Facebook has unveiled an advertising model which it claims will allow businesses to target advertising precisely to a desired audience.
Facebook Ads enables users to learn about new brands and products through the "trusted referrals of their friends".
Mark Zuckerberg, founder and chief executive at Facebook, said: "Facebook Ads represents a completely new way of advertising online.
"For the past 100 years media has been pushed out to people, but now marketers are going to be a part of the conversation. And they are going to do this by using the social graph in the same way as our users."
Zuckerberg added that Facebook Pages allow users to interact and affiliate with businesses and organisations in the same way they interact with other Facebook user profiles.
More than 100,000 new Facebook Pages launched this week covering the world's largest brands, local businesses, organisations and bands.
"The core of every user's experience on Facebook is their page and that's where businesses are going to start as well," said Zuckerberg.
"The first thing businesses can do is design a page to craft the exact experience they want people to see."
Just like a Facebook user, businesses can add all the information and content they want, including photos, videos, music and Facebook Platform applications.
Outside developers have created a range of applications to enhance Facebook Pages, such as booking reservations or reviews of restaurant pages, buying tickets on a movie page or creating a custom T-shirt.
Companies launching applications for Pages include Fandango, iLike, Musictoday, OpenTable, SeamlessWeb, Zagat Survey and Zazzle.
Advertising messages will gain distribution through what Facebook has termed the "social graph", a network of real connections through which people communicate and share information.
When people engage with a business Facebook Page, that action will spread information about that business through the social graph.
Users can become a 'fan' of a business and can share information about that business with their friends and act as a trusted referral.
Facebook users can interact directly with the business through its Facebook Page by adding reviews, writing on that company's Wall, uploading photos and in any other ways that a business may want to enable.
These actions could appear in users' Mini-Feed and News Feed which allow users to share information more efficiently with their friends.
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