Facebook Future

I’ve been mulling over the changes and announcements that came out of the last Facebook f8 conference. Most of the attention has been on the topic of privacy. I’m not going to touch on that. Instead I want to look at this reach into the larger web, outside of the Facebook environment. This isn’t new for Facebook, but I think the scope of their reach into the greater web has scaled up quite a bit.

This got me thinking about where all this is headed. Looking out a year or two I see another very large play coming from Facebook – an ad network. Clearly Google AdSense dominates this area right now, without much in the way of a significant competitor. One way that AdSense has been successful is showing ads based on the context of the site the ad is being shown on. The idea being that you’d be interested in those ads because you have some level of interest in the content of the site.

Facebook already makes use of your profile information when showing ads on Facebook.com. Not much of a leap for them to use this profile information to show individually targeted ads on any site on the web. You tie in all the social graph data (can we kill the term ‘social graph’ now?), like what ads your friends clicked on, and the amount of contextual data Facebook can leverage grows to amazingly huge sizes. And there’s no reason why Facebook couldn’t also do page content analysis similar to what Google does.

They’ve already started crawling pages looking for Open Graph data. Not only do they have an enormous amount of data about people using their own site, but it wouldn’t be surprising to me if they are trying to create an index of the entire web. Convincing a portion of the web to add Open Graph data provides even more context for Facebook to leverage.

I suspect the potential for a Facebook ad network could be even greater than Google AdSense. Ads with the context of the data on the page around it is good. Ads with the context of both the page content and the person actually looking at the site could be insanely precise. Some ads could follow you as you go from site to site. Google generates most of its revenue from it’s ad network, and Facebook could be going down that same path.

Here is where someone brings up the topic that Google uses other contextual data points for ads besides just what is on the site. That’s true, things like IP geo location can provide another layer of context. And yes Google will be able to crawl the same Open Graph data, but Facebook has lead there, at least for now. And the amount of profile data that Google has collected is no where near the size and scope of Facebook. And for those who that haven’t provided much content to Facebook, they’ll still be able to make some reasonable guesses based on your friends data.

So will Facebook actually launch their own ad network that anyone can use to show ads in the same way Google has done with AdSense? I think it’s only a matter of time. A more interesting question might be what role with Microsoft play in a Facebook ad network?