Would you pay $1 a month for Facebook?
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Why? Because even if I paid $1/mo, many other people wouldn't. As such, Facebook's value goes down - without their contact information, postings, photos, etc. Facebook has no value. So, even if one is willing to pay for Facebook, by charging money Facebook would eliminate the reason why one would pay for it - namely that almost everyone is on it and creating lots of content you want on it.
That's part of the reason that it's so hard to monetize a site like Facebook - the value is being created by the users, not by you. You're just a venue. Should you want to change them for their own content, they'll just move to another venue. It's somewhat like trying to charge teenagers for loitering in your store. Sure, they're using your place as a venue and it costs money, but some definitely won't pay and as some start leaving, the crowd will follow even if a part of the group would be willing to pay for the venue.
But probably not many like me out there. Most people probably will pay.
Especially now that I've found some of the people I've lost contact with and have their email addresses
Companies can try and charge money, but as long as there's a line up of free sites willing to take their place, it's easier for most people to migrate to the next thing.
No.
Also, if enough people continued to use Facebook, it would be worth the $1/month to have access to the marketing opportunities that exist there.
GMail does messenging much better than Facebook and Friendfeed makes dealing with the stream of info much easier. Flickr lets you post better quality photos, etc.
let me add a monetization option for facebook here: why not adding revenue share with application providers? Block adsense, force their own ad engine, get 30%...
Viewing a friend's photos? Only half of each album is visible until you upgrade.
Viewing friends in common or friends-of-friends? Only half are visible until you upgrade.
Enjoying the news feed? Stories are embargoed from you for an hour or two until you upgrade. (You're included, but always late to the conversation.)
Etc., etc.
These would minimize the reasons to migrate elsewhere while making it really tempting to make an impulse yearly subscription. The biggest issue would be community backlash to having anything that was once free taken away, but I think that could be managed, too, via gradualism and education.
They could also offer other ways to 'buy out' the small fee, like agreeing to watch a short targeted promotional video and then giving your feedback.
There are profitable businesses charging for photo hosting, so if Facebook -- the largest photo hosting site -- needs revenue to cover expenses, it would be a logical thing to charge for.
Riffing further on your idea: you could get a discount if more of your friends are paid up, to emphasize the sharing-the-costs-among-all-who-benefit theme. If you're the only person in your clique who upgrades, you pay full price; if everyone does, everyone pays less. This could ignite viral peer pressure for paying up.
Nonpaying people only see half the photos of other nonpayers, but all the photos of other payers. This would be a little like the "at least one user has to be paid for an introduction" policy I've seen on dating sites.
I don't think there is a good reason for Facebook to ignore traditional web advertising. Sure, they have the potential to do more interesting and lucrative things in the future. But, I think shunning banners now is being a little too stubborn.
I don't think that any of the new features Facebook has added over the last few years have added real value to my experience or the experience of most of the people I know. The profile, wall and photos make Facebook. I think that has always been enough. None of the other nonsense will get you laid anyway.