Facebook to Include Ads in News Feeds

Social networking site Facebook is readying a major new ad platform for launch next month. The feature will allow advertisers to embed ads in the recently launched RSS-style news feeds that now serve as members' home pages.

With the new platform, Facebook will allow advertisers to embed ads in the news feeds--which themselves were introduced last month. One banner ad will be inserted in each news feed, which appears as a column of news items arranged chronologically on each user's home page.

Clicking on the ad units, called "sponsored stories," will take users to the sponsor's Web page or to a Facebook group created by that sponsor. Many major brands already maintain Facebook groups, which bring together fans of the newest Mac iBook or Cingular phone.

The banner ad initially will be displayed high in the page, at around the third spot in the stack of news items, and then move down as the feed is populated with new items. "If you have a social group with a lot of activity, a lot of news to report, the ads will move down faster," said Melanie Deitch, Facebook's director of marketing. When an ad has been pushed off the home page news feed altogether, a new ad will then appear in the third position. Deitch said marketers will be able to target ads to users with data about their location, school, gender, age, and other characteristics.

Last month, the news feed feature itself became the focus of a huge backlash. Although it doesn't publicize any information not already available to other users, the broadcasting of potentially embarrassing personal details--including romantic relationships broken off, friendships gone sour--appeared to some users to be a violation of their privacy.

A vocal group of users organized in opposition to the feature, creating a public relations crisis for the company. Calm was restored when Facebook's founders issued detailed explanations of privacy settings, and apologized for introducing the new feature without more consultation.

Originally a site just for college students, Facebook recently opened its doors to all Web users.

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