Why Facebook will be a HUGE business…

Late last year one of my predictions for 2009 was that Facebook would go public, sparking a mini-rally in the markets. Yet a lot of what I read about in the press lately is all about the company’s struggles – having trouble raising money at the valuation they want, having trouble hiring the workers they want, having trouble generating significant ad revenue.

To which I say, bullshit.

Seriously, you’d think the company was on the brink of failure, as opposed to being within 12-18 months, tops, of scoring the biggest Internet IPO since Google (And hell, I like my job just fine, but if you want to toss me a bunch of those pre-IPO options, Mr. Zuckerberg, I’m ready to chat)

I could go into all sorts of detailed analysis why I remain a committed bull on Facebook’s prospects, but all I need to do is show off a very simple demonstration.

Here are the sidebar ads I recently received on Facebook:

Damn, Facebook. Are you reading my diary, or what? The next thing you know they’ll be sending me an ad for McDonald’s Filet-o-Fish!

Now my assumption is the wedding ads are due to my recently updated ‘engaged’ status, and as for the hair restoration one, maybe it’s just the thirtysomething-year-old male demo.

But however they’re doing it, there’s no question Facebook has a friggin’ treasure trove of data on what their users like, what they need, what they do, who they hang out with etc. etc., and marketers should be able to use that information to their advantage.

People in the online marketing space have for years been talking about using the power of the Internet to effectively target specific users with relevant ads, but while there’s been some progress made on that front (search advertising is, after all, the holy grail of targeted advertising), no one company has been able to assemble the kind of information on its users like Facebook has.

The only real question is how much Facebook can get away with using. Personally, I think it’s great being served up relevant ads and as long as they don’t pass on personally identifiable information, I’m fine with it, but I know a lot of others find it all creepy and scream about invasion of piracy whenever Facebook tries to do something innovative with their data to make some money

But the privacy worrywarts should at least be comforted by the fact they certainly don’t always get it right. I pressed refresh and this was one of the ads that came up:

Not very relevant, unless, of course, Facebook has somehow figured out how to see into the future!! Perhaps they’ve scanned all my data and decided through some sort of complex scientific/actuarial data mining analysis that I’m a ripe target for breast cancer (men can get it you know!) Is it time for a mammogram????

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May 2009
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