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Facebook’s Quiet Move Toward Launching an Ad Network

A sign with the 'like' symbol stands in front of the Facebook headquarters in Menlo Park, California.
Getty Images
A sign with the 'like' symbol stands in front of the Facebook headquarters in Menlo Park, California.

Facebook quietly started running ads on Zynga.com today: the ads look like ads on Facebook , with the same social context, and the two companies are sharing the ad revenue.

It may not sound like a big deal, but it is.

This is the first time Facebook has run ads anywhere other than its own platform. It’s a big first step toward the launch of an ad network, in which Facebook could deliver ads with social context to sites across the web.

An ad network would be a significant new revenue stream for Facebook, especially considering the potential to closely target web surfers with relevant ads with social context. And it would put Facebook in direct competition with Google and other companies like Microsoft , which distribute ads across the web.

Facebook won’t comment on whether it plans to launch a stand-alone ad network, but it certainly has left the door open. Just last month Facebook clarified its privacy policies to include the fact that it can serve users ads that target users based on their personal data, outside of Facebook.com.

Here’s what Facebook does say about its new ad expansion: “Facebook ads and sponsored stories may now be shown on Zynga. We do not share any information about people or advertisers with Zynga."

The ads include a little Facebook “F” and say “Sponsored,” and direct users to Facebook’s help center. Facebook explains that it’s not violating anyone’s privacy: “You’ll only see sponsored stories about activity that has been shared with you. You can remove ads that don’t interest you by clicking the X. Facebook doesn’t sell information that tells advertisers who you are.”

It makes sense that Facebook would start with Zynga—the two companies are so intertwined, with Zynga generating 12 percent of Facebook’s revenue, and Zynga generating the majority of its revenue on Facebook.

We’ll see how soon Facebook takes its targeted ads to other sites.

Questions? Comments? MediaMoney@cnbc.com

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.