New York Times:

But unlike other big-ticket corporations, it doesn’t have an inventory of widgets or gadgets, cars or phones. Facebook’s inventory consists of personal data — yours and mine.Facebook makes money by selling ad space to companies that want to reach us. Advertisers choose key words or details — like relationship status, location, activities, favorite books and employment — and then Facebook runs the ads for the targeted subset of its 845 million users.

It shouldn’t be news by now, but it’s worth reinforcing that when you use Facebook, Google Plus and other social networks, you are the product they’re selling to advertisers. Social networks have their place, but there’s an essential transaction happening that you need to be aware of: trading your privacy and your personal data to use the service. Forewarned is forearmed.