From the submitted article: "Indeed, Facebook hit a legal roadblock in May, when it reached a tentative settlement in a class-action lawsuit over the use of sponsored stories, one of its most effective advertising tools. In the would-be settlement, the company promised to inform users explicitly that their 'likes' could be used as endorsements for a brand or page, and that they could opt out. By one estimate, it could cost Facebook $103 million in revenue." Yeah, that's the problem Facebook has, that many approaches to leveraging user data to maximize advertising impact may be illegal, off-putting to Facebook users, or both.
I have been running AdBlock for a long time on Chrome, and either F. B. Purity or Social Fixer on top of Facebook, and I notice that just since about the time of the Facebook IPO that Facebook advertisements are again showing up as I view my own profile on Facebook. Most but not all of these show up as "sponsored stories." I never like any of the ads. I don't like the "social" ads that mention my friends by name and face (surely without those friends really meaning to suggest to me that I buy the things advertised). I don't like any of the other ads either, and mostly find them completely irrelevant to my interests. I have a friend who used to take elaborate steps to hide keywords in his wall posts (for example, he would use non-ASCII characters to respell words referring to politics or religion), but whether a person does a little or a lot to confuse Facebook, Facebook seems just plain clueless about what kind of ads to serve up, and increasingly clueless about how to provide a satisfactory user experience in general.
Prediction: Facebook will go the way of AOL, still being a factor in the industry years from now, but also serving as an example of a company that could never monetize up to the level of the hype surrounding it.
I bet your prediction is wrong. I've expanded on it elsewhere, but fb is sitting on a couple enormous businesses.
1 - they can launch the first serious adsense ($10B/year pre tac) competitor because they see most people move about the internet on fb connect;
2 - the ad exchange (fbx) is brilliant: you can bring your 3rd party data in and run ads on fb properties. This allows everyone to reuse their retargeting / behavioral targeting data and target in a guaranteed brand safe environment. But no data leaves: fb is a data sink.
3 - adding to the above, they have real demographics for brand advertisers, so they can diversify from the dr people.
4 - adding to #2, they're even better positioned for 2nd screen. Tons of people want to connect desktop/laptop display with mobile, but fb doesn't have to do any guessing or prediction: fb knows all the data because of the shared login. Thus they'll monetize mobile better not just because they know dems, but because they can extend online 3rd party data to mobile via fbx. If nothing else, buckets of dirt cheap impressions for your targeting/bt lists.
edit:
5 - how could I forget gambling? Zynga moves into real money gambling / poker (some relevant court cases have apparently been recently decided) and fb continues to collect a 20-30% tax.
I have been running AdBlock for a long time on Chrome, and either F. B. Purity or Social Fixer on top of Facebook, and I notice that just since about the time of the Facebook IPO that Facebook advertisements are again showing up as I view my own profile on Facebook. Most but not all of these show up as "sponsored stories." I never like any of the ads. I don't like the "social" ads that mention my friends by name and face (surely without those friends really meaning to suggest to me that I buy the things advertised). I don't like any of the other ads either, and mostly find them completely irrelevant to my interests. I have a friend who used to take elaborate steps to hide keywords in his wall posts (for example, he would use non-ASCII characters to respell words referring to politics or religion), but whether a person does a little or a lot to confuse Facebook, Facebook seems just plain clueless about what kind of ads to serve up, and increasingly clueless about how to provide a satisfactory user experience in general.
Prediction: Facebook will go the way of AOL, still being a factor in the industry years from now, but also serving as an example of a company that could never monetize up to the level of the hype surrounding it.