Last week Facebook Inc. (NASDAQ: FB) announced some changes to its policies on how the social network will use all the data it collects about its 1 billion users. In general, Facebook plans to share the information it collects at its own site with other Facebook-owned companies like Instagram.
The plan is similar to a plan announced last January by Google Inc. (NASDAQ: GOOG) that would combine data collected at its various sites — Gmail, YouTube, Google+ — into a single profile that Google would use to serve advertising, and not just on its websites, but through its AdSense and AdMob advertising networks.
Ultimately, that’s probably what Facebook has in mind as well. A captive pool of 1 billion user profiles with Likes and contacts and all is nothing short of an advertiser’s dream. Provided Facebook doesn’t run into the same privacy issues that it and Google and others have bumped into before, a Facebook ad network would be a big plus for the company’s revenue stream.
And this is probably what’s pushing analysts to raise their ratings on Facebook and lifting target prices. The impact on Facebook’s shares are nice too — up another 8% today at $25.89 in a post-IPO range of $17.55 to $45.00.