This kind of abuse is a logical consequence of ad based business models. If the person who uses a service/software is not the person who pays for it the result is a conflict of interest and quality will suffer. We're seeing different variations on this theme in enterprise software and in public services. It doesn't even matter that ultimately the user may indeed pay for the service indirectly. Once you cut the direct ties, the alignment of interest is lost and the whole thing becomes a futile ethics debate.
Nice summary, never thought of it that way.
Facebook also doesn't hold itself up as a "do no evil" type of place, so I don't think they have any reservations of how they will use the social information (unlike google, who whilst being ad funded practically 100%, are held up to higher standards - how long that holds will be interesting to see).
That's not necessarily true. Google's advertising market is based entirely on matching the impedance between customers and advertisers. People advertising valuable things that customers often click on don't have to pay much to get good placement, meanwhile spammers trying to get an undeserved spot pay a ton for the privilege.
Where Facebook differs is that with ads that aren't based on click through rates or some other user action, there's no concern for how users like or dislike what's being advertised. Facebook can focus on making the advertisers happy, and the customers have to bear that inconvenience as their cost of using the site.
You're assuming, in principle, that ads can add value to a service. That's disputable. If at all, it's only valid for some types of sites like fashion magazines. Most of the time it's an inconvenience that people bear as the cost of using the site, no matter how well the matching works.
The question is whether this way of bearing the cost helps the overall quality of services. And I think the answer is clearly no. If there was a direct way for users to pay the exact same amount of money, services would be better. Unfortunately there is no such alternative way in many cases.
