Comment Re:It'd be interesting to see (Score 1) 108
If a site like Facebook with such a massive userbase could turn a profit on late 90's style dumb banner ads. No crazy tracking, just first party images serving links to other sites and getting paid for clickthrough's and affiliate orders.
At a first guess: It probably could. With careful tuning of bid prices, my guess is that non-targeted (or at least non-user-data-targeted - e.g. "you're on Sports Illustrated, you're probably interested in a special offer off ESPN") ads could turn a profit. But they could turn _more_ profit if targeted, and a publicly traded company would be under irresistible pressure to exploit that.
Also I would be interested to see how much money-per-user Facebook generates from user data, just curious where that $20 a month price is calculated and whether that is a "bad faith" price or not.
Facebook doesn't have to price their "get out of advertising jail" card to match the lost revenue - they can include whatever profit margin they like, or they could intentionally run it at a loss. However, lots of analysis has been done on this, and perhaps the most interesting (see https://washingtonmonthly.com/... ) is to analyze how much ad revenue is fairly conclusively linkable to data-based targeting. And the answer appears to be 52%.