Facebook Placing Ads in the News Feed

Facebook recently announced that they will start putting ads into their users' news feeds. This decision came on the heels of Facebook deciding to go public. The news feed ads will show on their mobile apps as well as the normal website.

For now, these ads will only be from pages that a user is a fan of. For example, if you are a fan of the ComputerTooSlow facebook page, it is possible you would see an ad from ComputerTooSlow in your news feed if the site decided to advertise on Facebook.

Right now, this doesn't sound like too huge of a deal. However, what many users are worried about is that the fan page stipulation will be lifted at some point. Many users think that Facebook is just breaking users in on the idea of ads in the feed and that Facebook will eventually allow any ad to appear in the news feed.

Facebook Trying to Increase Revenue

The major reason for this is that Facebook is trying to find ways to increase their revenue before their upcoming IPO. The revenue is growth is starting to slow. Their revenue grew 104% in 2011 and is expected to grow 54% this year. However, they are only predicting a 21% increase next year and this is one reason they are making the change.

Facebook thinks that the ads in the news feed will perform much better than the current side ads. Some estimates show that these new ads will bring in 3 times more revenue than the current side ads. The current side ads will also stay. Facebook is hoping that they can keep performance on the side ads while increasing revenue with the news feed ads.

Ads on Logout Page

Another change rolling out at the same time is ads on the logout page. These ads will be located within the logout message. With the large number of impressions that this page gets, Facebook is hoping that these ads will contribute significant revenue.

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-By Dominic

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