Facebook unveils a new advertising option for its partners that allows companies to pull user’s statuses for use in ads without prior approval. Called Sponsored Stories, the new scheme businesses to take a user’s status for commercial purposes automatically when the user follows the business. The business would then be able to send the profile and new ad to that user’s friends.
Users would not be able to opt-out of being used in these ads. Facebook said that check-ins to business and places are lost in our ever-moving news feeds, and companies have no way of taking advantage of the marketing potential these statuses could have. Thus, Sponsored Stories would essentially turn any status mentioning a brand into a potential ad.
Advertising is becoming a crucial part of Facebook’s overall business: in 2010 the company took in about $1.8 billion in revenues, according to research firm eMarketer. This is expected to rise to over $4 billion this year.
This latest effort to monetize user data comes on the heels of Facebook’s big financial cash-out. The social networking site has finalized a $1.5 billion dollar financial deal under the auspices of Goldman Sachs, leaving the site with a monetary value that is projected to be at least $50 billion.
The Goldman Sachs financial firm and Digital Sky Technologies invested a total of $500 million. Foreign investors who are clients of Goldman Sachs were responsible for the other $1 billion dollars in this joint funding venture.
The total amount was half a million dollars over the amount that Facebook had publicly announced it wanted to raise at this time. With more than a half billion users, Facebook must be hard pressed to come up with any number of ways to turn user activity into a payday for their investors and a boost to the company’s bottom line.