As someone whom works with online advertising, I would vehemently stay away from Facebook. The only method Facebook has for generating revenue is advertising. This strategy is similar to revenue streams of other online giants such as Google, Microsoft adCenter (which now powers Yahoo ads), and LinkedIn. It differs, though, in the fact that
Facebook advertising doesn't work; advertisers see almost no return on ad spend through Facebook. To understand why, you have to look at the audiences of each service:
Google: People are
searching. People are
actively looking for something. By targeting ads skillfully, an advertiser can place their product in front of a consumer right when they're in a stage to purchase that product. This results in ad spend
converting into a sale. Google also has the display network, which is when website owners embed ads into their website (such as what you see here at MMM). These ads are notorious for having a much lower rate of return. Why? Because when people are on a website they're seeing unsolicited ads that need to be
pretty damned convincing to entice a user away from what they're doing (which usually isn't looking for something). Display advertising is more popular for branding purposes, and a large ROI simply isn't expected. Google makes it's $35 billion annual ad revenue by researching when is the best time and place to insert an ad for it to work.
Microsoft adCenter: Same premise as Google, just a much lower market share than Google.
LinkedIn: Users utilize LinkedIn to connect and recruit, not socialize. Users connect for the purpose of marketing themselves to keep relevant with their corporate/business contacts, and recruiters go through contacts to find the most qualified job candidates. Certain products do very, very well when advertised on LinkedIn. Educational opportunities, certification programs, seminars, conferences, anything related to employee improvement will actively engage LinkedIn users and result in a return for the advertisers. The detailed information posted to LinkedIn is utilized for specialized ad targeting (by position, company, job experience, education level, location, previous locations, certifications, etc). This is also not a sole source of revenue for LinkedIn; they also sell premium services.
Facebook: Users utilize Facebook to socialize with personal contacts. They do this via posts, games, etc. However, in no way, shape, nor form are users looking for products or services when on Facebook (besides the next best Zynga game, I guess). As such, Facebook advertising is only truly useful for branding purposes (i.e. don't expect any returns). Before social media, something such as Google Display advertising was prominently utilized for this. And, even though it's less effective than search advertisements, it still has a
determinable and traceable return on ad spend. So you get branding, with a modicum of return to justify the expense. Social media advertising lacks even this modicum of return. Companies have invested heavily in the area, dedicating huge advertising budgets in an effort to not miss out on the potentially lucrative advertising medium. These really expensive experiments are finally mature enough that a lot of companies are reconsidering the value of them. For example, GM recently decided to pull their annual $10 million USD Facebook advertising budget,
because it didn't result in any discernible return (
link to article).
Facebook's IPO came when it did because the advertising world is finally accumulating enough data to decide at what level to actually invest in social media paid advertising over a long term. As of now, most large companies have approved virtually any budget asked for contemporary advertising streams such as Twitter, LinkedIn, and Facebook. That's because they didn't want to be the one that was left out. However, now is the point where they're asking for data about what they've gotten from that advertising spend, and advertising departments can only say "you can't compare the value of social media with traditional advertising". Because of that, companies have enough information to work with to decide how relevant the "incomparable value" of social media advertising is to their business model. Social media paid advertising is here to stay, but companies are reigning in the budgets to match the true value to the bottom line. Facebook's IPO came right when they saw a shifting in social media paid ad spend so that they didn't wait til the bubble burst. Within the next year or so most major spenders will have defined deliverables from social media spending and will adjust spending to match the results. This will, from personal experience and research, be much lower than has currently been the case; as such, Facebook's monetization projections via paid advertising will have to be reevaluated.