Seeking to keep the peace in its popular online hangout, Facebook Inc. has overhauled a new advertising system that sparked privacy complaints by turning its users into marketing tools for other companies.
Under the changes outlined late Thursday, Facebook's 55 million users will be given greater control over whether they want to participate in a three-week-old program that circulates potentially sensitive information about their online purchases and other activities.
The concessions were made after more than 50,000 Facebook users signed an online petition blasting the system, called “Beacon,” as a galling intrusion that put the Palo Alto-based startup's pursuit of profit ahead of its members' privacy interests.
More than 40 different Web sites, including Fandango.com, Overstock.com and Blockbuster.com, had embedded Beacon in their pages to track transactions made by Facebook users.
Unless instructed otherwise, the participating sites alerted Facebook, which then notified a user's friends within the social network about items that had been bought or products that had been reviewed.
Facebook thought the marketing feeds would help its users keep their friends better informed about their interests while also serving as “trusted referrals” that would help drive more sales to the sites using the Beacon system.
But thousands of Facebook users viewed the Beacon referrals as a betrayal of trust. Critics blasted the advertising tool as an unwelcome nuisance with flimsy privacy protections that had already exasperated and embarrassed some users.
Some users have already complained about inadvertently finding out about gifts bought for them for Christmas and Hanukkah after Beacon shared information from Overstock.com. Other users say they were unnerved when they discovered their friends had found out what movies they were watching through purchases made on Fandango.
The backlash against Beacon illustrated the delicate balancing act that Facebook must negotiate as the company tries to cash in on its popularity without alienating the users fuelling its success.
Beacon is a key component in Facebook's “Social Ads” program, which is vying to make more money from the rapidly growing audience that uses the social network's free services as a place to flirt, gossip and share personal passions.
This isn't the first time that Facebook has done an about-face after introducing a feature that raised privacy concerns.
Reprinted with content from Globe and Mail, Online, November 30th, 2007
Kensel Tracy is a Marketing Coach who provides coaching to small, medium and large size business organizations and executives.
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