It has taken two years and a lawsuit, to end the Facebook Beacon controversy. Now the social networking giant is finally turning off the ads. More on the story. The application launched in 2007 tracked the activities of Facebook users on 42 partner Web sites and then revealed those activities users’ friends unless they turned such notification off. More on the story here: Daily Mail

Today in the world of privacy…..after the jump.

Laptop searches at airports infrequent, DHS privacy report says. Computerworld

More on the story….DHS privacy report downplays laptop searches. InternetNews

Strange, but true….Alcohol-sniffing anklet saves money but stirs privacy fears. Washington Post

Medical Data in the Internet “Cloud” – Data Privacy. The Health Care Blog

Med Students on Twitter, Facebook: No Patient Privacy? Privacy Digest

New “Irresponsible” Netflix Contest May Violate Customer Privacy. PC World

Location tracking on cell phones raises privacy concerns. Mercury News

The Facebook Beacon controversy raged on for a long time, certainly from the perspective of users. You can see more about it in the video report below.

Video Link

Facebook Beacon Controversy Update: Ads to Be Shut Off to Settle Lawsuit

Your digital shadow has a life of its own. Literally.

The digital universe — the pile of digital information that includes everything from e-mail to YouTube videos — is growing faster than previously thought, according to a new study from the research firm IDC.

IDC now estimates that, at 281 exabytes, the digital universe in 2007 was 10 percent larger than the firm had projected a year ago. And the world’s assemblage of all things digital will grow at a compound yearly rate of 59 percent through 2011. That adds up to a tenfold jump over five years, to 1,800 exabytes. (Not that there is any real way to visualize it, but an exabyte — a billion gigabytes — is said to be 50,000 times larger than a digitized Library of Congress.)

Big numbers, sure, but not too surprising. Recent estimates of the growth of Internet traffic, for example, range from 50 to 100 percent a year.

But the intriguing finding was that all the ambient digital information about you — a person’s “digital shadow,” IDC calls it — now exceeds the digital information that you generate yourself by sending an e-mail, taking digital pictures, viewing a YouTube video, and so on.

Visit the EMC Web site to find this “digital shadow” study . The company has created a software application, the Personal Digital Footprint Calculator, which you can download and use to answer the question, “How fast is your digital universe expanding?” Equally fascinating — disturbing perhaps — is the Worldwide Information Growth Ticker.

In this video, John Gantz, Chief Research Officer, IDC discusses the study.

Dan Schawbel discussed the implications of the digital shadow for companies and others seeking to establish their brand. As with individuals, a company’s brand is, likewise, out of its hands.

The search engine Ask.com is making a proactive move.

Ask.com will unveil on Tuesday a “privacy switch” that lets users completely erase their search queries and related data from the search engine’s servers.

The new feature, dubbed AskEraser, is believed to mark the first time that Internet users have been given control over whether their information is retained by a search engine. Company officials and privacy advocates hope the ” privacy switch” will pressure other Internet companies to follow suit.

“Anywhere that you log into, anywhere where you put in personalized information, there should be a way – an easy way – to control how that information is used and retained,” said

Doug Leeds, senior vice president at Ask.com, a unit of IAC/InterActive Corp. (IACI). “We are giving users the ability themselves to take control of their privacy.”

Ari Schwartz, deputy director of the public-policy group Center for Democracy and Technology, said he hoped AskEraser would force other search engines to respond. “As you start giving users more control on certain sites, we hope that sites pressure each other (to implement) privacy control as a competitive tool,” he said. But it wasn’t immediately clear whether AskEraser will reset the parameters of the ongoing debate over online privacy, given that usage of Ask.com continues to lag far behind that of its rivals. Ask.com accounted for just 2.9% of the U.S. search market in October behind Google Inc. (GOOG), Yahoo Inc. (YHOO), Microsoft Corp. (MSFT) and Time Warner Inc.’s (TWX) AOL, according to research group Nielsen Online.More importantly, data that Ask.com erases will be first sent to Google, which recently signed a five-year contract to serve ads alongside Ask.com search results. Google is under no apparent obligation to erase any information it receives from Ask.com, even in cases in which the user switched on the AskEraser function.

The article continues. The New York Times poses the question, will privacy sell?

Ask.com is betting it will. The fourth-largest search engine company will begin a service today called AskEraser, which allows users to make their searches more private.

Ask.com and other major search engines like Google, Yahoo and Microsoft typically keep track of search terms typed by users and link them to a computer’s Internet address, and sometimes to the user. However, when AskEraser is turned on, Ask.com discards all that information, the company said.

Ask, a unit of IAC/InterActiveCorp based in Oakland, hopes that the privacy protection will differentiate it from more prominent search engines like Google. The service will be conspicuously displayed on Ask.com’s main search page, as well as on the pages of the company’s specialized services for finding videos, images, news and blogs. Unlike typical online privacy controls that can be difficult for average users to find or modify, people will be able to turn AskEraser on or off with a single click.

“It works like a light switch,” said Doug Leeds, senior vice president for product management at Ask.com. Mr. Leeds said the service would be a selling point with consumers who were particularly alert about protecting their privacy.

[...]

