Privacy Maven

Facebook’s new ad network allows companies to interject themselves into the social networking site quite literally as if they are fellow members:

Facebook has thrown down the gauntlet in front of Google, introducing an online ad platform designed to help businesses reach its social network of 50 million users.

With industry pundits predicting that Facebook would usher in a new era of socially-networked advertising, the Palo Alto, Calif., company introduced Facebook Ads, an ad system to help businesses target advertising to audiences they want through friends’ referrals.

Facebook Ads, announced by CEO Mark Zuckerberg at an event in New York on Nov. 6, also includes an ad system that spreads brand messages virally through Facebook Social Ads and an interface that can be used by marketers to gauge relevant user activities on the site.

Zuckerberg introduced Facebook Ads with the support of key partners, including Blockbuster, CBS, JPMorgan Chase, The Coca-Cola Company, Microsoft, Sony Pictures Television and Verizon Wireless.

To champion Facebook Ads, more than 100,000 new Facebook pages launched today, allowing users to interact and affiliate with businesses and organizations in the same way that they interact with other Facebook user profiles.

Businesses can add photos, videos, music and Facebook Platform applications. Moreover, third-party developers have created applications to enhance Facebook pages, allowing users to book reservations or share reviews of restaurant pages.

In one example, Coca-Cola will feature its Sprite brand on a new Facebook page, inviting users to add an application to their account called “Sprite Sips,” which will allow users to create an animated Sprite Sips character they can share with their friends on Facebook.

The article continues. In an Ad Age article, the Facebook CEO discusses the ad network:

Facebook CEO Mark Zuckerberg said the initiative, called Facebook Ads, points to the future of advertising after the end of mass media.

“Nothing influences people more than a recommendation from a trusted friend,” Zuckerberg told a packed room of advertisers, agency executives and press. He called peer recommendations, “the Holy Grail of advertising.”

By Zuckerberg’s estimates, Facebook is aiming for a much larger piece of the advertising market than the direct-response business Google has served. He estimated what he called “demand-generation” advertising as a $400 billion market.

If Facebook becomes a key player in generating advertiser demand, it could go a long way toward justifying the lofty $15 billion valuation attached to the company with Microsoft’s recent $240 million investment. (Facebook will only take in $150 million from ads this year, per current estimates.)