Facebook's Strategy better than Myspace

Facebook is creating an automated service that combines e-commerce with word-of-mouth marketing. So when a Facebook user buys something, the seller will ask for permission to promote that fact to his or her social network (and, presumably, pay Facebook a fee if the user agrees). That's more akin to an Amazon seller who pays a commission than an advertiser who pays for a click on Google (Charts, Fortune 500).

The Facebook strategy isn't just about selling stuff. It's also about promoting brands. For instance, today I indicated I am a "fan" of The New York Times. Facebook will now broadcast that fact into the "Newsfeed" that my friends see as they log into the service -- and The New York Times benefits.

Facebook's chief competitor, MySpace, has long allowed members to befriend bands or brands. The difference is that Facebook distinguishes between advertisers and users. On MySpace, you make friends with a brand just like you would with, say, a new coworker. On Facebook, you can't make friends with anything other than a human being. Your affiliation with marketers on Facebook is completely different.

Facebook's plan to let people express online their offline relationships is unique from anything MySpace and most other social networks offer. To now attempt to inject sponsors into a user's social network -- and to do so without disturbing the human relationships that have allowed Facebook to thrive -- is fascinating and ambitious.