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Originally published November 7, 2007 at 12:00 AM | Page modified November 7, 2007 at 2:02 AM


Facebook ads count on friends

Facebook has begun transforming itself from an online hangout into an online business district. Companies can now create their own pages...

The Associated Press

NEW YORK — Facebook has begun transforming itself from an online hangout into an online business district.

Companies can now create their own pages on Facebook for free, under a new program announced Tuesday. Advertisers also will be able to show users their pitches in the guise of friends' endorsements, based on what the friends buy and do online.

For example, if a friend has booked a vacation on Travelocity, the online travel agency will be able to display the friend's photo as part of an ad to entice the user to buy flights and hotel stays.

The friend will have some control over whether to share that information, but the user will have fewer choices over whether to receive it.

As Web companies look to boost advertising revenue by offering to target ads based on users' hobbies, interests and behavior, Facebook's move could change the tone of the site and revive privacy complaints it faced last year. Facebook will rely on information in users' profiles and on friends' online activity to determine what ads might appeal to users.

Key will be how Facebook tells users about the program, something it plans to do shortly.

"Some people may find it creepy," said Deborah Pierce, executive director of the San Francisco-based Privacy Activism. "They are trying to find some ways to monetize this and keep the lights on. If the disclosure is up front, yeah, I think this is a reasonable thing for them to do."

Facebook has long prided itself on guarding its users' privacy, but the walls have gradually lowered. A feature allowing users to track changes their friends make to profiles backfired when many users denounced it as stalking and threatened protests. Facebook quickly apologized and agreed to let users turn off the feature.

Advertisers can fine-tune their audiences — having their pitches appear only to women under 30 who attended New York University and work at Goldman Sachs, for instance.

Facebook promises no information that could identify an individual will be disclosed to advertisers. And its officials said users can complain again if they find the new targeting program offensive.

"If users are displeased with this, we will hear from them," said Chris Kelly, the company's chief privacy officer.

Privacy concerns aside, many Facebook members may be reluctant to endorse an advertiser for fear of alienating friends who had bad experiences with the same company, said Chris Winfield, who runs 10e20, an online marketing specialist.


"They are relying a lot on their users to make this happen, and that's going to be tricky," Winfield said.

Facebook Chief Executive Mark Zuckerberg, who co-founded the company three years ago, said marketers must respond to the changing nature of communication, driven in part by social-networking sites like his.

"Pushing your message out to people is no longer good enough," Zuckerberg told about 200 advertising-industry executives, many already in New York for the ad:tech conference. "You have to get your message out to the conversations."

Facebook's usage has grown rapidly since last year, when the site opened membership to all Internet users. ComScore Media Metrix says Facebook had 30.6 million U.S. users in September, compared with rival MySpace's 68.4 million.

Facebook's announcement follows by two weeks Facebook's deal to sell a 1.6 percent stake to Microsoft for $240 million, spurning a competing offer from online search leader Google and valuing the Facebook at $15 billion.

Copyright © 2007 The Seattle Times Company

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