An example would be purchasing a ticket to a concert. Usually, a small subset of your friends would receive a notification of this action, however, in the future Cheryl Crow or Ticketmaster could pay for this to be distributed to your full friend group.

Kendall said Facebook will roll out the new plan in the next 6 to 12 months.

How's this different than Facebook's failed Beacon product? Not very. But we count at least three ways. For one, Facebook widgetmakers will be able to participate by serving the new Social Ads, though Kendall was light on details. For another: Marketers didn't pay to be a part of Beacon. They'll have to pay now. Finally, we're betting Facebook learned its lesson and will make it easy for users to opt in and out. We still say the best way for Facebook to turn its users into a team of product marketers 100 million strong would be to offer them a cut.

Have you heard anything about the problems Facebook is having with Social Ads? Today my company was undercharged about $225 for yesterday's ad spend. That's a good way to stay unprofitable.

The advertiser wonders: "Maybe somebody should tell Sheryl Sandberg that cutting company subsidies won't help if you can't accept money. "

Facebook charged advertisers $300,000 a quarter for a sponsored group; its take from pay-per-click ads promoting Facebook pages is far less certain. But sponsored groups were sold by Facebook's small team of human salespeople; Facebook Pages ads are sold through an automated, self-service system akin to Google's AdWords.

Facebook's hire of Sheryl Sandberg, who oversaw AdWords at Google, was one sign Facebook would be betting on automated advertising. The abandonment of the lucrative sponsored groups is another.

Zuckerberg seems cocksure about the payoff from Social Ads. He has told employees that Facebook will bring in between $300 million and $350 million in revenue this year, a swift increase from last year, when revenues from sponsored groups sustained the company. He seems confident that change is coming. Perhaps so. But for the impatient young man, who will turn 24 in 12 days, will it come fast enough?

The whole idea behind free Facebook Pages for musicians, business and brands is to get them in the door, get them hooked, and get them to pay for ads to promote their page. Don't expect Ping Pong Music to open their wallet anytime soon now. "It just upsets me a little to think they could let this happen," our source tells us.

"VideoEgg is the bait and switch. CPM is bullshit, and [Facebook's] Social Ads are bullshit," said Mark Pincus during a panel on Facebook applications at the annual Game Developer's Conference. Pincus said he was lucky to get 5 cent CPMs on his apps. What Pincus didn't mention: His competitors at Social Gaming Network are making at least $100,000 a month from their Warbook application — all from VideoEgg-run advertising campaigns.

Aware that Facebook's search engine sometimes take 48 hours to index new pages, Attention PR's Naomi Hirabayashi told us she waited until today to approach customer service. That's when Facebook got obnoxious. Here's the email sequence.

Think this kind of service will inspire Attention PR's client to buy SocialAds to promote their invisible Facebook Page?

The idea of targeting ads to willing customers is not wholly flawed. HotorNot founder James Hong points out that more than 32,000 860,000 Facebook users have declared Starbucks "hot" on his company's Facebook HotLists application. Not shabby at all, but even then, that hasn't hit mass-audience status. Let's say Starbucks advertised to every single one of those users and got them into a coffee shop every day? It still wouldn't really move the needle on sales.

And if Starbucks visits are on the decline, does Starbucks want to preach to the converted — or reach new customers who don't already identify with the brand? Perhaps Starbucks should buy ads that are targeted to people who aren't its fans. Or here's an idea. How about an old-fashioned TV campaign? Last I checked, almost the entire population of the U.S. watches television, while only two-thirds are online.

One agency source has a client already buying into the new product. But, he told me, a Facebook ad "still needs some creativity from advertisers, so it's not a home run in everyone's case."

Another skeptic, a CEO from a rival social network, told me the most impressive aspect of the whole ordeal was Facebook's PR machine. He particularly liked Mark Zuckerberg's bit about how "Once every hundred years media changes." (So did we.)

"That type of over-the-top presentation takes some creative talent," he said. "I don't mean this as a slight or anything. I admire the fact that they're able to present a non-entirely new concept as earth-changing and people eat it up. They are in the spotlight and they are milking it."

See, as Facebook members these days, we should each think of our friends as an audience and ourselves as a brand. Facebook does.

When someone "friends" you, they're subscribing to a stream of your activities, just like they would subscribe to an RSS feed or even a magazine in the mail. They are subscribing to you, the brand. So your friends are your audience because they are entertained by your brand. But they are also still your friends, so they trust your brand. Facebook knows this and that's why they plan to use your name in association with advertisers.

But if you are the draw, shouldn't you get paid for your endorsement? Think about it this way. If you ran a blog which kept all of your friends updated with all the information contained on your Facebook profile, you would be able to monetize any audience by becoming an affiliate of Amazon.com. Then, each time a member of your blog audience clicked on a link, you would earn up to 10 percent of any amount spent.

Apple's iTunes Store pays a 5 percent commission to its affiliates. eBay pays out 50 to 75 percent commission. Google's AdSense can turn a personal blog into a microbusiness. But Facebook? Facebook plans to take your audience and use your personal brand to convince them to buy things without compensating you.

But I don't mind being your pitchman, Facebook. I'd just like a little kickback. And the thing is, I might get my wish. Not from Facebook, but from its advertisers. See, Facebook won't use your brand to endorse a product unless you sign up to become a "fan" of that product on Facebook. And if we as Facebook users remain selective on which brands we'll become "fans" of, we might be able to wield a little power.

