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Facebook looks to cash in on user data

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Facebook looks to cash in on user dataToday more than 600 million people have Facebook accounts. The average user spends seven hours a month posting photos, chatting with friends, swapping news links and sending birthday greetings to classmates.

Now the Palo Alto company is looking to cash in on this mother lode of personal information by helping advertisers pinpoint exactly whom they want to reach. This is no idle boast. Facebook doesn't have to guess who its users are or what they like. Facebook knows, because members volunteer this information freely — and frequently — in their profiles, status updates, wall posts, messages and "likes."

It's now tracking this activity, shooting online ads to users based on their demographics, interests, even what they say to friends on the site — sometimes within minutes of them typing a key word or phrase.

For example, women who have changed their relationship status to "engaged" on their Facebook profiles shouldn't be surprised to see ads from local wedding planners and caterers pop up when they log in. Hedgehog lovers who type that word in a post might see an ad for a plush toy version of the spiny critters from Middle-aged men who list motorcycling as one of their hobbies could get pitches from Victory Motorcycles. If a Facebook user becomes a fan of 1-800-FLOWERS, her friends might receive ads telling them that she likes the floral delivery service.

Marketers have been tracking consumers' online habits for years, compiling detailed dossiers of where they click and roam. But Facebook's unique trove of consumer behavior could transform it into one of the most powerful marketing tools ever invented, some analysts believe. And that could translate into a financial bonanza for investors in the 7-year-old company as it prepares for a public offering, perhaps as soon as next year.


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