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Considering their primary source of revenue[1] is from advertising, I wouldn't think Google would disallow or block ads from Facebook (or anyone with a competing product, to be honest...)

[1] AdWords - Wikipedia - http://en.wikipedia.org/wiki/AdWords

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I think Facebook's primary source of revenue is advertising too.

Facebook is taking the stance what Microsoft took a few years ago - getting in the way of it's users and making choices on behalf of them.

On the other hand by being open, Google has made a ton of money from it's competitors like Groupon which spends a big chunk advertising on Google.

I don't know if Facebook has made an official comment on this but from here on I think things might get interesting.

Facebooks primary revenue source also is advertizing. And they generally do not seem opposed to other sites (competing with them for users) linking to them (they've littered half the net with their like buttons), only vice versa.

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