Somini Sengupta of the New York Times writes:

Within days, friends of Nick Bergus started seeing his post among the ads on Facebook pages, with his name and smiling mug shot. Facebook -- or rather, one of its algorithms -- had seen his post as an endorsement and transformed it into an advertisement, paid for by Amazon.

In Facebook parlance, it was a sponsored story, a potentially lucrative tool that turns a Facebook user's affinity for something into an ad delivered to his friends.

Amazon is one of many companies that pay Facebook to generate these automated ads when a user clicks to "like' their brands or references them in some other way. Facebook users agree to participate in the ads halfway through the site's 4,000-word terms of service, which they consent to when they sign up.

This new twist on advertising has already proved to be tricky. Users do not always realize that the links and "likes" they post on Facebook can be deployed for marketing purposes.

Facebook has told investors that consumers are 50% more likely to recall an ad if it came with a plug from a Facebook friend.

Facebook interprets LIKE as a statement of a user's permission -- and a green light to create an ad:

"So Sponsored Stories creates a zero-sum game," Eric Goldman wrote. "I as a user probably don't get any value from the public presentation of my implicit endorsement (if anything, it might hurt my position with my friends), but Facebook and its advertisers benefit from it."

And Facebook is just getting started.

Just think about when Facebook rolls out Mobile Sponsored Stories in full force.

BUY CHEETOS, ADAM. YOUR FRIEND ERIC LIKES THEM.

Facebook and junk food do seem like they belong together.

Like button was introduced by Fb two years ago with this: "On Facebook and now anywhere, the Like button offers users a lightweight and consistent way to share the things and topics that interest them."

https://developers.facebook.com/blog/post/377/

They just forgot to mention back then that using this button for next two years will retroactively(!) earn one a free priviledge of being featured in ads, bringing more value to Fb (and possibly decreasing one's social capital)).

I think that an easier and more profitable way for Facebook to monetize users' Likes is to insert (halfway through the site's 4,000-word TOS) a note that each Like the user ever pressed,retroactively means that the user owes Facebook additional 100$)

For sure most of the users will kindly comply to this default setting, 100B valuation will be instantly justified, and everyone will be living happily ever after))!

I LIKE your sense of humor.

It does seem like Facebook has planned on using its users for a very long time.

We are not the customers of Facebook.

Advertisers are the real users of Facebook; people are Facebook's product.