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Facebook is launching targeted mobile ads based on app usage data (i.e. personal user data)

[1]It’s not the first time that we are hearing about the social networking giant trying to peep into the lives of its users. This time around Facebook is planning is to track the usage statistics and characteristics of mobile apps that Facebook users install on their devices to provide users with ‘targeted ads’ based on the apps they use.

How will Facebook do this? Thanks to Facebook Connect. Many mobile applications, especially those that have even the slightest hint of social networking, use Facebook Connect to allow users to log into services using their Facebook credentials. If an app is not using Facebook Connect, then it probably is connecting with Facebook in some other way. Thanks to this integration with Facebook, Facebook receives a huge amount of app usage data. Facebook will now put this app usage data to use to provide users with targeted mobile ads.

In addition to tracking which apps are used, sources close to the issue at hand say Facebook may also track what people do within apps which of course would open a whole new Pandora’s Box. However, Facebook has not made a final decision on the additional tracking as of yet.

It is not entirely clear how users will be able to opt out of this tracking, if opting out is possible at all.

In contrast, Apple tracks which applications its users install from its App Store and iTunes and that data is used to provide users with targeted ads. Google also tracks which apps are downloaded through Google Play Store but as of yet Google doesn’t provide targeted ads based on the apps its users install. Neither Google or Apple track what the users “do” in their apps to provide targeted ads.

Facebook has taken a huge step here in an attempt to increase mobile monetization; and this will most likely attract negative reactions from the general public due to the privacy concerns.

BIA Kelsey analyst Jed Williams said the new ad product signals the beginning of more ways to make money off Facebook Connect. “Hundreds of millions of consumers are entrusting their online identity to Facebook so what are the possibilities for Facebook to monetize that?” he said. “Here’s one experiment.”

Speculations about the date of announcement of this new “feature” (as Facebook might call it) is still going on and according to the latest rumors, the date of launch for the new targeted ads might be around July 30. Reflect in the comments [2] below.

[via The Wall Street Journal [3]]