

People went pretty quietly from getting music for free on Napster and P2P to paying $1 on iTunes, which is a bit of an apples to oranges, but certainly can be analogous. I think free Internet purists certainly reflect thinking inside the tech community, which, we often forget, is a lot different than the public in general. I doubt most people have a philosophical foundation for their decision on whether to pay for something, they just do or don’t – and most often don’t.

I am playing Devil’s Advocate a bit – I personally wouldn’t pay to use FB, but I’m not a big user – but I think there’s little merit in the “people will never pay for it” argument about online services. We inside the tech bubble have strong opinions about it, but I’m guessing the other 149.5 million people using FB don’t. They just might not pay for it if it isn’t worth it to them.

This is adding on top of the fact that you don’t seem to understand the business services Facebook provides. It charges for clients to advertise to select

Also, this hypothetical ignores the fundamental principle and product that Facebook was created to accomplish, connect people. The business model is attempting to monetize that by allowing companies access to their user base for free. Its not like Facebook is selling something that is so amazing it can’t be duplicated anywhere else, there are thousands of other carbon copies which are free as well. Charging for this process of connecting people destroys the basic way that Facebook attracts its user base. The difference between Free and $1 is huge. Even if a friend invites me, it goes from feeling social to feeling scam, a pyramid scheme where my friends are accosting me to spend money on a product.

If you simply say, oh ok, we’re going to charge money now, you’re ignoring the product, business model, existing user base and about everything else Facebook does. In fact, you are essentially creating a new company. Oh wait, its already been done before — classmates.com — and its hasn’t been able to get over $50m in revenue.

Freemium is the only way to go, because its similar to creating a store and selling a product. How many customers would you expect to come in if you charged a fee to enter? None. How would that translate into sales? It wouldn’t. Facebook needs to think of itself as a store which gets people in, then charges them once they find something they want.

I really think Facebook should find a way to monetize its information assets without taking any risk regarding privacy.

BI and entreprise level services could bring $$.