Why Facebook is a BIG Danger to Small Business

It was once so easy to run a website and earn a good living through monetization. How things have changed since Facebook grew!

Dangerous FacebookIf you are like me, someone who builds websites and tries so hard to make a living from ads revenue so you can concentrate on the site content rather than dealing with customers, you probably notice that your ads revenue has dwarfed to what it once used to be.

Many years ago, I had it great! I had a social network that was growing well. At the time, Mark Zuckerberg was probably learning how to read and write. I had a growing network of amazing people from all over the world, connecting, chatting and sharing. It was, however, removed from Google search for “link spam”, something I never did and to this day continue to fight Google for compensation for loss of earnings and taking away the chance for me to grow and compete.

At the peak, before the removal, I was making plenty of money through ads revenue, totally automated. I did, however, work literally 3 or 4 years building sites without much sleep. Work, an hour or 2 sleep followed by work. I worked on many different projects, at the time Google were operating from a garage and was probably just a logo! I had the idea of a homepage with news, weather, web search and chat. I just didn´t have the knowledge to put it together.

As I was working on a classifieds website, my friend told me that there were quite a lot of people on my chat site. That chat site became a social network well before Facebook, Twitter, Google+ or LinkedIN and it was great fun. It grew and grew, lots of people met from all over the world. Marriages, babies born, I also met my wife on the site and we have an amazing 5 year old son. It was all from something that I started as a simple chat room well before the big monopolies took over.

As the site grew and as Google grew, ads revenue increased. I was making a really good living from the site. I travelled the world, I had great times, I was also very generous to many people with the money I earned. I never did anything to put my hard work at risk, I certainly didn´t spam the site and it certainly didn´t warrant the removal from Google search. It happened and hopefully one day Google will pay back what they took away from me. Put it this way, I should and I think I would be competing with Facebook or at least have something to show for my hard work today. Maybe Facebook would not have survived or maybe would not be the beast it is today if it wasn´t for my website removal from Google.

Anyway, this post isn´t about Google, it is about how Facebook is screwing it up for businesses that rely on advertising revenue. Small, medium and even large businesses can no longer survive on ads revenue from third party advertising like they once did. Online newspapers are starting to ask for donations to survive or allowing you to read a small section of a news article before charging you to signup to read the rest. Those newspapers once survived with the likes of Adsense, however, since Facebook began their internal ads system, ads revenue has fallen greatly for every single business that uses third party advertising.

Why? Well its simple. Facebook have over a billion users daily. Every business has a Facebook page. Every business wants to reach a certain audience so rather than target websites, they can just promote their page by paying for Facebook advertising, hitting almost the entire population of the world in a targeted niche through Facebook advertising. Its more simple, its guaranteed to target the right audience. Facebook knows your name, what you like, what you eat, where you holiday, they know everything about you and they use this to target ads that are far more relevant to you personally. You are more likely to click an ad on Facebook over an ad on a website. Websites you visit mostly don´t have all the information Facebook has about you. So in the end, advertising on Facebook brings a much higher conversion rate for the advertiser.

Now the problem with Facebook and why it is a big danger to small business is because Facebook do not offer monetization. Unlike Google, Facebook take 100% of the ads revenue they generate. This is a huge problem for the startup, small business and eventually will effect the big business that operate outside of Facebook. We are almost forced to pay Facebook or fail but to pay Facebook we need a product to sell. The days when you could write amazing content or offer a free service and rely on advertising revenue from third party advertisers to survive are almost gone.

Online newspapers will need to charge you to read the news or ask for donations. It is happening already as you can see from the screenshot below from the Guardian newspaper.

Online Newspapers ask for donations

Blog writers can no longer monetize their content like they once used to. Webmasters who create content and free services can no longer support their projects without donations or charging. It is effecting every single niche outside of Facebook and that is not good news for the end user, small business, content based website or free service websites.

So, unless Facebook starts to offer monetization, it will continue to be a danger to almost every internet user and business. The problem is, Facebook don´t need to offer monetization to anyone. Why should they? Its a really good business model, unfortunately its just too big and in my opinion, unless they begin monetization, far too greedy.

I deleted my Facebook account months ago. I was one of those small websites that paid for advertising. It was too costly so I stopped paying. The day I stopped paying Facebook was the day they threatened to terminate my account for “spam”. I was posting my services and websites in classifieds groups. I don´t bow down to monopolies, rather than pay them, I would sooner find other work or live in hope that one day the internet will become a fair playing field for all, as it was at the beginning.

Thank you for reading. If you enjoyed this post or find my website useful in anyway, please, if you can afford to, support me, I am just another one of those struggling website builders with a lot going against me right now. Please take your time and read my page here.

Thank you,

Simon.