Nick Carr is skeptical about Facebook's chances:

If Google and MySpace are struggling to monetize social network traffic, one can only imagine the challenges facing Facebook, a much smaller company with less traffic, fewer resources, and, in general, a clientele more resistant to commercialization than MySpace's. In this light, Beacon seems less like a folly than like a deliberate act of risk-taking, if not of desperation. The rich valuation that Facebook has to live up to demands a lucrative advertising or sponsorship model, and Facebook may well have come to the conclusion that such a model inevitably requires a far more intrusive approach to using members' information and even identities for commercial ends.

I'd say two things: First, the "uproar" over Beacon was a tempest in a teapot. Steve Gillmor nailed this on one of his Gang podcasts at the time - lots of complaining by people who either aren't on Facebook, or are only on the periphery - and continued growth of membership. Meaning, no one on the system really cared. I recall saying at the time something like "Duh, that's how Facebook works".

Contrary to Carr's theory, I expect Facebook will be a lot better at "social advertsing" than Google is. In that space, Facebook is to Google as Google is to Newspapers.

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