Facebook Takes First Step Toward Full-Fledged Ad Network - Page 2
In recognition of this fact, Facebook has been reaching out to the wider Internet community in order to extend its reach beyond its own walls. For years, the Facebook “Like” button has littered the web to encourage more sharing of products and information among its users. More recently, Facebook launched its own commenting system, which has been adopted by many popular websites across the Internet.
This process has been part of a strategy that Mark Zuckerberg calls the Open Graph, which allows Facebook to easily integrate itself with other websites; these websites gain access to Facebook's many users and applications, and Facebook gets to expand its network across an increasingly interconnected mesh of relationships.
With its first foray into external advertising with Zynga, Facebook is continuing this desire to engage with its users outside of the Facebook platform. At the same time, Facebook is able to fire yet another salvo at a company that has quickly become one of its main competitors in recent years: Google.
Although Facebook is beginning with just a very limited rollout of its new advertising program, it is not hard to imagine a much wider network that could become a serious threat to AdSense, a similar program from Google that contributes significantly to its own bottom line. Many blogs and other news sites use AdSense as a way to earn advertising revenue from its visitors, from which Google takes a percentage as compensation for managing the logistics of the system.
AdSense has become very popular among website owners, but given the dominance of Google in the online advertising industry, these affiliates have not had much choice in the matter. If Facebook could expand its nascent advertising network to a wider audience, it could greatly increase its revenue potential by offering a viable alternative to AdSense.
It would not be easy for Facebook to dislodge Google's first-mover advantage, but Zuckerberg's company does have some distinct advantages that would allow it to successfully compete with the world's premier search engine. Specifically, Facebook has a plethora of personalized data on its users that Google could only dream of obtaining for itself; this gives Facebook a greater ability to directly target its advertising to users, which should enable them to increase the conversion rates of advertising campaigns.Continued on the next page