Monday, April 18, 2011

Facebook makes money from user's data

Social networking site Facebook is using its users's profile, status updates, messages and other information to help advertisers find exactly who they want to reach out to.

Facebook is now tracking this activity, shooting online ads to users based on their demographics, interests, even what they say to friends on the site sometimes within minutes of them typing a key word or phrase.

For example, women who have changed their relationship status to "engaged" on their Facebook profiles will receive ads from local wedding planners and caterers when they log in.

Middle-aged men who list motorcycling as one of their hobbies could get pitches from Victory Motorcycles.

According to the Los Angeles Times, some analysis believe that Facebook's unique trove of consumer behavior could transform it into one of the most powerful marketing tools ever invented.

However, privacy watchdogs say Facebook's unique ability to mine data and sell advertising based on what its members voluntarily share amounts to electronic eavesdropping on personal updates, posts and messages that many users intended to share only with friends.

Facebook's first experiment with paid ads was a flop. In 2007 it rolled out Beacon, which broadcast information on Facebook about users' activities and purchases elsewhere on the Web without their permission.

Facebook pulled the program after settling a lawsuit brought on behalf of Facebook users.

This time around, company officials appear to be proceeding more cautiously. David Fischer, Facebook's vice president of advertising and global operations, says Facebook delivers ads that are relevant to users' lives.

"This is an opportunity for brands to connect with you. When someone likes a brand, they are building a two-way conversation, creating an ongoing relationship," said Fischer.

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