So, Facebook took $200MM from a Russian investment group.  I’m going to guess that this falls in the “dumb money” category…

If their goal really is to reinvent advertising, as reported by the Silicon Alley Insider, then I’m going to guess that the Russians will be out $200MM in 5 years, not to mention Microsoft, et al.

Look, advertisers put up banners (cough-MySpace!) and spam you (ahem-Twitter!) because it’s easy.  So far, successful social media campaigns have proven to be too difficult for most marketers to get right.  You have to be authentic, engage with your audience, and develop non-spammy campaigns that are aligned with your brand and value proposition.  I think it’s safe to say that only the top 1% of advertisers (probably less) will be able to do that.  So, if Facebook’s “reinvention” of online advertising has the same constraints, i.e., if these problems are inherent to social media marketing, then the number of potential clients that they have is pretty small.  In addition, those advertisers probably don’t really need Facebook anyway — their campaigns are probably doing great on other channels as well.

Speaking of other channels, compare the social media marketing model to paid search (Adwords).  In social media, you need strategy, creativity, content, execution, etc.  Who has time for that?  Relatively speaking, search is dirt simple: just do some keyword research and bid away… or better yet, outsource it.  I’m not saying it’s the most effective approach, just the most common mindset.  And if Facebook’s potential customers are advertisers, then they need to make it as easy as possible to spend money on their platform.  Just ask anyone who’s used Adwords vs. Panama — not only is their traffic better, but Google makes it infinitely easier to spend money with them.

So, if Facebook wants to make a great leap forward in social media marketing, they have to overcome this hurdle first: make it EASY for marketers!  Then they have to address the user experience & privacy complaints that might come with more ads.  Can they?  Put it this way: I wouldn’t bet $200MM on it.