Zibaba

Last week the social media gurus were all abuzz about Russia’s Digital Sky Technologies $200 million investment in Facebook and what it means for the future of Facebook. Many people balked at the $10 billion valuation of Facebook. Fortune caught up with Digital Sky partner Alexander Tamas who stated in the interview that he believes that Facebook is worth every cent of the valuation. Analysts are excited to see what the Russian company will contribute to the business model. They bring invaluable knowledge from Eastern Europe where companies are testing different models for social networks. Although Tamas says he is not focused solely on advertising, he did emphasize that it is a strategy they are going to explore. For instance, he said the following about display advertising: “The mistake people are making here is to say display advertising does not work in social networking. That is true, but what does work is much more intelligent ads.” If I am interpreting this correctly, I think what he means is that the platform is not the problem but the ad format is. In other words, what social networking needs is intelligent advertising, not trashy ads about how to become an Internet millionaire or how to get rid of belly fat. These kind of ads teach the users to ignore the ad and therefore teaches reputable brands not to invest in the space. I’m so glad that someone intelligent finally spoke up about the state of advertising on social networks. Or as Catherine Taylor, Social Media Insider columnist, put it “Finally a guy who doesn’t suffer from the Fear of Advertising that seems to permeate so many social media sites.” I am excited for what this means for the future of social network advertising.