Facebook has recently revealed its own plans for developing a new advertising system that will aim at allowing the companies to target advertising to the popular social networking web site’s users. Facebook said that more than 60 companies, including Verizon Communications, Sony Pictures Entertainment, CBS, The Coca-Cola Co., Blockbuster and others, have already signed up for using the new Facebook advertising system.

However, its targeted advertising may be illegal, according to legal experts. William McGeveran, a professor at the University of Minnesota Law School, wrote on his blog that an obscure, 100-year-old New York privacy law may make illegal Facebook's new "Social Ads" program, which inserts "endorsements" from your friends on the social-networking site.

Reportedly, New York’s statute creates both a misdemeanor and a civil cause of action for "[a]ny person whose name, portrait, picture, or voice is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained."

According to Facebook, its ads will have three parts: the first part will allow the companies to build their own pages on Facebook for connecting with the consumers they target; the second part will feature a system through which the marketing messages will be virally spread through Facebook Social Ads and the third part will allow the companies to gather insight information into the users’ activity on Facebook. Mark Zuckerberg, Facebook’s founder and CEO, said that more than 100,000 new Facebook pages would be launched.

"Social actions are powerful because they act as trusted referrals and reinforce the fact that people influence people," Zuckerberg said in a statement. "It's no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends. So we set out to use these social actions to build a new kind of ad system."

Basically, the new ad initiative only asks users in general whether they want to share information, but not whether they want their name and picture used in an ad for a product, which is what actually happens. The new ad system will combine actions taken by a users' friends, such as a purchase, review or a service, with an advertiser's message.