Facebook application to ‘sponsor’ companies

Facebook’s News Feed home page could have been described as a personalized CNN without the commercials — until last Tuesday, when the popular social network launched SocialAds, which now has ads, too.

SocialAds — the latest brainchild of Harvard dropout Mark Zuckerberg and his Silicon Valley-based Facebook — allows companies to develop profiles that feature information on their products. Facebook users then have the option of adding companies to a “my products” application feature on their profile, prompting News Feed to display a message about those users’ endorsement to his or her friends.

Most students interviewed said they think the advertising changes blur the differences between Facebook and other social networking sites and said they are unlikely to be influenced by the ads.

Social Ads provide advertisements alongside related actions friends have taken on the company’s site, Product Manager for Facebook Ads Leah Pearlman said in a blog on the Facebook Web site. The actions may be things like “Leah is now a fan of The Offspring” or “Justin wrote a review for Sushi Hut.” She said each of these actions could then be paired with an ad provided by the endorsed company.

Companies are even allowed to embed “Beacon coding” in their profiles, according to the Web site. The coding records actions, such as purchases, that Facebook users make on a company’s Web site and publishes them on the users’ and their friends’ News Feeds without explicit consent.

But Facebook is now facing questions concerning the legality of attaching personal information — name, portrait, picture — to advertising without written consent. Critics and legal experts also said they are concerned about how much access companies will have to other information featured on users profiles.

According to Facebook, though, the companies will not even have access to the profiles of their supporters.

Many Yale students interviewed said they were not necessarily concerned with the privacy and legal issues of the new advertising platform.

Indeed, many students said they were unaware of the addition of SocialAds and did not plan to spend time locating companies that they would like to sponsor. Some said they heard rumors of other students’ canceling their accounts, but no one interviewed felt compelled to do so.

Robert Klipper ’11, one of the 22,876 members of the Yale Facebook network, said he finds the addition of SocialAds a very interesting and gutsy business move.

“In the business sphere, Facebook’s move is being watched very closely,” he said. “If it succeeds, it will be a big step in turning potential into profit.”

Blockbuster, Toyota Prius and Coca-Cola are among the 100,000 companies currently participating in SocialAds, according to Facebook’s Web site. With the gradual corporate creep into Facebook, analogies with MySpace are inevitable, many students interviewed said.

Michael Boyce ’11 said he thinks Facebook is compromising the appearance of sophistication that previously set it apart from MySpace.

“Rupert Murdoch took MySpace away from its original point by turning user profiles into advertisements that happened to have your photo next to them,” Boyce said. “One of the great appeals of Facebook was the lack of advertising and the relatively clean look of the interface.”

But Jakob Dorof ’11 said Facebook’s method of advertisement has some advantages over that of MySpace, although the advantages may be decreasing. On Facebook, users must click “yes” before endorsing a company, although the site does not prevent advertisers from putting information in everyone’s News Feed, he said.

At a time when Zuckerberg has said Facebook — recently valued at around $15 billion by national analysts — is looking to generate new revenue while remaining an independent company, technology and business critics have questioned the efficacy of mainstreaming its advertising platform to fall more in line with competitors.

One of the differences between Facebook and other sites is that Facebook SocialAds allow users to receive product endorsements from their “trusted” friends rather than from the company itself, Zuckerberg said in a press conference last Tuesday.

But Klipper said Zuckerberg may not have accounted for the anonymity of Facebook friendships when he was coming up with the business model for SocialAds. He said the advertising system — built on the assumption that people are more easily influenced to buy products by their friends than by anonymous advertisers — might not be as effective as planned.

“On a practical level, Facebook claims that it’s going to be effective because your friends are the ones recommending things,” he said. “But Facebook friends are people who you sometimes never speak to, so if a random girl from high school recommends a movie, I won’t be moved to buy it.”

Many students interviewed said if they dislike using Facebook in its new form, they may look elsewhere for other social-networking services.

“Facebook is running a risk here by selling itself out so much — it may be making itself vulnerable to new competition,” Dorof said.

Last month, Facebook sold a share of ownership worth $240 million to Microsoft.

Comments

  • Anonymous

    Did you notice that Twitter is now on Facebook, too? It integrates pretty seamlessly. I have to say, that’s not what I expected, given that Twitter would seem to be a competitor with Facebook’s own status update feature. Guess that’s not how they see it.

    http://www.facebookster.com

  • nickgsa

    Hey Samuel Breidbart,

    Yeah! I Strongly Agree With None, Twitter Is Also Now Facebook Competitor. I Think In Few Years Tweet Rocks..

    Thanks,
    Facebook Apps Development.