Facebook wants to be big among small businesses

PALO ALTO, Calif. -- Sheryl Sandberg wants to do for Facebook what she did for Google.

At Google, Sandberg served as vice president of global online sales and operations in a role that helped build the company's money-gushing search-advertising business.

Now, the chief operating officer at the world's largest social network wants the same for Facebook. She envisions those small businesses that joined Google's ad program spending their advertising bucks at the social-networking giant.

The advertising charge from Sandberg, a Fortune 50 listed (most powerful women in business) D.C. powerbroker, comes as the social network has swelled to some 750 million, representing an eye-popping advertising bonanza.

"My dream is really simple," said Sandberg, 42, seated near a framed graffiti rendering of co-founder Mark Zuckerberg at Facebook's headquarters here. "I think every small business should … be using Facebook. We're not going to stop until all of them are using it to grow their business."

Next week, Facebook will unveil a plan to get small businesses hooked. The company plans to offer free $50 advertising credits for up to 200,000 small businesses. When a person clicks on an ad, there's a set rate predetermined for that click through — 5 cents or 25 cents, for example — the advertiser has to pay. Facebook will pick up the tab for the first $50 of such ads delivered under its offer.

This may seem like small stuff, but it's the core to an ad revenue strategy that could justify a monster IPO.

"Credits like that can go a long way," she says. "For $50, most small businesses can target every single person they need to target at least once, and then they can grow their business from there."

With Facebook, businesses can target their paid advertising with a precision not found in most other forms of advertising.

A wedding photographer, for instance, could advertise just to women in a specific ZIP code who list on Facebook that they are engaged. A movie chain could talk just to film fans.

Sandberg estimates that of the nation's nearly 30 million small businesses, 9 million are using Facebook to speak to their customers, and "hundreds of thousands" are spending money on ad campaigns, as well.

While at Google, she used to say that about 50% of small businesses hadn't bothered to make a website yet — a number she says is still in the 40% range.

It's easier for small businesses to turn to Facebook, she says, because they don't have to pay for building a site, and most people can make a Facebook page, or could learn within minutes.

Sandberg says Facebook allows businesses to interact with customers and create viral marketing campaigns. "Facebook takes word-of-mouth marketing and makes it work at scale."

Greg Sterling, an analyst with Opus Research, says most small businesses resist using ad programs such as Facebook's because they're too busy running their business to devote the time.

"Facebook has multibillion (dollar) advertising potential," he says. "But right now, small businesses don't see the need for spending the money. They have their free page, and they're happy with it."

The credits will help, he says. "It gets people to at least try it."

Sarah Loveland, owner of Daddies Board Shop, a skateboard shop in Portland, Ore., began using paid advertising with Facebook in 2010, in hopes of growing her business more quickly. She targeted fans of extreme sports and friends of those who ride skateboards and longboards. The result: She says her business shot up, and she attributes much of it to Facebook.

Small businesses could just continue with the free business pages, "but if you really want to grow, and reach a wider community, you need to have at least 10,000 fans," says Loveland. "Once you're there, you get tons of response every time you post something. You're looked to as a valuable resource to the community, and sales really start to increase."

Sandberg says the social-media giant has created 250,000 jobs — engineers, developers and others who work on Facebook-oriented projects and related social-media jobs at companies. Facebook has 3,000 employees.

"We feel really good about our contribution," she says.