Here’s How Facebook is Cleaning Up Monetization Efforts

Facebook (NASDAQ:FB) “Likes” go for about two cents a pop on eBay (NASDAQ:EBAY), and everybody from malware writers to desperate social media marketers are using bulk “Likes” to boost the apparent popularity of their pages. More is not always better, and Facebook is cracking down on security to address that. Although Facebook plans to remove “on average, less than 1 percent of Likes on any given page,” so-called “Like-jacking” is undermining the integrity of Facebook’s social infrastructure.

Investor Insight: REALLY? Analyst LIKES Apple and Facebook

Company and brand pages rely on accurate fan count and demographic information from Facebook to make informed decisions about marketing and community development. A million “Likes” from a bot doesn’t do a brand any good. Even a hundred real “Likes” would be more valuable for developing a marketing strategy and helping Facebook monetize ads.

The damage extends to users as well. Facebook users want to see what their social network supports and what their friends are interested in. A million fake “Likes” for a brand means nothing and degrades their motivation to pay for Facebook ads. A hundred friends and family “Liking” a new product could actually mean a new customer.

C = Catalyst for a Stockʼs Movement

More accurate demographic information benefits companies, and will be essential to advertising in the social space. Genuine page popularity benefits users who use Facebook as a communications and information network. Worried investors should see this as a positive, yet small step in the right direction. This is a little piece of evidence that Facebook is working hard to catalyze the stock’s movement with better monetization.

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