Apparently, 1 billion Facebook “Like” buttons went up all over the web within the week.

Technically, this means, 1 billion web pages now include a piece of JavaScript from Facebook. That piece of Javascript is aware of the user’s identity (and preferences, and social network, …).

This enables Facebook to push out 1 billion advertisements to all over the web at the push of a button. These ads will be 100% targeted to the user, because they can be driven by all the personal information Facebook has about their users. They will almost certainly be better than Google’s because they are more aware of the user, and most crucially, can be social: e.g. “Your friend Joe is looking at SUVs today, would you like to assist him?” and stuff like that, just as with the “Like” button.

There is nothing anybody has to do, just Facebook needs to turn the knob on their end. Of course, they may decide not to overload the “Like” button, in which case it would be less automatic, but the exact same architecture can be used for ads, and now tens of thousands of sites know how to include them because they learned how from including the Like button.

Regardless which, if I were Google whose revenue is 90%+ advertising, I’d be really uncomfortable. How would you compete if you were them?