Facebook has just announced a new advertising feature which will attempt to harness people’s recommendations to each other. Facebook’s Social Ads system will allow users to endorse products with a message appearing on their friend’s News Feeds. Advertisers will be able to link to those endorsements for a fee. This could either be an external ad or a link to the company’s own Facebook site. Banner ads will now also feature a picture of the person who is endorsing the product.

Facebook is taking the first step in building a business model around one of the most important purchasing factors – the net promoter score. (The simple question of – would you recommend the product to a friend or colleague) If this works, the company will be a pioneer in a new wave of marketing. However, Facebook is treading on a thin line. Over-commercializing the site might turn off a lot of users. After all, do you really care that your friend likes a certain toothpaste brand or drinks Seven-Up? Also, what would motivate someone to announce this to the world? While the News Feed is a phenomenal way of keeping updated, clogging it up with advertising would make it much less useful. It will be interesting to see how Facebook manages this system in the coming weeks and months. It could either be a gold mine or the first misstep in an otherwise brilliant social networking tool.