Facebook (FB) Stock Price Surge: Facebook For Kids Under 13 Could Boost Mobile Revenue


As of today, to be a Facebook member you must be (or at least pretend to be) 13 years old. But that’s about to change! 

The Wall Street Journal reports that the social network is working on a “secure access” version for kids under the age of 13.

The main idea would be to link children’s accounts to their parents.’ And with the help of some new tools, parents would be able to decide with whom their children can become "friends,"with as well as authorize the applications they use.  

While for parents to control or censor the online activities of their darlings may be enticing, for Facebook these “junior accounts” could, particularly, be good targets for advertising.

For most companies on the Internet, children don’t directly represent a great interest. Indeed, they don’t have "much money" and they are very difficult to exploit because of regulations protecting them, particularly with the Children Online Privacy Protection Act. However, they constitute the future consumers.

Millions of young people who have not yet reached 13, already have Facebook profiles and sometimes with the complicity of their parents. A recent study carried by the Minor Monitor Institute, showed that 38% of minors registered on Facebook are under 13 and 4% of them are not even 6 years old! 

Another study by Consumer Reports also revealed that 7.5 million children, under age 13, use the site, including 5 million under the age of 10 by simply lying about their age.

If adults are no longer naive enough to click on Facebook ads, younger people still are! And even if they can’t buy things by themselves they can still influence their parents. 

Of course, to ease parents' fears, Facebook won’t be running ads in the children's version. But this is pretty smart, because once they know the kid's profile, likes, dislikes etc., they can just relate them to their parents. And thus can directly display the ads on the parents’ account.

This possible Facebook “kids’ appropriation” will certainly capture parents’ attention. The social network and its partners could also exploit the commercial potential of these younger users, on the growing children's games market, which is currently largely dominated by Apple and Google. 

In fact, parents could be billed and charged for games and other entertainment accessible to their children.  

Under current U.S. law, Facebook cannot collect any data from children, except with their parents' consent. To most Facebook critics, including privacy advocates, the social network already has a compelling argument: children are already using it by lying about their age so for them this will be just formalizing their presence on the site, by establishing controls.

This security approach for little ones could be justified, if that was the only reason. But the other fact is, when children lie about their age to sneak up on Facebook they also damage the quality of data collected by the company. And by giving them a controlled access, Facebook could partly solve this problem.

Since its IPO, it is clear that Facebook’s situation is uncertain and even worrying. FB stock value has been slowly melting, losing about 29% of its initial price. 

Several arguments have been advanced to explain why, but they only scratch the surface of the problem. In any case the result is quite different: growing fears about the social network prospects, its ability to make money and the financial consequences of the totally failed IPO.

Facebook has been looking for new ways to generate revenue and monetize its audience. The stakes are high for the network as the sense that its advertising is ineffectivene and uselessness is increasing. 

Especially since General Motors, the third biggest advertiser in the U.S., announced it would cut its Facebook ads budget, judging the return on investment unsatisfactory. And a recent Ipsos/Reuters survey has revealed that Facebook ads don't have influence on users' purchases.

Such a plan could boost advertising and partly reassure investors’ about Facebook's ability to increase its audience and attract new advertisers on the mobile sector, which is very popular among younger people. 

However, as stated in the Wall Street Journal, it is not certain that the under 13 Facebook version will see the light. Indeed, Facebook always tests a lot of new services and developments without necessarily commercializing them.