Facebook Beckons to Businesses, Which Beckon to Users

Nearly four years after launching, Facebook moved into its second stage of life on Nov. 6 with Facebook Ads, an online ad platform that lets businesses reach users in the company's social network of 52 million users.

Facebook, located in Palo Alto, Calif., has achieved what Google, Yahoo, Microsoft, AOL and others in the online advertising would love to achieve: finding new and creative ways of targeting advertising for social network users.

That new stage is powerful because now Facebook users can not only share information about Web sites and businesses with their friends but invite friends to weigh in on shopping and other activities on the Web. Yes, Facebook has become a sort of online mall, where users can shop with the input of their friends.

The service that enables this is Beacon. Beacon is an API (application programming interface) in Facebook Pages, which allow businesses to have a presence on its social network. Some 44 Web brands or retailers are using Beacons to display the activities of their fans on their pages and on those user's Facebook feeds.

Read more here about Facebook's new ad platform.

Web sites participating in Beacon can allow users to sell an item, buy an item or view video. When users who are logged into Facebook visit a site in the Ads network, they receive a prompt asking whether to they want to share those activities with their friends on Facebook. Friends may view those actions through the Facebook News Feed or Mini-Feed stories.

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Online auctioneer eBay, for example, plans next year to use Beacon to let sellers include their eBay listings in their Facebook News Feeds. This will allow them to share information about the items they are selling with their network of friends.

Facebook is able to tread further down the e-commerce rabbit hole because its developer platform was expanded to Facebook pages, allowing businesses and organizations on Facebook to add applications onto their pages and enable users to interact with them.

On Nov. 7, Blockbuster launched MovieClique, an application that allows Facebook users to create lists of movies they want to see, or movies they've already seen, along with ratings and reviews, to share with their friends.

Click here to read more about Facebook and Microsoft ganging up on Google.

Peer review is always nice but MovieClique also lets subscribers of Blockbuster's online rental service rent movies directly from Blockbuster without leaving the Facebook site.

Think about that value proposition: Facebook lets users review and rate movies and share this information with friends, who may rent videos from the same place. Advertising and reputation are driving e-commerce.

This could lead more advertisers to create Facebook widgets that drive activity around their products to drive ad inventory.

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