Facebook has come out with plans for advertising based revenue and is now trying to woo its customers.
Facebook is giving users some control over whether to share information on their buying habits and other online activities with friends. For the program announced Tuesday to work, enough users must actually say “yes” so advertisers can show users their pitches in the guise of friends’ endorsements.
Facebook’s announcement follows by two weeks Facebook Inc.’s deal to sell a 1.6 percent stake to Microsoft Corp. for $240 million (€165 million), valuing Facebook at $15 billion (€10.3 billion). Microsoft also broadened a marketing relationship that began last year. The ad program announced Tuesday was unrelated to either deal with Microsoft.
Companies can now create their own pages on Facebook for free and tailor their pitches to the activities of users’ friends.
For example, if a friend has booked a vacation on Travelocity, the online travel agency will be able to display the friend’s photo as part of a “social ad” to entice the user to buy flights and hotel stays. Advertisers can similarly have their pitches appear when friends review restaurants and buy books or DVDs.
Companies can even embed coding Facebook calls “Beacon” on outside sites such as eBay Inc., enabling a Facebook user who lists an item for auction, for example, to generate alert messages for Facebook friends, who may then check out the item.
“People influence people,” said Facebook Chief Executive Mark Zuckerberg, who founded the company three years ago. “Nothing influences a person more than a recommendation from a trusted friend.”
As Web companies look to boost advertising revenue by offering to target ads based on users’ hobbies, interests and behavior, Facebook’s move could change the tone of the site and revive privacy complaints it faced last year. Facebook will rely on information in users’ profiles and on friends’ online activity to determine what ads might appeal to users.
Search companies like Google Inc. have generated a lot of revenue from text-based ads targeted to a user’s search terms. Those have been good at fulfilling demand – users often are already looking for a car or a travel package when searching and seeing those ads.
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Via: Facebook Blog
