June 15th, 2012

Will Facebook Friend Preteens?

By Jordan Robertson
Bloomberg News

When Mary Kay Hoal started a social networking website for kids in 2007, the mother of five wanted to create a wholesome service her young family could enjoy. She quickly realized that catering to children on the Internet requires paying a steep toll. Hoal says she burned through hundreds of thousands of dollars just so her site, Yoursphere.com, could comply with the Children’s Online Privacy Protection Act (COPPA), a 1998 law that sets strict rules for sites targeting preteens. Its main requirement: that sites get parental consent before collecting personal information about children or allowing them to open accounts.

Hoal, a Davis (Calif.) entrepreneur, tried working with a number of third parties—phone banks, credit-card companies, identity verification services—before settling on an e-mail notification to parents when their kids try to sign up. Parents must respond before the account becomes active. “It’s a headache for a website publisher,” she says.

The law that blew Hoal’s budget will take on new importance now that Facebook (FB), the world’s largest social network, is exploring whether to open its site to kids, according to Bloomberg News. Doing so could help the company tap a new population of potential members. Facebook needs the help: It already has reached almost 1 billion members, and a recent report by ComScore (SCOR) says the social network’s growth has slowed dramatically—a warning sign for some investors. Allowing preteens to create profiles would introduce a valuable new demographic for advertisers to reach.

Read more: http://www.businessweek.com/articles/2012-06-14/will-facebook-friend-preteens

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