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Although advertisers have been speculating for a while, Facebook has officially announced that they will stop offering sponsored stories as an advertising option in early April. This decision comes after a class action lawsuit, filed in 2011, that accused Facebook of not obtaining proper consent from users prior to displaying their names and profile pictures.
Facebook putting a stop to sponsored story ads seems kind of extreme but in reality, sponsored story ads have become redundant. Social context is present on all other forms of unpublished post advertisements, so there is no reason for an advertiser to choose a sponsored story.
Sponsored stories launched nearly 3 years ago. In that time, Facebook advertising as a whole has become much stronger. Improved targeting options, creative, and placement are all working together to make Facebook a viable option for many businesses. Phasing out unnecessary ad units is a natural next step for Facebook. It is important that they encourage users to take advantage of their stronger ad units available, like unpublished links and unpublished photo posts.