Selling Ads on Facebook Is a Tempting but Risky Business

From wired Under the radar, Appfuel — a five-person startup in San Francisco — has been developing an […]

From wired

Under the radar, Appfuel — a five-person startup in San Francisco — has been developing an application that fulfills what everyone knows to be the real opportunity: If a company can mine your Facebook profile to know who you are and what you like, it can show you targeted ads. Without storing any user data, says co-founder Sundeep Ahuja, Appfuel can scan a user’s profile and deliver a targeted ad in under a second. For example, if you fancy The Fray, Appfuel’s system will know the group is playing a concert near you tonight and will offer a link to buy tickets.

Ahuja does, however, acknowledge the elephant in the room: Facebook is likely preparing to do the same thing, as the Wall Street Journal reported in August (subscription required). Facebook says it already targets ads based on profiles. But so far, advertisements on the site do not appear to be closely matched with either users’ profiles or the widgets they’ve installed.