The primary aim of a social networking site should be to satisfy of its members. Members do not control such sites; their wants are often slow to be fulfilled or unpopular features introduced.

Facebook fails to have a network for my urban area. If I want to join a geographic network, I have to join that of an urban area, Newcastle, approximately 40 miles away. A Facebook group with nearly 10,000 members exists that lobbies for my area to be made a network exists, but has it been done? No.

Other websites, like MySpace, fail to keep in touch with their users’ needs too. MySpace suffers from featuritis, having introduced pointless services like ‘MySpace Karaoke’ and allowing customisation to such an extent that makes the site inaccessible and inefficient.

Members need a big say in how social networking are operated.

Simply stating that if a site fails to meet the needs of its users, that they will stop using that site, is not a satisfactory solution. These sites are primarily a community comprising smaller communities (social networks), and if users leave for other sites, these communities are torn apart and social networking becomes even more time-consuming, as users must use several sites.

The solution? Co-operation: ‘an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise’.

If members owned the service they use, they could use their democratic voice to get features they want and to ensure that a positive user experience is maintained.

The securing of initial capital obviously proves a problem. However, if each member had to pay an amount – whether £1, £2 or £10 – for a share (and say in the site’s future), this could raise it. This might work especially well for niche social networks, as people willing to contribute to the site’s initial capital could be quickly identified and targeted. Niche networks have been known to rapidly grow. For example, Facebook was originally for students at Harvard and within one month, over half of that university’s undergraduate population had joined^{(see this article)}.

Paying for the upkeep of the site could be a problem too, but member-owners would be able to choose which revenue model they preferred. If the members were willing to pay to subscribe, they could democratically indicate their desire to do so. If members would rather face advertisements, they could democratically choose to do that. At the moment, if social networking sites were to make this decision, it would be somewhat experimental as they could not truly know what their members desired. Consequently, some sites use intrusive adverts, whilst others charge for membership in situations where it is inappropriate.

Of course, some social networking sites are already semi-democratic. Facebook had a ‘Site Governance Vote’ in April 2009, but this was only about changes to the terms of service (something I suspect most members aren’t faintly interested about). This vote was effectively useless. For it to be binding, it needed a 30% turnout. It achieved roughly 3%. Privacy International described it as a ‘massive confidence trick’. In a way, it was important topic on which to vote, but members should be able to vote on issues important to them, not just topics on which the company wants them to vote.

Social networking sites are communities, not just companies. A community should be democratically-controlled in order to ensure its needs are best met and that it can grow in a sustainable and responsible fashion, rather than a fashion in which the main aim is generating higher profits.

Three years ago, I remember people were still frequently discussing micropayments. Micropayments are, as you may gather, very small payments which are too small to even justify costs such as credit card processing.

Several companies have tried to implement micropayments as a system for online paid content, as opposed to subscription-driven methods, but most of these ulimately fail.

In 1998, Jakob Nielsen predicted that micropayments were they way forward, as opposed to advertising or subscriptions, in his essay ‘The Case for Micropayments‘ but he obviously made a misjudgment and the advent of broadband internet saw many of his arguments (such as removing the need for advertising would speed websites up significantally, which would actually save businesses money) become significantally weeker.

In 2002, he came to the realisation that ‘we are not going to get true micropayments’ but we may get ’services that rely on user payments’ with bigger payments. His latter prediction was partially right, as the likes of online music sites successfully utilise payments of up to about £1 fairly successfully, but £1 is much bigger than what a micropayment is.

Nearly three years after Jakob’s essay, a wiser chap called Clay Shirky published ‘The Case Against Micropayments’ which stated that ‘the short answer for why micropayments fail’ was ‘users hate them’ as it leads to anxiety and hesitation. Shirky was right, as they didn’t take off and still have not taken off.

Micropayments are not economical to administer. If each page online cost 1 cent to view, how much of that cent would be spent on administration? Like any payment system, you require staff, hardware, a processing system and perhaps most important time and effort. Would a small site’s webmaster be willing to put the system into place, making his website slower as it would have to call an external site, if he were to only earn about $0.0025 per page? I think not.

Another point: do users or businesses want to pay? I wouldn’t. I can easily read 5 small web pages a minute, and I would hate to be paying 5 cents a minute or $3 an hour. I think relevant advertising is the best form of monetisation as it gives users a choice whilst still giving them access, is economic for webmasters and advertisers, and it can help the user.

Micropayments don’t work and in my opinion nor does any paid content. 99% of the time, there’s a free alternative to any paid content. I hate it, though, when I can’t get access to some content – and sometimes paying isn’t even an option – such as journals hosted on JSTOR.

Please people, stop using the dollar. I’m not an economist so I’m sure my arguments flawed… rebuttals appreciated!

It’s a weakening currency and it is fairly frustrating receiving AdSense and TLA payments which are growing smaller and smaller even if the actual amount is rising. For example, in October last year a pound was about $1.87… now it’s more like $2.08! Quite a difference! Whilst changes in exchange rate are very normal, I think in today’s world of global trade it is especially inconvenient.

We Britons are a stubborn people being one of the few European nations to opt out of the €. Many Europeans moaned that the switch to the Euro saw prices rise but I think our prices are already inflated well above their American equivalent (a copy of The Sims 2 for Mac will only set you back $45 (at today’s exchange rate about GB£21) on Amazon.com but will cost you GB£30 (about US$62) on Amazon.co.uk). It’s interesting how the weakening dollar doesn’t lower British prices!

I’m tired of advertisers using dollars to pay. I’m happy that several of the advertisers I do business with directly pay me in dollars or Euros. I think Euros is a more sensible choice for websites to do business in as nearly half a billion people use the Euro or a currency pegged to it!

Would it hurt companies such as Google or TLA to offer advertisers and publishers the option to use currencies besides the dollar? Obviously, they would have to do some conversions (for example if the advertiser paid in US$ but the publisher wanted GB£) but if an advertiser paid in sterling, could the publisher not be paid in sterling?

Tags: economics, dollar, euro, pound