By John Letzing
Facebook Inc. (FB) on Wednesday started making a form of online
search advertising, a model popularized by Google Inc. (GOOG),
widely available on the social site as it seeks to tap new revenue
sources.
The Menlo Park, Calif., Calif., social network has long enabled
search on its site, which has garnered more than 950 million users,
and has also sold graphical display advertising. But Facebook
hasn't previously linked advertising to its search functions in the
manner pioneered by Google, which allows users to search the
broader Web.
The so-called Sponsored Results search advertising now being
offered by Facebook enables the placement of small, text-based ads
in front of users that can link them to particular Facebook pages
or apps on the site based on a query.
A search on Facebook for "games," for example, now results in a
sponsored result that links to the Facebook page for Buffalo
Studios' title "Bingo Blitz."
The new advertising model for Facebook has been in testing in
recent weeks, and was widely rolled out to users and advertisers on
Wednesday. It uses a model whereby advertisers pay when users click
on the ads, which are targeted to particular entities on Facebook
and not to individual keywords.
Google used a similar model to develop its search-advertising
business, which still accounts for a large portion of the Mountain
View, Calif. company's annual revenue.
Facebook's move into search advertising comes as the company
faces pressure on its stock price following its initial public
offering in May.
The IPO initially priced Facebook shares at $38 apiece, though a
flawed offering process, questions about the firm's ability to
capitalize on mobile users, the willingness of big advertisers to
spend heavily on the site and the elapsing of restrictions on
insider stock sales have all helped cut into its market value since
then.
Facebook shares closed Wednesday at $19.44.
Write to John Letzing at john.letzing@dowjones.com
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