that Facebook is a social networking superpower is old news, but Facebook has
stepped out of that narrow category and dipped into several other business
pursuits such as advertising, and it has succeeded in that as well. In
fact, the social giant surprised quite a few traditional advertising groups at
an annual industry get-together in Cannes, France recently.
Facebook, which launched in 2004, has grown by leaps and bounds in recent
years. The site has over 750 million active monthly users at present, and the
number of features offered constantly increases to keep the site relevant with
consumers' changing needs/wants.
Online advertising has certainly changed
the industry. Large corporations like Ford and Nestle to small companies are
realizing that their advertisements have a better presence online, and
especially on social networking sites because of data mining.
Sites like Facebook use data mining to collect information about the people
using their services. For instance, when a Facebook user posts a link or an
article, Facebook takes note of that and uses that information to send them ads
that would interest them. This has worked quite well for Facebook, considering
the social networking company just raked in $2 billion in online display
advertising revenues this year.
While this form of advertising may be working well for Facebook's pocket, it's
not working out so well for its users. Data mining has landed Facebook on some
dangerous ground as regulators claim that increasingly sophisticated data
mining systems are a breach of user privacy. In fact, the
European Union just required sites that collect user information to notify the
user that they are doing so.
But that hasn't stopped the rapid growth of social networking ads that use
sophisticated data mining techniques such as RadiumOne, which tracks people's
social behavior by partnering with blogs and social networks. Companies are
willing to pay top dollar for such targeted ads, and this may be why other tech
giants like Google are hopping on the social networking bandwagon. Only two
days ago, Google released a field trial of its new possible Facebook
"If I have a good experience with a brand I'll tell a person offline -- I
might tell my friend -- but if I do it on Facebook, the average person is
telling 130 people," said Facebook Chief Operating Officer Sheryl
Sandberg. "We think that explains the very healthy growth of our