This Could Be Facebook's Final Mistake

Facebook (NASDAQ: FB  ) is reportedly ready to make a big push into video ads. AdAge is reporting that the leading social networking website operator is asking advertisers to pay $1 million for one of four daily slots that it plans to roll out later this month.

There's plenty at stake. If Facebook is successful in getting marketers to pay $1 million for these ads, we would be looking at $1.46 billion in incremental revenue over the course of the year.

Why would advertisers pay so much after seeing ads go largely ignored on the site? Well, AdAge also reports that these will be "auto-play" ads that kick in on the desktop the moment that Facebook is fired up. Users won't be able to escape the eye candy, and that could be a problem. 

In this video, longtime Fool contributor Rick Munarriz takes a look at how video ads may backfire if Facebook pushes its luck as to how much its registered members are willing to put up with to keep tabs on their friends and family members.

After the world's most hyped IPO turned out to be a dunce, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

 


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