Facebook Takes Some Hits on Advertising

I shouldn’t be surprised. When a company is growing by leaps and bounds there are bound to be detractors. Facebook has recently taken some hits in both the IT and financial press.

The Times Online, London, had this to say in an article about Facebook’s push for revenue via advertising:

Facebook plans to escalate its use of personal data to target advertisements to individual users, despite mounting privacy concerns surrounding social networking sites.

The Facebook site is considered a potential goldmine for advertisers because of the amount of data that it gathers, ranging from favourite music tracks to details of life events such as birthdays and engagements. Its success in reaping revenues, however, is thought to have been limited – a key concern for a group that has suggested that it could float for as much as $10 billion within two years.

The site, which began three years ago, claims 40 million active users. “We are adding 200,000 more every day,” Mr Van Natta said. It declined to detail its financial performance, but analysts have suggested that Facebook will post a $30 million (£15 million) profit this year on revenues of $150 million – levels considered poor, given its online reach.

And InformationWeek is clearly very unhappy about the way Facebook is going about its new advertising effort:

If there was any doubt about Facebook’s lack of qualification to displace the Internet with a benevolent dictatorship/walled garden, it was removed when Facebook unveiled its new advertising campaign. Now, Facebook will allow its advertisers use the profile pictures of Facebook users to advertise their products, without permission or compensation. Even if you’re the kind of person who likes the sound of a benevolent dictatorship this clearly isn’t one.

I can’t say as I blame them. Privacy is a big issue online, especially when it involves a site that attracts so many youngsters. You can be sure I’m going to investigate “opt out” settings as my young teen has an account there.

Leave a Reply