Brands should have to bribe us to use our personal brands to endorse their products. I'm not expecting cash. But, Dove, if you want me endorsing your campaign for Real Beauty to all my friends, I want at least 10 percent off next time I buy a bar of soap. You can send the coupon to my Facebook inbox.

2:11 p.m. Eastern: "Security's crazy. Looks like Facebook brought their entire executive team. No sign of Zuck yet, but Gideon Yu and Owen Van Natta are around."

2:37: "No adidas." No Adidas? Does that mean Zuckerberg's not here yet? Or that he's here, not wearing his trademark sandals? Did he actually slap on a pair of loafers?

2:42: "Diff shoes." Zuck is in the house! Without Adidas sandals!

3:03: Seems our mole's gone quiet for the moment. S/he's a smart one so maybe our tipster is playing it safe for the moment.

Meanwhile, we'll fill you in on some details from Facebook's press release.

More details on landmark partners, which include Blockbuster, CBS, Chase, The Coca-Cola Company, Microsoft, Sony Pictures Television and Verizon Wireless and another "60 major consumer and Internet brand partners highlighted at the launch of Facebook Ads."

"Facebook Ads represent a completely new way of advertising online," the release says Zuckerberg will tell the audience in New York.

For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation. And they're going to do this by using the social graph in the same way our users do.

One way they'll do that is through Facebook pages. They're like user profiles for companies, something MySpace has been doing for a while now.

Another way is through "Unique Ads with Social Actions." These are the Social Ads. They seem to be ads that force users to spam each other. "Social Ads combine social actions from your friends - such as a purchase of a product or review of a restaurant - with an advertiser's message."

Facebook's wary of privacy concerns. "No personally identifiable information is shared with an advertiser in creating a Social Ad." Here's a whole new disclaimer:

Facebook has always empowered users to make choices about sharing their data, and with Facebook Ads we are extending that to marketing messages that appear on the site. Facebook users will only see Social Ads to the extent their friends are sharing information with them.

Why all the worry? Behavioral targeting, which Facebook is calling "Facebook Insights" is the big pitch.

Facebook Insights gives access to data on activity, fan demographics, ad performance and trends that better equip marketers to improve custom content on Facebook and adjust ad targeting. Facebook Insights is a free service for all Facebook Pages and Social Ads.

3:29: And our tipster returns to life! "advertisers are drooling. I think users will find it weird"

That, apparently, about wraps up the show. Did our tipster miss any telling details? Let us know.

At the event, to be held at Loft Eleven on West 37th Street, word is Zuck will give a speech around 2:30 p.m. and then a few panels will leach any remaining enthusiasm out of the room. Finally, there's to be a Q&A session for the press.

Expect big buyers to be in attendance. Rumor is Conde Nast, Nike, Apple, Sony, General Motors, Coke, CBS, Chase, and Verizon have already paid out $300,000 each to be "Landmark Partners" in today's announcement. Madison Avenue is desperate to figure out this whole social networking thing.

Dear readers, we have our sources at today's event (a certain Alleywag will be in attendance), but we could always use more. Going? Inform us of your plans and then tell us your take while you're there.

OK, so the leaked screen looks pretty much like any old Facebook page. But still, there's some new information here. SocialAds won't just be a distributed ad network like Google's AdSense. They'll also feed updates into users' news feeds. Let's say you click on an ad and buy a Vermont ski vacation package? Now all your friends will know you did. Great! Google's AdSense ads, targeted to the content of the Web page you were reading, were just creepy. Now Facebook's SocialAds promise to be creepy and embarrassing.

Looks cozy, no? Better be. If Facebook intends to keep all of Madison Avenue locked up for the entire afternoon, as I've been told, they better bring the key to the liquor cabinet, too.

Loft Eleven is usually rented for wedding receptions and so the same rules apply. Clink! Clink! Clink! Pucker up, Zuck, here comes big daddy Ballmer! Yes, you have to dance the first dance with him!

See, it's still a 360 view of a New York, cause that building 5 feet from the window? It's in New York. OK? Shut up; eat your food; buy ads.

Enough with the soft lighting. This one's for the engineers.

"Web sites and search engines are able to provide valuable services to consumers for free due in large part to advertiser funding. Like commercials on television and ads in newspapers and magazines, online ads have become staples of the Internet medium. Without them, many web sites would either have to charge subscription fees or would simply cease to exist."

Here's an idea to wake you up. Imagine what Steve Ballmer would do in this situation if he were Google's CEO.

No boring videos from this guy. No way. Instead, he'd terrify the town hall-goers with horror stories about behavioral targeting.

Why? Because while Google's OpenSocial initiative doesn't look like it's going to dent Facebook, shooting the tires out on SocialAds, the behavioral targeting ad network Facebook is expected to launch next week, would actually do some damage.

I don't need a costume. I'm just going to go around telling people I'm the Valleywag, to see if they jump out of their skins. Trick or treat!

"Facebook Music" will be the next salvo fired at MySpace. The platform will give musicians, as we suspected, their own miniature network where users can become "fans," watch videos, listen to music, interact with the band and other users and get tour information.

We still think a partnership with iTunes makes the most sense for Facebook, as iTunes is by far the largest digital music distributor. But, a standalone Facebook music store wouldn't be out of the question. Look for some fancy in-house applications as well, possibly competing with music-focused iLike, one of the most popular apps on Facebook.

Advertising and promotion of new artists and albums could tie in to SocialAds or the enhanced Facebook Flyer system. If a band shares fans with Green Day, for example, they could focus their ads and attention on Facebook users who list Green Day as their favorite bands. (And we, meanwhile, could make sure to unfriend those people.)