META Meta Platforms Inc

By Georgia Wells 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 11, 2018).

While parrying questions from lawmakers over Facebook Inc.'s commitment to user privacy, Chief Executive Mark Zuckerberg dropped several hints about how the social network may change in an era of tougher scrutiny.

During one notable moment early in his Senate testimony, Mr. Zuckerberg seemed to leave open the possibility the social network could introduce a paid version of its service following the latest furor over Facebook's handling of users' personal information.

Mr. Zuckerberg was pressed by Sen. Orrin Hatch (R., Utah) over whether the service will always rely on targeted advertising using personal data. The Facebook co-founder replied that "there will always be a version of Facebook that is free."

Hours later, in response to Sen. Ron Johnson (R., Wis.) Mr. Zuckerberg said Facebook would "certainly consider ideas like that" in reference to a paid service.

By not rejecting the possibility of a paid product, Mr. Zuckerberg's comment could be interpreted as endorsing the idea that Facebook might experiment with a version of its social network that relies on subscription revenue instead of advertising. Facebook didn't have an immediate comment.

Mr. Zuckerberg has long insisted that Facebook will always be free and supported by advertising, as a way to make it available to people of all incomes, so any suggestion of adding a paid option would be a marked change.

Mr. Zuckerberg said that in general people prefer to not pay for services, so he said he believes that the free, advertising-supported version "is going to be the best one."

Facebook makes nearly all of its revenue from advertising, relying less over the years on payments from developers using the company's platform. More than 98% of last year's total of $40.7 billion came from advertising.

A premium service could appeal to people who don't want to see ads in their news feeds and possibly allow them to better control their personal information.

Subscription models are common among web companies offering content, but Facebook, Twitter Inc., Snap Inc. and other popular social networks have long shied away from premium accounts. Professional-networking site LinkedIn, owned by Microsoft Corp., does offer several paid plans with more features.

The notion of a Facebook paid service cropped up last week after the company's chief operating officer, Sheryl Sandberg, said in an NBC News interview that allowing users to opt-out of all data collection wasn't consistent with a free service. "We don't have an opt-out at the highest level," she said. "That would be a paid product."

Some viewers took that as a signal that Facebook was considering some sort of paid service.

Sen. Richard Blumenthal (D., Conn.) asked if Facebook would agree to an opt-in feature when it comes to their data, rather than an opt-out program. "It makes sense to discuss" an opt-in feature for data sharing, Mr. Zuckerberg replied.

Some of the senators' questions revolved around Facebook's ability to detect hate speech on the platform. Mr. Zuckerberg said this is "one of the hardest" problems to solve because of the nuance of human language, but he believes artificial intelligence will be able to stamp out the verbal abuse on Facebook in five to 10 years.

Write to Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

April 11, 2018 02:47 ET (06:47 GMT)

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