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Facebook ‘Places’ is an advertising game changer

Facebook, the world’s biggest social networking site, has launched an application that allows users to share their geographical location with their friends. The implications for the advertisers who drive the site’s revenue are huge.


Facebook has released a new application that lets users share their precise geographical location with each other.
“Facebook Places” marks the social networking site’s first step into "location-based" services, which are increasingly popular with smartphone users.
The application is only fully functional in the US, but Facebook plans to roll it out to the rest of the world in the coming weeks. The site boasts some 500 million users worldwide.
"Starting today, you can immediately tell people about that favourite spot with Facebook Places," said product manager Michael Eyal Sharon. "You can share where you are and the friends you're with in real time from your mobile device."

Location services are not new, however, and Facebook cannot take full credit for an innovation developed by other social networking services including Gowalla and Foursquare. Gowalla and Foursquare members can already let their chosen circles of friends on the respective services see where they are, and are also able to automatically update their Facebook profiles with the information.

Advertising and privacy implications

The Facebook “app” works by allowing users to "check in" at bars, restaurants, galleries and other venues. By checking-in, contacts linked to that user will know their precise geographical location – which helps Facebook achieve its core goal of bringing people together, now both online and physically.
Facebook’s other core goal, of course, is to stay ahead of the game in bringing in advertising revenue, and location services such as Facebook Places have a big part to play in the evolution of the Internet as an advertising medium.
Facebook founder Mark Zuckerberg said it was yet to be determined exactly how revenue would be generated from Places, but location-based services have proven potential.
Individual check ins can be used to drive advertising in a number of ways.
Ads can be targeted more specifically because a user's spending habits are known. Also, the venues themselves can be lured into deals to attract more users.
The new app also raises privacy questions for users. Facebook has been accused in the past of being lax at ensuring its members’ personal details are kept as personal as they should be.
“Places” raises new issues that the facility exposes users to the risk of burglary, stalking and harassment.
Executives and engineers at Facebook have stressed that privacy was being respected and that users will have full control over how location information is shared.

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