Facebook ad prices go up 40%

Ads
on Facebook Inc.’s site cost 40 percent more per click last quarter than in the
previous three months, as the company’s social-networking dominance let it
command higher prices, according to Efficient Frontier.

The
increase was on Facebook’s self-service ads, not the higher-priced premium ads
that run on user home pages, said Siddharth Shah, senior director of business
analytics at Sunnyvale, California based-Efficient Frontier.

“As
advertisers are understanding this medium, they are allocating budgets, and
it’s becoming increasingly competitive,” said Shah, whose firm helps companies
buy online ads. “They are willing to pay a lot more to get to the consumer.”

Facebook,
which has more than 500 million users, is parlaying its burgeoning popularity
into higher ad revenue. Advertising spending on the site will more than double
to $4.05 billion this year, according to research firm EMarketer Inc..in New York. .

The
company may have reached $2 billion in sales last year, three people familiar
with the matter said in December. Facebook announced in January that it raised
$1.5 billion from investors led by Goldman Sachs Group Inc., placing a $50
billion valuation on the closely held business.

Facebook,
founded in 2004, passed Google last year to become the most visited website in
the U.S., according to
Experian Hitwise, an Internet-tracking company in New York.

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