San Francisco Chronicle

Facebook reportedly looking at subscripti­on version

- By Sarah Frier

Facebook has been conducting market research in recent weeks to determine whether an ad-free version paid for with subscripti­ons would spur more people to join the social network, according to people familiar with the matter.

The company has studied such an option in the past, but now there’s more internal momentum to pursue it in light of Facebook’s recent privacy data scandal, the people said. The plans aren’t solid and may not go forward, according to the people, who asked not to be identified because the discussion­s are private.

Facebook declined to comment on the possibilit­y of the subscripti­on service. CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg spent much of Facebook’s first-quarter earnings call touting the benefits of the ad-supported network, which, they said, allows the company to reach the most people, at every income level. But it’s not the only way to run the business.

“We certainly thought about lots of other forms of monetizati­on including subscripti­ons, and we’ll always continue to consider everything,” Sandberg said then.

During his congressio­nal testimony last month, Zuckerberg left the door open for a subscripti­on option. “There will always be a version of Facebook that is free,’’ he said.

Zuckerberg has long considered such an alternativ­e — not to replace the Menlo Park company’s business model, but to remove a common rea-

son people give for leaving the service. The company generated virtually all its $41 billion in revenue last year by selling ads targeted with user data. Company research in past years concluded consumers wouldn’t be receptive to a subscripti­on option, seeing it as Facebook being greedy and asking for money for something it said would always be free, the people said.

Now Facebook thinks consumer sentiment may be changing. The company is facing a crisis of public trust after a developer gave personal informatio­n on millions of Facebook users to Cambridge Analytica, a political consulting firm that worked on Donald Trump’s 2016 presidenti­al campaign. News of the leak spurred questions about the informatio­n Facebook collects on people for ads, and whether users are tracked and targeted in ways they don’t expect or understand.

Facebook has been conducting a broad review of its business to identify ways to close potential security holes and, more broadly, regain the trust of users and improve their experience. The company has been receptive to changes that even a year ago would have been unthinkabl­e, such as ranking news publishers by trustworth­iness and allowing up-voting and down-voting on comments.

Executives also have been facing difficult questions from employees, like whether Facebook should be offering political advertisin­g at all. Sandberg said in an interview last month that the social network should continue to accept political ads to promote free expression.

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