As Facebook’s social and financial currency slips post-IPO debacle, the company is wasting no time in making its next headline-grabbing move, technology for children younger than 13 years old to use the social-networking site under parental supervision.
The move would open a cornucopia of new revenue streams and a Pandora’s box of privacy concerns by adding an entire new cohort to its 900 million users worldwide. Facebook's current policy bans children younger than 13, but 2011 research from Consumer Reports found 7.5 million people younger than 13 use the site, including more than five million under the age of 10. Microsoft's researchers also found that nearly one-third of 11-year-olds and more than half of 12-year-olds use Facebook with their parents' knowledge.
Among the options being tested is connecting children's accounts to their parents' for supervision of ‘friending’ and apps, and targeting the fast-growing game market for teens and tweens. Nearly 12% of Facebook's $3.7 billion in 2011 revenue came from games like Zynga’s Farmville.
"The under-13 features could enable Facebook and its partners to charge parents for games and other entertainment accessed by their children,” according to the Wall Street Journal.
James Steyer, CEO of Common Sense Media, told CNN that Facebook's move towards kids concerns him as much as "Big Tobacco," adding: "With the growing concerns and pressure around Facebook's business model, the company appears to be doing whatever it takes to identify new revenue streams and short-term corporate profits to impress spooked shareholders.”
"But here's the most important issue," he added. "There is absolutely no proof of any meaningful social or educational value of Facebook for children under 13. Indeed, there are very legitimate concerns about privacy as well as the impact on the social, emotional and cognitive development of children. What Facebook is proposing is similar to the strategies used by Big Tobacco in appealing to young people — try to hook kids early, build your brand, and you have a customer for life. What's next? Facebook for toddlers?"
Still pending is FTC review of Facebook in light of the Children's Online Privacy Protection Act of 1998, regulating personal data websites can collect from kids. “Some of its $650,000 in first-quarter lobbying spending concerned the Coppa review,” reports WSJ, reiterating CEO Mark Zuckerberg’s comment last year regarding access to children 13 and younger, "That will be a fight we take on at some point."
Larry Magid commented in Forbes, "Whether we like it or not, millions of children are using Facebook, and since there doesn't seem to be a universally effective way to get them off the service, the best and safest strategy would be to provide younger children with a safe, secure and private experience that allows them to interact with verified friends and family members without having to lie about their age.” Magid adds that a Facebook for kids should not include ads and needs "extra privacy protections" that would involve parents.
Facebook will certainly have to step lightly when it comes to advertising and younger users — a thorny issue with its official 13+ user base. According to a recent Reuters and Ipsos survey, four out of five Facebook users have never bought a product or service as a result of advertising or comments on the social network, and 34% of respondents said they are spending less time on Facebook than six months ago, while only 20% were spending more time.
The survey underscores the fact that despite Facebook’s $3.7 billion in revenue last year, primarily from ads on its website, sales growth is slowing, due in large part to the growth of smartphones with limited mobile advertising options.
"It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people," commented eMarketer analyst Debra Williamson.