Facebook - near future

For the last few months, I have become very interested in the topic of online advertising. This has been the main topic in most of my previous blogs. But why???
I always thought that online ads were misplaced and that no users or businesses would actually be interested in them. Its still true that people do not want to be disturbed by online ads, but what if they are tailor made and targeted specifically for the user.
From the user's point of view, I have always been targeted by irrelevant ads and now when I see an online ad, I just ignore it. This has just become a habit. But if online ads were always tailor made to my interests and were specifically targeted at me, maybe I wouldn't have ignored them as irrelevant. This is the point that Google, Facebook or Foursquare want to leverage to generate huge profits in the future.

I had previously discussed how Foursquare and Google wish to generate income from online advertising. Now lets see how Facebook is doing the same. The arena of online advertising does not yet have any big players. We are in a phase, where most companies are still experimenting on how to improve their online advertising. Once we cross the experimenting stage, some players could have exponential growth as in any other market. This gives players like Facebook, a big chance to become the market leaders thereby making huge profits. Why does Facebook have a big chance???

"Facebook has more than 400 million active users where 50% of the active users log on to Facebook in any given day. People spend over 500 billion minutes per month on Facebook. Also, there are more than 100 million active users currently accessing Facebook through their mobile devices. " Source: Facebook statistics. Facebook not only has access to this huge database, but also knows about the activities, interests, passions, hobbies, demographic and geographic details of many of its users. This will allow facebook to target its users with customized online ads. As of today, one can run an online ad on facebook by targetting their customers by location, age, likes and interests, education and also connections.

In fact, it is very interesting to look at the following success story.
"Over 12 months, CM Photographics generated nearly $40,000 in revenue directly from a $600 advertising investment on Facebook. Of the Facebook users who were directed to CM Photographics' website from the ads, 60% became qualified leads and actively expressed interest in more information." Source: Facebook case studies

This success story reveals that more and more companies will become interested in online advertising through Facebook. There was a time when I said, "Today, online advertising is a joke". But maybe, in a few years, it would become meaningful with more companies concentrating on targeted online advertising. In my opinion, in the next two or three years, Facebook will concentrate more and more on increasing its market share in online advertising.

One of the other important concern for many users of Facebook is privacy. Most of my friends have spoken a lot about this issue. But yet, I would like to share some facts that reflect the concerns of many from the Latin American countries.
"Facebook's privacy settings, combined with the sheer volume of personal information individuals put on their profiles, have also led to claims that Facebook could encourage cyberstalking. One particular aspect of cyberstalking that is of concern to insurance companies is the use of Facebook as a research tool for burglars. A report published in 2009 by Legal and General called "The Digital Criminal" revealed that 38% of social network users post status updates with details of their holiday plans, which can be an "open invitation to burglars" as many users also posted their home address on their profile. In August 2009, a burglar in Hove accessed his victim's Facebook profile to taunt her over the theft of her laptop by posting comments on her profile. A spokesperson for Sussex Police said: "Being burgled is traumatic enough for any family but for the culprit to apparently use their stolen possessions to publicly gloat over the crime is a sinister twist."" Source: Criticism

This incident is one of the many issues faced by Facebook. Look here for more info. If Facebook wants to increase or retain its users, it is important for them to work on these relevant criticisms they are facing. So, in my opinion, Facebook will concentrate in the next two or three years, on working around its privacy issues to increase its user database.