Megan Fox

How Facebook fixed the social advertising problem

November 22, 2010: 3:39 PM ET

MySpace was once the big kid on the social networking block, but Facebook beat it in part by improving on its social advertising strategy, or lack thereof.

By Kevin Kelleher, contributor

So much of the discussion around Facebook centers on the way it's shaping our social interactions with others that it's easy to overlook how profoundly the company is rewriting the rules of online advertising. When Facebook's revenue is mentioned, it's usually in the aggregate: The six-year-old company will bring in as much as $2 billion this year and close to twice that next year.

The bulk of that figure will come from selling ads on its social-network platform – a web technology that was seen as barren soil for ad revenue until a year or so ago. Facebook made social ads pay through a number of tricks. One of the most important innovations was to reach out to the smallest advertisers with self-serve ads on its social-networking site. More

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