Facebook to Crash the Online Advertising Party

CEO Mark Zuckerberg parries dogged questions about online advertising.

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SAN FRANCISCO—Web 2.0 Summit co-host John Battelle peppered Facebook CEO Mark Zuckerberg with tough questions about the future of the social networking site, getting the Harvard dropout to admit the company will announce plans to make money through online advertising within the next three months.

When Battelle asked if and how Facebook would colonize its platform to position it for growth, Zuckerberg said, "We might do something in ads."

Asked to elaborate on that, Zuckerberg firmly said no, adding that in the next few months "there will be a lot more on that."

Harping on the online ad point, Battelle later inquired about the health of Facebooks relationship with Microsoft, which serves display ads for Facebook.


Click here to read more about Microsoft and the MySpace generation.

"I think were both happy," said Zuckerberg, dressed in a T-shirt, sweatshirt, jeans and sandals. When asked if he was sure, Zuckerberg said, "Pretty sure," drawing a pause from Battelle and laughter from the audience, which was packed into the ballroom at the Palace Hotel here.

Undeterred, Battelle asked if Zuckerberg was interested in going outside the Facebook domain, extending online ads to the rest of the Web the way Google does with AdSense and AdWords. Zuckerberg was evasive, saying that the company is just getting started and that the world would have to wait three months to see what it is working on in this area.

Battelle later polled the audience, finding that 20 to 30 percent in attendance are involved with developing applications on Facebook.

Zuckerberg said the idea of opening up a development platform to tether social connections came before Facebooks consumer-facing tool and noted that the platform is just at the tip of the iceberg in terms of how far it can go.


Facebook opens its development platform. Click here to read more.

"It might take 30 years before this is a really mature platform," Zuckerberg said.

Battelle then challenged Zuckerberg for the companys developers terms, which allow Facebook to pull the plug on the application at will.

Zuckerberg was somewhat evasive on that point, noting that the company does not intend to go around yanking peoples applications.

Battelle than asked the CEO if he would be willing to state that Facebook would not take action against a business that became successful on top of the Facebook platform, to which Zuckerberg said it wouldnt be good for the company if it challenged the businesses it enables.

Zuckerberg also added that Facebook reserves the right to build anything and compete with any application created from its platform, but said the company will do it on fair grounds.

"People know that theyre on notice," Battelle broke in. "You start an ad network on Facebook, Google, be careful because Facebooks coming after you."

On the corporate development front, Zuckerberg said he is more concerned about grooming quality talent, which means expanding the current staff of 300 to 700 in a year and facilitating the growth of its network.

Battelle pounced, asking Zuckerberg to define the "social graph," a term that Google CEO Eric Schmidt and others with interests in social networking have bandied about in recent months.

Noting that there is quite a bit of misperception about how Facebook thinks about the social graph, Zuckerberg said it is the set of connections—including business connections, friendships and acquaintances—that everyone has in the world.

"All that were trying to do at Facebook is take the social graph that exists in the world and map it out," Zuckerberg said.

"Once we have an accurate model of the social graph, then what we can do is expose those connections in a way that our users are comfortable with," he said. Then Facebook will let users link "to a set of applications, and those applications can use the connections to help people use information more effectively," Zuckerberg said.


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