Facebook Expands User Tracking to Boost Revenue

Facebook may begin snooping on smartphone users in order to target them with more relevant advertisements. The strategy could prove a huge money-maker, but may be a step too far for some of the social network's users.

The massive social network currently makes most of its revenue from advertising. However, it has struggled to cash in when people visit the site using a smartphone.

In recent financial filings, Facebook admitted this could become a serious handicap as more and more people choose to access the social media site from their phones instead of their computers.

Facebook had already found a way around this: it has decided to build advertisements right into its news feeds for mobile devices. They'll be sandwiched between, for example, a status update from your mom and the latest photo from your old school friend.

Facebook Taking Fee For App Downloads

Now the company plans to begin placing advertisements for smartphone apps in Facebook's News Feed. The user will be able to click on the ad and go straight to downloading it from the relevant app store.

If they do this, Facebook will charge the app maker a fee. (Source: wsj.com)

The controversy arises because Facebook will go beyond simply targeting these advertisements through the usual method of examining a user's age, gender, location, interests and other information they've provided when signing up, and by tracking what the user has done on Facebook, such as "liking" a particular company's page.

Facebook to Track Smartphone App Users

Instead, Facebook will now look on the smartphone itself to see what other applications the user has installed, and will make relevant recommendations.

The company is reportedly considering tracking what people do with their smartphone apps, and serving ads on that basis, too.

For example, if you have travel and music applications installed, but rarely use the music ones, you'll likely see more advertisements for more travel apps.

If you often use your travel apps to look at information about Italy, you might begin to see advertisements for Italy-related apps, such as tools to help you learn the language, or to view some of that country's famous art.

There is an important limitation, however: Facebook will be able to take into account and track only the applications that a user has already linked to their Facebook account through the company's Connect feature.

Some enthusiastic gamers, for example, make these links so they can compare scores with their Facebook friends. Now Facebook will also be looking over their shoulders. (Source: businessinsider.com)