Does Facebook Connect Connect Facebook to Revenue?

Last Updated Feb 23, 2009 4:36 PM EST

Tomorrow marks the second high-profile use of Facebook Connect, the Facebook application that lets users interact with their Facebook friends while they are on other sites. The first one was the inauguration; now CNN and Facebook are busily promoting a second Connect collaboration around tomorrow night's "State of the Union" address. So what does CNN have to pay for the privilege of using FB Connect? Nothing. The code is free.

OK, so does Facebook generate revenue from some other aspect of the relationship, by, say, getting a split of the ad revenue that runs on the CNN site during the event? It's actually unclear. I got in touch with CNN today to ask just that, and a spokesperson wouldn't comment, simply saying, "'s current partnership with Facebook is mutually beneficial, and as we continue to work together, we know there are a lot of ways to grow the relationship."

For Facebook's' sake, I certainly hope revenue sharing is one of those ways, but it speaks to the general queasiness over -- god forbid! -- Facebook making money that the answer isn't obvious, or easily attainable. In any other industry, a company like Facebook would probably license a service like FB Connect, or share some of the money that comes from giving a traffic boost to CNN. Since we live in a give-the-code-over-to-the-developers-world, the former is unlikely, but the latter should be a no-brainer.

The inauguration numbers showed the potency of social viewing: by mid-afternoon of inauguration day, had 136 million page views and 21.3 million live video streams. That's killer traffic, and something I pray Facebook isn't giving away, using some squishy logic that it's worth partnering with CNN simply to make being a Facebook user a better experience, or that it's worth it just to give FB Connect some visibility. Puh-leeze! As FB Connect comes out with new features (it just announced a new widget that will allows sites to add comments from Facebook users), it would be smart to build in the monetization angle now, before everyone comes to assume that FB Connect comes with no strings attached.

But to get back to its collaboration, getting a cut of the news site's ad revenue would be a beautiful thing. Purists have long railed against monetizing the Facebook site through obnoxious, intrusive banner ads, which is why it shows such small, ineffective ones. Outside of the Facebook interface, however, on sites that people are accustomed to seeing ads on, the bar is lower. Thus, Facebook could comfortably let money flow over that bar without substantially harming the Facebook experience.

Pondering the revenue model for Facebook Connect reminded me of a rather off-hand comment that MySpace founder Tom Anderson made to Charlie Rose during an interview that aired earlier this month. He reminded Rose that Facebook founder Mark Zuckerberg has said the social net '"is not focused on making money." That is not their interest right now. And they're not -- they're losing money,' he said. Anderson made not looking to make money sound profoundly quaint. Like many people, I'm no fan of the Times Square-like vibe of MySpace. On the other hand, at some point, Facebook has to start recognizing its own value, or Anderson will continue to laugh his way to the bank while Zuckerberg goes back to the v.c's, asking for more money in the hopes of making some, some day.