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I don't understand why I'll want to use Facebook features when I'm not on Facebook, or why I wouldn't ignore Facebook ads the same way I ignore all ads. But maybe magic web 2.0 fairy dust can mystically make advertising not obnoxious.
I think the theory is that even though people ignore banner ads that just say "Drink Coca-Cola," seeing it enough times will make them drink more Coca-Cola.
Except on the internet you can AdBlock in which case you never see the banners to begin with.
Which would also place you in the vast minority of the general population
Maybe, but only until it becomes the default in Firefox.

What I don't get is why MS don't built adblocking software directly into IE: it would do more harm to Google than anything else they can do, and could be defended as a move to improve the experience for the user.

Then Microsoft might get accused of censoring the internet, and protecting users from ads that sometimes genuinely help users find something they really want. And it would be hard to justify each item on its blacklist separately. And even though it would help some users, they might be accused of unfair practices against Google anyway.
Oh, you mean the way Apple is being criticized already? Doesn't seem to be stopping them...
So google dominates intent driven advertising and facebook is trying to be the king of intent building advertising.

Facebook's competitive advantage is its horde of demographic information that they have on individual people.

I am somewhat undecided on how successful facebook will be at this. They have the information to see what will influence you, but I don't think they have a tool that will allow you to ingest it into your brain.

For example, they may have information that says you like britney spears and that she can influence you, but their mechanism to get influencing messaging to you is through a banner ad for instance. The overall effect is uneffective because the tool (banner ad) is just straight up ignored by most people.

So the vehicles that exist in delivering advertising content online is just not effective and there needs to be a better way that needs to be created.

The initial results of such tools that facebook to build intent don;t look to be effective.