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May 14, 2012

Facebook charges users to promote their posts

The social networking site is testing a new feature in which users can pay to have their posts promoted.

By Tineka Smith

Facebook trial

Facebook’s latest attempt to increase revenue is a feature which will highlight important posts in order for them to be more visible on the site.

Facebook is considering charging $2 for posts that users want to be highlighted. The new feature has so far only been tested in New Zealand.

"We’re constantly testing new features across the site, Facebook Spokesperson Mia Garlick told Stuff NZ. "This particular test is simply to gauge people’s interest in this method of sharing with their friends," she said.

Facebook said it was using a variety of prices in the trial, even offering the feature for free to some users.

News of the feature comes after Facebook warned investors last week that profits from PC advertising are slipping as mobiles are becoming increasingly used to access Facebook.

Facebook has seen recent growth in revenue lately but its net profits have slowed.

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"Growth in use of Facebook through our mobile products, where our ability to monetise is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results," said Facebook in a regulatory filing.

The company believes mobile devices have positively contributed to the number of daily active users on the site. However, the company has failed to keep up with mobile advertising.

Over half of Facebook’s 900 million users log in using mobile applications. The company is missing out on potential revenue since Facebook’s mobile applications have no advertising; thus creating no revenue for the company.

Facebook’s weak position in the mobile area has the CEO explaining to investors why he purchased Instagram, a mobile photo app with no revenues, for a whopping $1bn.

Facebook aims to raise $5bn and is set to go public on the stockmarket with an initial valuation of $96bn on May 18.

Please follow this author on Twitter @Tineka_S or comment below.

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