Online Ads That Know Who You Know

They aren't just tracking you. They're tracking who your friends are.

The Internet is buzzing with advertising firms that follow Web users from site to site, and now there's a twist: technology that figures out who you share news and ideas with. The idea is called "social retargeting," and it works by mapping people's social connections when they use certain sharing apps or send links in e-mail. The idea is to let advertisers note people who've expressed interest in a product (say, by viewing a dress on Macys.com) and then aim ads at that person's friends, family, or acquaintances as well. Call it automated word-of-mouth advertising. For any brand, the next customer is usually somebody who knows a current customer. "If you have a million people that went to a credit card site, then we figure out who they share with and we get seven million people," explains Gurbaksh Chahal, founder and CEO of RadiumOne, a San Francisco company that specializes in using social data to target ads.