At a time when privacy leaks and advertising are causing users to abandon Facebook its competition is growing stronger. Social networking site Ello, which promises no ads and never to sell user data, has just been majorly backed financially.

Ello says its network, which launched in August, is legally bound to its word that there will never be advertising nor will it share user data. It will do this by introducing micro-payments for additional features – a bit like mobile games do. Investors have pledged a hefty $5.5 million which is about £3.4 million.

Ello founder Paul Budnitz says: "While Ello has grown incredibly fast, we still have 14 staff. We're adding a few more people to help handle growth - but because we're not selling ads or mining data, there's a whole load of people we don't need to hire."

While fremium business models have worked for things like Spotify and Angry Birds, often resulting in people paying, some argue this won't work for social networking. James McQuivey, an analyst at tech research company Forrester, told the BBC, "You don't invite your friend to connect with you if it costs your friend money. Even in the world of digital music, you can pay for services but most people don't."

As with all things online it's hard to know what will happen but with Facebook losing users and other sites gaining them its exciting times for the future of fremium.

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