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    Facebook's Advertising Business Is Getting Desperate

    Written by

    Adam Estes

    Facebook stock price hit an all-time low on Friday as a fresh round of concern over advertising spending mounted on Wall Street. The new low price is $18.41, and some analysts expect that number to keep falling, possibly reaching as low as $15 a share. But don’t you worry. Mark Zuckerberg isn’t just going to sit back and get licked by the big bad world of real company problems. He’s doing what Facebook does best. When all else fails, invade users’ privacy.

    The social network is getting ready to launch a new ad product next week that offers companies the ability to target users based on their email addresses, phone numbers or user IDs. The idea is not unlike direct mail marketing or telemarketing. The advertiser must already have your email address, phone number or UID on file — maybe you signed up for a contest or something — and this new system will let them use that data to hunt you down on Facebook. It’s a win-win for the social network and the advertiser. The advertiser gets easy access to a customer they know is already familiar with their product. Facebook gets to charge a premium rate for the new option. The only loser here is the user: you!

    Nobody likes telemarketers or junk mail. Both are pretty invasive and annoying. This new tactic from Facebook also fires up the old privacy worries, too. You might be worrying about why are these two companies swapping cash for my phone number. Shouldn’t that be off limits? Well, Facebook insists that everything is anonymized and necessary precautions have been taken to protect users’ identities. The data that companies send to Facebook is all hashed so that neither company knows the real identity of the users targeted. Furthermore, it’s discarded after each campaign so there’s no need to worry about Facebook building a big database of your personal info. (This is actually what Facebook is already doing all the time, but that’s another blog post for another day.)

    This is all to say, Facebook is getting necessarily creative with their approach to ad sales. Even though aggressive but lucrative strategies like Beacon have been shut down in the past, they’re willing to try anything to get their numbers up. After all, the company’s already lost tens of billions of dollars in market cap since their IPO earlier this year. Don’t feel too bad for them though. They can still afford to hire Frank Gehry to dress up their headquarters.

    h5. Image via Flickr

    h3. Connections:
    * This Is the Way Facebook Ends
    * Sorry Mark, Nobody Wants to Pay For Facebook
    * How to Build a Not-For-Profit Facebook
    * Facebook’s Stock Is Nowhere Near Bottom