One of the board members at social network Facebook likes to walk around town saying that the company is worth $10 billion. Industry experts believe that the company will make $30 million this year on $150 million in revenue. Most of that money will come from an ad sales deal with Microsoft (MSFT).
Now, based on a reports in The Wall Street Journal, Facebook is getting too clever for its own good. It is building a system to target ads to its members based on the personal data that they put at the site. It makes privacy concerns about the data Google (GOOG) uses to target text ads pale in comparison.
The paper says that Facebook will be able to target marketing "based not only on age, gender and location, but also on details such as favorite activities and preferred music." That should make its members a but uncomfortable and drive them right over to rivals like MySpace.
Social network users seem to believe that they have a bond with their chosen network. They come to the site and share details about their lives with their friends, associates, and co-workers. They do not expect their host to exploit the data for money. That is a naive approach, almost child-like, but it still may make potential new users of Facebook think twice about joining.
Douglas A. McIntyre