Facebook Dims the Beacon Spotlight

The social network gives in to complaints, granting users greater control over a system that shares information about Web activity

Facebook made modifications to a controversial advertising system that many users considered an invasion of privacy. On Nov. 29, the social network gave users greater control over the tool, known as Beacon, which broadcasts what they do on partner sites to other Facebook users.

As a result of Facebook's changes, users must first give their permission before information is shared. "No stories will be published without users proactively consenting," Facebook said in a statement sent to media outlets late on Nov. 29.

Facebook's changes were tentatively hailed as a victory by MoveOn, the public policy group that organized a petition to convert Beacon to an "opt-in" system. More than 50,000 Facebook members had signed the nine-day-old Web document by Nov 29. "Switching from opt-out to opt-in is really a huge step," says Adam Green, a spokesman for MoveOn, adding that he is waiting to see the system in action before making a final judgment. "If it is true…that would be a huge victory for regular Internet users who banded together."

User Information Quandary

The Beacon brouhaha underscores the dilemma faced by social networks and other Internet companies such as Google (GOOG) attempting to generate revenue from the wealth of information they collect about users. Letting advertisers capitalize on such information helps Web companies collect sales and grow. But sharing too much data can result in the kind of backlash encountered by Facebook.

Members of the social network will now have to click "OK" in a notification window before information, such as purchase history, is sent from a Facebook partner site to the user's contact list. If the user does not respond to the notification, it will disappear without publishing the information. "Users will have clear options in ongoing notifications to either delete or publish," Facebook said.

Initially, Beacon automatically published information from Facebook partner sites unless a user rejected the request. The system angered many users who argued that, on principle, Facebook was overstepping its bounds by publishing anything without express consent (BusinessWeek.com, 11/28/07).

Heads-up, MySpace

Some users said they did not always see, or pay attention to, the notifications and, as a result, unwittingly shared information they would have preferred remain private. Some users reported their Christmas gift-giving plans were spoiled after friends and family members on Facebook were alerted to purchases on Facebook partner sites.

MoveOn's Green says he hopes other social networks that have similar information publishing feeds, such as News Corp.'s (NWS) MySpace, will take note. "We definitely hope that the move from opt-out to opt-in has a ripple effect throughout the industry," says Green. "It is absolutely unacceptable to display private information publicly."

Before it's here, it's on the Bloomberg Terminal.