Question 1: Read the following case and answer the questions given in the end.

Facebook has brought a whole new level of personal marketing to the world of business. The social networking Web site fulfills people's desire to communicate and interact with each other and uses that power to help other companies target very specific audiences with personalized messages.

Facebook was founded in 2004 by Mark Zuckerberg, who was a student at Harvard University at the time and created the first version of the Web site in his dorm room. Zuckerberg recalled, "I just thought that being able to have access to different people's profiles would be interesting. Obviously, there's no way you can get access to that stuff unless people are throwing up profiles, so I wanted to make an application that would allow people to do that, to share as much information as they wanted while having control over what they put up." From the beginning, Facebook has kept its profiles and navigation tools relatively simple in order to unify the look and feel for each individual. Within the first 24 hours the Facebook Web site was up, between 1,200 and 1,500 Harvard students had registered and become part of the Facebook community.

Within the first month, half the campus had registered. Initially, Facebook's Web site could only be viewed and used by Harvard students. The early momentum was tremendous, though, and Facebook soon expanded to include students throughout the Ivy League and other colleges. The initial decision to keep Facebook exclusive to college students was critical to its early success. It gave the social Web site a sense of privacy, unity, and exclusivity that social media competitors like MySpace did not offer. Eventually, in 2006, Facebook opened up to everyone. Today, Facebook is the most popular social networking Web site in the world, with over 500 million active users. The site allows users to create personal profiles with information such as their hometowns, work, educational background, favorite things, and religious affiliation. It encourages them to extend their network by adding other users as friends, and many people try to see how many "friends" they can accumulate. To interact with Facebook friends, users can send messages; "poke" each other; upload and view albums, photos, games, and videos; and "tag" or label people in their photos. They can post comments on friends' "walls" and create status updates viewable to everyone. In summary, Facebook is fulfilling its mission to "give people the power to share and make the world more open and connected."

Facebook has become a critical marketing component for just about any brand for several reasons. First, companies, sports teams, musicians, and politicians can create Facebook pagesa place to communicate to and with their fans. Facebook pages offer groups and brands a way to personally interact, build awareness, communicate, and offer information to anyone who takes an interest. Companies use Facebook to introduce new products, launch videos and promotions, upload images, communicate to consumers, listen to feedback, and make an overall personal look and feel. Even politicians from around the worldfrom the United States to the Philippinesuse Facebook to push their campaigns and communicate with supporters on a local, personalized basis.

Facebook also offers targeted advertising opportunities.

Banner adsthe company's major source of incomecan target individuals by demographic or keywords based on the specific information they have placed in their profiles. Adidas, for example, uses Facebook to promote specific labels within the company, target consumers regionally, and give the brand a personal touch. The head of Adidas's digital marketing group explained, "Wherever our fans are, we're going to use Facebook to speak to them and we're going to try to speak to them in a locally relevant way."

Facebook's growth and influence have been incredible. In one survey, college students named Facebook the second most popular thing in their undergraduate world, tied only with beer. And Facebook is not used only by undergrads. Of the 150+ million users in the United States, 29 percent are aged 35 to 54, while 25 percent are aged 18 to 24. Overall, women represent the fast-growing segment. Facebook also tends to have a more upscale, educated, desirable demographic than competitive social networks,and therefore it charges more for its advertising ads. In 2010, Facebook surpassed Google as the top Website in the world based on unique visitors per month and also ranked number one for number of pages viewed per month. Facebook has become an important part of consumers' everyday lives and therefore a critical component in personal marketing strategies.

Question

Discuss the recent privacy issues that challenged Facebook. Will privacy restrictions limit its ability to offer personal marketing opportunities?