Thanks to theKbuzz for a great piece on Status Plug, an “ad network for Facebook,” which is, incidentally, not affiliated in any way or endorsed by Facebook. That’s a good foreshadowing to the whole tale, truly.
We’ll let theKbuzz explain:
The basic premise is that advertisers pay Status Plug to distribute ads through its network of Facebook Public Profiles, and shares the revenue with the admins of those Public Profiles. Ads then get served up to fans of those public profiles in the form of status updates - ie “video, audio, images, text and links”.
The problem with this, as you may already be sensing, is that Status Plug is toeing some major unethical lines. As theKbuzz points out,
6 of the 9 Pages currently listed on their Page directory are American cities, and unofficial Pages. The other 3 are also unofficial Pages. These unofficial Facebook Pages definitely violate Facebook’s Terms of Service…. So advertisers in effect are paying for entrance onto unofficial pages posing as official ones, that could be taken down at any point.
Moreover, if Status Plug advertisers do not disclose that the updates provided on the Facebook Pages are paid sponsor messages, then Status Plug and its clients are violating WOMMA’s ethics code (http://womma.org/ethicscode).
We encourage you to read theKbuzz’s full post, linked below.

The full story at Buzz Marketing Daily:
http://www.buzzmarketingdaily.com/2009/04/status-plug-ad-network-for-facebook.html