zuckerberg-f8Facebook will give U.S. small business owners up to $10 million in free Facebook advertising, the company announced today, saying it is working with the U.S. Chamber of Commerce and the National Federation of Independent Business to provide the ads.

The stated goal of the program is to help “invest, educate, and connect” with small businesses by giving 200,000 companies $50 each in ad credits. The company wants to show businesses how Facebook advertising works and how it can help their businesses if they spend more ad dollars targeting social networkers. Facebook also wants to pull ad spending from the likes of Google, Bing and Yahoo.

The program to give businesses free ad credits starts in January 2012. Until that time, Facebook, NFIB and the U.S. Chamber said they will provide businesses with webinars, tips and case studies that show how to reach new customers using Facebook.

Facebook uses the example of Minneapolis-based CM Photographics as a star small business that used Facebook ads to generate greater revenues. Facebook claims the small company generated about $40,000 in revenue from $600 spent on Facebook ads.

Facebook made a lot of headlines last week as it introduced several major changes to its service, including Timelines, which are re-imagined user profiles that show years of activity on Facebook. No doubt the changes were also partially focused on making it easier for advertisers to better connect with Facebook’s more than 750 million users.

What do you think of Facebook’s initiative to offer free ads to small businesses? Do you think small companies will spend money on Facebook ads?