How Facebook Will Profit Even More From Your Profile

Facebook is only free in name. While the company most definitely does not sell your information, Facebook “makes its money from showing you ads,” as a webpage from Facebook explains. So what, you might say: Ads are everywhere, flashing and pop-upping from websites across the internet, on the sidelines of your Gmail account, on the floor of your supermarket.

What’s different is that the ads you are shown on Facebook are tailored to you based on your personal information and on whatever pages, events, etc. you have “liked” on Facebook. Rather than you having to scan the pages of the weekly circulars — those advertising inserts tucked into paper newspapers that many of us never look at anymore — the ads about things you’re likely to be interested in are seamlessly delivered to you.

An “exclusive” guest post on BetaBeat says that new features on Facebook mean that the company, whose spring 2012 IPO is getting closer and closer, will generate even more profits from your profile. The author of the post is an anonymous contributor described as a “former CTO who now does tech consulting for other start-up ventures and was briefed on Facebook’s advertising strategy”; he says that Facebook’s much ballyhooed new Timeline profile was designed not so much with a view to enhance your social media experience, as to enhance advertisers’ brand messaging.

Starting in January, Facebook will also integrate another type of ad, “sponsored stories” — posts and activities that businesses have paid Facebook to feature – into your Timeline. They will look like updates from friends as a friend’s profile photo will be displayed besides content they have “liked.” Facebook has described Timeline as a great innovation that makes it possible to present your entire history back to the day you were born; all Facebook profiles will be converted to the new format by the end of this year.

But, according to the BetaBeat post, what Timeline is really doing is disguising ads as updates from your friends. From BetaBeat:..... more
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