Advertising on Social Networks Facebook & Myspace launch their ad networks

After wondering for ages how the social networks will monetize their huge population Facebook and Myspace have finally launched their targeted advertising platforms making use of these platforms as a big means for viral marketing. However there are some critical issues users cannot opt out of these advertising so it can be irritating and turnoffs for many users who join these networks to see ads on top of their profiles an example was how recently Orkut ran into problems with ads in Brazil.
Most advertising online today allows advertisers to target people based on location, age and gender but social networks promise to deliver much more focused results as a result of the wealth of personal data users post. It's one of the reasons why Microsoft Corp. paid $240-million (U.S.) for a 1.6-per-cent stake in Facebook in October and why MySpace, which News Corp. bought for $580-million in 2005, is now worth upward of $11.6-billion, more than 20 times its sale price, according to chairman Rupert Murdoch.
Facebook

Facebook is announcing three things: Social Ads (ads targeted based on member profile data and spread virally), Beacon (a way for Facebook members to declare themselves fans of a brand on other sites and send those endorsements to their feeds), and Insight (marketing data that goes deep into social demographics and pyschographics which Facebook will provide to advertisers in an aggregated, anonymous way). These three things together make up Facebook Ads.

Myspace

MySpace launched its HyperTargeting platform in July with a select group of 50 advertisers. The service broke down users into 10 broad "enthusiast" categories - such as music, movies and sports - and allowed advertisers to cater their banner ads specifically to those groups. Now MySpace has expanded those 10 enthusiast categories to more than 100 interest-specific groups and has made the targeting technology available to all its U.S. advertisers. The advantage is even more precise marketing. MySpace expects to deploy HyperTargeting internationally in 2008.

These are interesting developments for marketeers and not so good for the users but lets see how they playout. Via Techcrunch and news.com