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Facebook to set up official external advertising network

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MUMBAI: Social networking website Facebook is planning to start an external advertising agency that will be able to capitalise on the data collected by it over the years about people‘s preferences and habits on the web. This also means that advertisers will now be able to use information about users in order to target ads at specific groups while they surf the net.

The data that Facebook has about users includes things like their likes, posts made on the site and the friends one makes on the social networking site.

The initiative will open a new source of revenue for Facebook. Increasing revenue is an important thing for the publicly traded company since it has not been able to do any wonders since it launched its IPO.

The model would be similar to Google‘s AdSense, something that has proven popular and effective and could give the social media website a chance to compete with Google‘s advertising.

Earlier an executive from Facebook‘s counsel office was quoted in Forbes as having said that "everything you do and say on Facebook can be used to serve you ads. Our policy says that we can advertise services to you off of Facebook based on data we have on Facebook."

Recently, WPP CEO said in an interview with LiveMint, "Facebook is a social medium and a branding medium rather than an advertising medium. It is dangerous to invade people‘s social space. A conversation on Facebook is inherently a social conversation and not a commercial conversation. So the means of engagement are far more subtle. If I engage you to write something nice about me or WPP on your Facebook page, that would be better than taking a display ad on Facebook. I have said this historically-that Facebook is a powerful branding medium."

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