Because they've determined they can make more money by not doing that

Because in practice a negligible fraction of people is willing to pay even a nominal fee for something they think they can get for free. Just a few days ago we had an article full of outrage that Google asked people to pay a small fee once their extremely generous Gmail storage filled up, because they were used to thinking email was free.

I did a back of the paper calculation as to how much fb would earn via me as a user. I noticed a user like me spends about 15 mins a day on facebook and see around 6 sponsored posts. Internally FB ads are all CPM based, at about $4-5 per CPM, no matter the optimization advertisers choose. In a year he would have seen about 2000 impressions, and hence minimum price would be around $10 per year. (There are many users who spends a lot more time and hence the revenue multiple will be higher)

But there is more revenue than just that. FB allows advertisers to reach specific audiences, and even create lookalikes, so overall, there will be a %age of the users seeing more ads than me, potentially personalized for them, and average revenue per user would be higher.

I think your numbers are pretty far off if you look at Facebook financial statements, and a more accurate cost would be around $200/yr for a daily user [1]. US & Canada had 189 million daily users and a quarterly Ad revenue of 8.487 Billion dollars. That is $45 per user per quarter.

[1] https://s21.q4cdn.com/399680738/files/doc_financials/2019/q3...

You might be right. I was replying to the parent comment which said facebook should have a ad free subscription product at $2-3 per year. Just tried to say that the Revenue per user is more than that.

Also, the numbers you posted include all the inventory - facebook news feed, ads on the side right on desktop, instagram, messenger ads, stories ads, instant articles, and even the ad network. According to facebook (read somewhere) 70% of their ads are on the ad network.

The people who would pay it are the exact same people who are worth the most to advertise to.

This is why you can’t pay to get a version of The NY Times that has no ads.

And yet I can pay to not see ads on Youtube and Twitch. Is there something different about video vs written content?

I don't know about twitch, but YouTube hemorrhages money and couldn't exist independently of Alphabet.

Facebook makes more than $5 per user but the average is brought down by lower revenue in Asia/Pacific. For users in US/Canada the revenue per user is over $20.

https://www.cnbc.com/2017/11/02/facebooks-revenue-topped-5-p...

Their average revenue per active user faaaaar exceeds $2-3/yr in the US at least.

Because they make more money from ads than they could charge users to remove ads

Now that's just rude and uncalled for. Why not write a few lines and explain why you think he's wrong?

Because price stickiness is real, and the stickiness at free is very very strong. Being a service whose appeal derives entirely from the network effect, they will never ever give their users an exogenous push to leave the platform.