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When Facebook answers to Wall Street

Facebook CEO Mark Zuckerberg delivers a keynote address during the Facebook f8 conference on September 22, 2011 in San Francisco, Calif. Facebook announced its IPO today.

Kai Ryssdal: Facebook has more than 800 million users, which is a not insubstantial chunk of the entire population of the planet. Facebook also knows all kinds of things about its users -- where they live, what they like, where they work, who their friends are and oh so much more. It sells all that information to advertisers, and it's probably making billions of dollars doing it.

Here's the thing, though, as a public company, Facebook is going to have to grow. All. The. Time.

Marketplace's Stacey Vanek Smith has that slice of the story.


Stacey Vanek Smith: Ads on my Facebook page: discount designer dresses, a book about "Downton Abbey" -- my new favorite TV show -- and a "miracle" weight loss powder Kelly Ripa apparently uses. I sometimes click on these ads. I mean, whose thinner than Kelly Ripa?

But apparently, lots of my fellow New Yorkers, apparently, don't.

New Yorkers: No, never. I don't, no. No. No. Sometimes, maybe once or twice but I always wondered if that was a virus.

No, that wasn't a virus -- it was the main way Facebook makes money. And once it becomes a public company, being ignored could be really expensive.

Forrester Research analyst Nate Eliot says Facebook is going to need everyone to pay attention to the ads if it's going to grow at the pace it needs to.

Nate Eliot: The primary way they make money is by selling relatively simplistic little advertising badges to marketers. Facebook needs to go deeper.

Deeper?

Eliot: It's like saying, we know that you live in New York, so we're going to serve you ads targeted to New Yorkers. The fact is, there are a dozen other facts about me that might make a different kind of advertising relevant.

Eliot says Facebook needs to figure out what makes us tick.

The social network's new Timeline layout is a step in that direction, says Justin Smith with Inside Network. Timeline takes all your Facebook information and organizes it in, well, a timeline. So advertisers can track your behavior through the years.

Justin Smith: Facebook could target advertisements toward a much broader set of life events than they do today.

With Wall Street to answer to, Smith says no life event will be too insignificant to count.

I'm Stacey Vanek Smith for Marketplace.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

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