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Comment by jacquesm | Hacker News Reader

You are missing one very important point. If facebook were to do that there would be a free alternative with traction within 24 hours and the 195 million that go away will pull the remaining 5 million with them. Facebooks sole raison d'etre is the fact that they have a userbase that has a high probability of including some people that you know.

See 'metcalfe's law' about the value of telecommunications networks.

It's very easy to destroy a community that was built on 'free' by starting to charge for it.

It is always easy to solve other peoples/businesses issues in five minutes, in practice things are seldom as simple as they appear to an outsider.

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I doubt that very much. There is a point of diminishing returns, I agree. If the charge were $1, less people would leave than if the charge was $100. But, the value of facebook or other social networking sites is in the social aspect.

For pay services have competed favourably with free services. Ringtones are one example where people opined that paid services would fail because free options would emerge. And yet, people still pay and download ringtones.

The catch to making people pay the $1 or $5 is to make it easy. If you require them to pull up a credit card or some such, you will lose people. If there was a simple way to pay such that the money came out of some account (PayPal or some such) then you'll get the $1 in a heartbeat.

The only way that I know of - also known as the freemium concept - to convert a large userbase of free users to a paying userbase is to provide a lot of new features under a premium banner that you only get access to when you pay.

Over time the weight of the new features starts to be larger than the 'simple' free version. The free version is the hook that you use to get people to use the service and to stave off encroachment by competitors.

If a free competitor should arrive on the scene that offers part of your premium features for free then you can choose to selectively offer those features to all your users (not just your paid users) but here you have to be careful not to erode your paying userbase because it is possible that people are paying for just that one feature and they'll possibly cancel their subscription.

This is not as trivial as it sounds.

For the record, I manage a website that has an active userbase of about 100K people a small percentage of those are paying users.

Facebook and Twitter (and their like) have yet to turn a profit or even come up with a plan to make one. Meanwhile, Blizzard's World of Warcraft continues to rack up millions a month from loyal and paying users. If you want to make money on the internet you need to take a good long look at what Blizzard is doing.

There are more ways to skin a cat. By your account the owners of icq never made money either. Until they were bought out that is...

Not every strategy is based on making money operating a service, some people aim for the big exit and are well willing to operate under a loss as long as they hold on to the service. It's a risky strategy, if your timing is off then you usually fail big time. But if the timing is right and you can find a partner that perceives an upside to having access to your users you just might score the jackpot.

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