Last Updated Jan 27, 2011 11:21 PM EST
From a competitive strategy perspective, it's yet more of Facebook's advertising camel poking its nose into Google's Android mobile tent: Because the new feature, titled "Sponsored Stories," will primarily gather ad revenue from mobile Facebook users it begs the question, Why does Google allow Facebook's apps to sit for free on its Android devices, collecting ad revenues but not sharing them with Google?
Sponsored Stories will trigger whenever you check in to a business and mention the business by name in your status update. At the point, the update will become an ad starring you, targeted at your friends. According to Mashable, Sponsored Stories will also be triggered by likes, checkins, actions within custom applications and Page posts. Coke, Levi's, and Anheuser Busch are the inaugural clients.
Sponsored Stories will require Facebook to -- yet again -- update its disclosures to users. Currently, Facebook tells people that it doesn't allow advertisers to use your name or pictures in ads:
If you're an adult, you're probably thinking, "Ugh. I must remember never to use Facebook Places to check-in anywhere ever again." But if you're a teenager you're probably thinking, "This is awesome. I can make my friends jealous when I check in to Hot Topic at the mall." Which is why this will probably be successful.
Facebook also this week acquired Rela8ion, a hyper-local mobile advertising company, in another move that indicates Facebook's increasing focus on mobile devices. Rela8ion -- which is less than a year old and doesn't even have a proper web site -- is trying to create a system that will synch a person's location to the most relevant local ad inventory.
Clearly, both Rela8ion and Sponsored Stories only make sense if you assume that in the future Facebook will be something people will primarily consult from their phones rather than their laptops. That has consequences for Google, which allows Facebook onto its phones even though Facebook's apps currently carry no advertising. Generally, Android apps also serve up Google's AdMob ads and the developer and Google split the take. How long will it be before Google taps Facebook on the shoulder and says, "Excuse me, you're using my media to sell your advertising. I think you owe me money."