What is the difference between an ad and abusing somebody who is in a weak position? There is a difference and targeted ads are dancing on that line, if you don't see this you should read on how people get recruited to sects. They don't advertise, they target people who can be easily be taken advantage of based on their behavior or emotions. I'm not saying it's wrong but there should be a limit on how and what can you target with ads or at least be transparent about it. "We have classified you as depressed" and see if users are happy about it.

I think the difficulty in thinking about Facebook is that it sits in this strange middle ground, between targeted advertising (as it has traditionally been thought of) and direct selling of data.

If you think about it on a spectrum, where traditional advertising lets you do some crude targeting (If I advertise on American's Next Top Model, I'll get a different audience than if I advertise in the Wall Street Journal) that lets audiences opting in and out based on individual choice (I don't have to watch America's Next Top Model, even if I have all the characteristics of an ideal viewer). No data is sold here.

At the other end are people who sell leads - usually for B2B customers (here's the names and contact info for 500 IT Directors). Data is explicitly being sold here.

Facebook sits somewhere in the middle which is why we don't quite know how to talk about it. We can target things like traditional advertising, but we are now also able to get explicit information on our targets, in a way that hasn't really been done before.

How are you so sure of that? Not saying your wrong but you seem very convinced of your own position. I have no idea what exactly they do with my data.