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Over the past few days I’ve been writing about the shift of social networks from technology companies to media companies at the Social Times. If you haven’t been paying attention, you might want to check out a post on Techcrunch today in which Mike Arrington argues that Facebook’s lack of a centrally controlled music service is damaging its domestic growth. Last year I suggested that Facebook is supposed to be launching a music service after a source told me that he had spoken with somebody that interviewed for a position to run a music service. Mike Arrington says that it’s now clear that Facebook is sticking with iLike as its music partner. That was emphasized when iLike was announced as a launching member of Facebook’s Great Apps program. Hadi discussed this during an interview with the Social Times. For Facebook to launch their own competing music service would be a bad political move but as Mike Arrington suggests, “Music is such a big category that is so completely dominated by MySpace, that it seems like they should have their overall music strategy under their direct control.” So is music key to Facebook’s domestic growth? It’s clear that music is definitely one way to attract outside visitors. Millions of bands and artists use MySpace as their central location for promoting their work and that means millions of visitors being promoted to the site. Is there another channel that Facebook can target that has the same level of self-promoting activities? Not that I know of. Is there any other group that you think Facebook should be targeting?

Facebook launched a new kind of ad unit today that has the potential to drive much more engagement than any ad product on the site ever before has: embedded multimedia with comments visible to users’ entire friend list.

Facebook has created new home page advertising inventory with its upcoming redesign. However, this is the first time we’ve seen Facebook fill the sponsored home page slot with this kind of unit. The behavior:

1. Clicking on the ad image opens a video player in-line
2. Comments on the video are visible to your entire friend list.

The comments around the ad dramatically increase engagement with the unit, as the highly visible comments provide an opportunity for users to simultaneously draw attention to the ad by drawing attention to themselves. While this could backfire if comments degrading the advertiser are abundant (I saw a few “LAME!” comments about Tropic Thunder today), the ad comments powerfully take advantage of Facebook’s social dynamics to draw attention to an ad in a way that is impossible without the social graph. When is the last time you heard 9 friends talk about an online ad in the same day?

Ad comments are an interesting step forward in the evolution of “Social Ads.” While this kind of ad may not work as well outside of a few advertiser verticals, I expect that early advertisers will be pleased with its performance.

Today at the OMMA Social in New York City, Seth Goldstein, founder of social media advertising network SocialMedia, announced a new service for advertisers called “Friendship Ranks.” The new service combines data related to peoples’ interactions on Facebook applications to generate more effectively targeted ads. Seth also formally announced “social banners”, a service the company has been experimenting with over the past few months.

The “social banners” are an opt-out advertising service which resides within Facebook applications. Sound familiar? The whole Facebook beacon “fiasco” (as it was coined by the press), was due to it being an opt-out service. SocialMedia has been able to figure out a way to display your friends within advertisements that are present on applications. Technically, they’ve also figured out a way to display a fair amount of this information outside of Facebook.

Two weeks ago while attending the Graphing Social Patterns East conference, one of the attendees approached me to show a page on SocialMedia.com’s website that was able to display targeted ads to me based on information they had collected. I have included a screenshot below. Initially, I chose not to write a post on the issue because I wanted to make sure I got all the facts right.