For all the talk and buzz around Facebook's social networking and "Web 2.0" features, I think many people forget just how dependent Facebook is on the execution of a successful "Web 1.0" strategy and 1-to-1 targeted advertising.
Like Google, Facebook makes the majority of their revenue from advertising. But unlike Google's pay-per-click (PPC) model, Facebook was largely dependent on a CPM model that guaranteed they got paid for ad impressions... not clicks. Until recently, the relevance of my Facebook Ads were not very relevant at all.
But it appears that Facebook has finally figured it out. Their PPC program is underway and their personalization engine is gaining ground on Google.
For example, the ad below knows I'm in a ".NET Developers" group and has a call to action (CTA) to register for a .NET conference. Other ads use my age or college education in the CTA.
Login and click around Facebook and take a look at the flyers on the left side of the screen and judge for yourself just how relevant they are.