Privacy is an Illusion

I found this interesting little piece of information in the New York Times late last week about the fact that Facebook's new ad platform could violate out of date state privacy laws. New York State statute states that "any person whose name, portrait, picture, or voice is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained" can sue for damages.

This is interesting considering Facebook is planning on launching Social Ads by having friends recommend products and services to one another. Of course, they could get around all of this by simply adjusting their terms of service.

Thoughts on SocialAds

Facebook announced yesterday that it will start a new stealthy art of advertising called SocialAds. The point of the platform will allow its 50 million members to become the new advocates for high profile brands such as Verizon, Blockbuster, and other mainstream brands.

The new platform allows these companies to do the following:

- Build profiles around their brand - nothing new here, this has been going on for a few years at MySpace, and was even in beta testing mode at Facebook with its Sponsored groups function.

- Insights will allow advertisers a more in-depth look at how their consumers and target markets behave online. Because Facebook collects such a comprehensive amount of data when a user registers for its site, this information will be extremely valuable to advertisers, more-so than on other social networking sites, where a buying a banner ad would be a shot in the dark. Advertisers will now be able to target not only to traditional demographics, but will be able to go as far as to where a user graduated from, what Facebook applications they are using and who their friends are. All of this, of course, will no doubt raise privacy concerns from industry watchdog groups.

- Beacon is the most interesting part of the platform because it allows users to tell their friends when they visit and purchase on a partners website. Imagine for a moment that you just bought Gucci Sunglasses off of eBay. That transaction will now show up in your news feed on Facebook. Taking this a step further, let's assume that you and your friends are planning a quick trip to Cabo for Spring Break and you want to let them know where you received a great deal. If the airline you purchased your tickets from is a partner of Facebook, that purchase will show up in your news feed.

What Facebook is doing has the potential to revolutionize the industry. If done correctly, they could do for social networking what Google did when they launched AdWords. This new platform is bound to have a dramatic effect not only in online advertising, but advertising across all spectrums.

Facebook Fun

Just in case you've been living in a cave for the past couple of weeks, the big story that everyone is talking about is Microsoft's recent investment into hot social networking start-up, Facebook. First and foremost this has many implications to both Microsoft and Facebook. Microsoft is in essence mortgaging its future placing a big bet on the fact that FB is going to be the next big thing. Facebook, on the other hand, is hoping that Microsoft can show them the ropes on how to become a successful media company (if you think FB is anything but a media company, you're sorely mistaken).

What was interesting over the last couple of weeks is the fact that there were several players who were all trying to buy Microsoft's piece of the pie. Google was perhaps the biggest and most relevant among them and surprisingly lost. Why they lost has yet to unfold. Although in the end it may be pretty smart of FB to have said no to Google, Google sure would have had a lot more to offer them as far as experience and online advertising brainshare.

What's certain now is the gloves are off between the two companies. Today, Google announced that they have established a partnership with several companies to set-up a social networking platform that will be common across the board. While this probably won't make FB co-founder Mark Zuckerberg forget that he's a new billionaire (on paper), it will surely make things more interesting in the weeks and months to come.