26 February 2009

Ad strategy at root of Facebook privacy row

(Reuters)
by Eric Auchard. Social networking phenomenon Facebook has beaten arch-rival and former market leader MySpace by most measures of popularity, except the one that pays the bills. While Facebook has outpaced MySpace in bringing in members - it has 175 million active users at the latest count, compared with around 130 million for MySpace - it has struggled make money from them. While MySpace is closing in on $1 billion in revenues, Facebook generated less than $300 million in sales last year. Indeed, Facebook's efforts to drum up revenue have led to it repeatedly becoming the target of some of the biggest online privacy protests on the Web. Its most recent fight earlier this month followed Facebook's attempt to redefine its own rules and assert ownership over anything its members posted on the site. The company has since backed off and is rethinking its policies. See also A false sense of security (BBC).