Facebook just raised $500 millions. The social network is supposed to be worth $50 billions! Quite a lot, since their annual revenue is about $2 billions.
Facebook knows a lot about their users (almost 600 millions!). Facebook knows your gender, your age, your friends and your activities. Thanks to Facebook Connect, Facebook also knows most of sites you've visited.
If used smartly, Facebook can use this data to serve relevant ads and become the king of targeting. Even better than Google and with a much wider range than Criteo. This is the way ads will be sold in the future. Prices will be determined depending on the web surfers, not depending on the web site hosting the ad (see the article: "Give value to the audience").
The question is: why does Facebook need money? Because they want to build a wider ad network. Something similar to Google AdSense, but dedicated to display advertising. The money will be used to develop this network.
Google is very profitable today because they make money on a wide ad space with many publishers. Facebook could do just the same and differentiate from Google thanks to a great targeting tool using the ad network data (gender, age, likes...).
Facebook could earn an awful lot of money with an ad network.
That would be great because small publisher would have the choice between Google and Facebook to monetize their ad spaces. This would probably increase the selling price (which is incredibly low today).
I only fear that Facebook and Google will lower the market advertising prices. Their platforms would be very efficient thanks to the targeting. But they would sell it for a low price because they don't use sales people but an automatic bid platform. We can only hope that advertisers will have to bid higher in order to have a sufficient scale for their campaigns.
EDIT:
How AdExchanger sees the future of Facebook.
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