Some privacy experts doubt that concerns about privacy are significant enough to turn a feature like AskEraser into a major selling point for Ask.com. The search engine accounted for 4.7 percent of all searches conducted in the United States in October, according to comScore, which ranks Internet traffic. By comparison, Google accounted for 58.5 percent, Yahoo for 22.9 percent and Microsoft for 9.7 percent.

“My gut tells me that basically it is not going to be a competitive advantage,” said Larry Ponemon, chairman and founder of the Ponemon Institute, an independent research company “I think people will look at it and see it as a cool thing, and they may use it. But I don’t think it will be a market differentiator.”

Mr. Ponemon said many surveys showed that while about three in four Americans said they were concerned about privacy, their concern was not sufficient to make them change their behavior toward sharing personal information. About 8 percent of Americans were concerned enough about privacy to routinely take steps to protect it, the surveys showed.

“Privacy only becomes important to the average consumer when something blows up,” Mr. Ponemon said.

Of course, something has already blown up. Last year, AOL released the queries conducted by more than 650,000 Americans over three months to foster academic research. While the queries where associated only with a number, rather than a computer’s address, reporters for The New York Times and others were quickly able to identify some of the people who had done the queries. The queries released by AOL included searches for deeply private things like “depression and medical leave” and “fear that spouse contemplating cheating.”

The article continues discussing such privacy violations.

Facebook CEO Mark Zuckerberg made a public apology and stated that Facebook has made provisions to allow its members to turn the ads off.

Today, finally, Zuckerberg did what critics — including MoveOn.org, which took an early stand in the case — had been demanding: he allowed people to turn Beacon off. He also made clear that when members do turn off the system, Facebook will not store information about your surfing habits that it receives from its ad partners.

As originally conceived, Beacon was a particularly egregious scheme for invading your privacy. Dozens of sites had contracted with Facebook to send people’s surfing data to the social network; your profile would send out little messages to your friends about what you were doing on those sites — telling them that you were shopping on Overstock.com, say, or were cooking certain recipes at Epicurious — as a kind of ad for those sites.

Not only did Facebook not allow people to turn off the system, it also assumed that if you did not explicitly prohibit it from sending messages out from each site in its ad network, you were granting permission. In other words, Beacon was devised as an opt-out plan — or, more precisely, it was plead-out, because getting the system to stop sending messages on your behalf involved a torturous number of steps.

Responding to the critics, last week Facebook fixed the system a bit, making the plan opt-in.

As the LA Times notes.

Zuckerberg’s rollout of Beacon, an online tool that tracks the purchases and activities of its users on dozens of websites, marked his first major stumble since becoming Silicon Valley’s newest golden boy.

The Facebook flap comes amid growing concern about the increasingly sophisticated technology used to track online activities in an effort to more precisely target advertising.

Consumer and privacy watchdogs say Facebook and other social networking sites have not been forthcoming enough about how much user information they harvest and what they do with it. They pledged to continue to press regulators in the United States and abroad to develop guidelines to protect online privacy, particularly of teens.

“Young people are pouring their hearts out, living their lives and interacting with all of their friends on these sites,” said Kathryn Montgomery, a professor of communication at American University. “The more we live our lives online, the more we need to have a set of rules of how businesses operate there.”

This unfolding episode has also created discomfort for potential companies who had made plans to advertise on Facebook, as the LA Times article goes on to point out:

The opposition to Beacon also prompted concern among some marketers. Anticipating the privacy issues, EBay Inc. decided to let online auctioneers alert their friends about items they are selling through Beacon starting next year, but only if users give explicit permission.

“Brands have become skittish in deploying advertising and marketing initiatives with this level of negative press and user privacy concerns,” said Jeremiah Owyang, a senior analyst with Forrester Research.

Overstock.com Inc., which received a handful of customer complaints, pulled out of the Beacon program last month and won’t turn it back on until more Facebook users are happy with how it works.

“We need to wait and see what the Facebook community reaction is,” said Jonathan Johnson, the online retailer’s senior vice president of corporate affairs.

Facebook’s future depends on the goodwill of its users, said Nick O’Neill, who writes the AllFacebook.com blog.

“Facebook has die-hard fans, and it needs to keep those people,” he said. “They are the ones doing the job of marketing and turning Facebook into one of the most hyped products out there right now.”

As the story unfolds, we are reminded of the vast extent to which social networking and the relinquishment of privacy it entails is an uncharted territory of human interaction.

CA’s recent research has uncovered the troubling extent to which Facebook tracks its members, even after they have logged out.

Amid heightened concerns surrounding Facebook’s new advertising platform, the social networking site has given users a new reason not to trust it: Researchers recently busted the company for tracking users activities on external sites, even after they logged out of Facebook.

“Facebook is retrieving enough information that they can tie what you do on external sites back to your Facebook profile,” says Stefan Berteau, a research engineer with CA. “[The company] says it’s deleting the data it gathers after you’ve logged out, but that is not clearly spelled out in its privacy policy, and there isn’t a binding public commitment.”

Keep reading for more details on Facebook’s tracking of online usage and for ways to block this tracking. The Consumerist also offers tips to help you stop Facebook from tracking you.

In the aftermath of the revelation of Facebook’s extreme – and perhaps unprecedented – privacy violations in the proposed Beacon ads network that garners members’ unwitting participation in advertising products and services, Facebook has a difficult challenge. Not just Facebook members and privacy advocates, but even potential advertisers in Facebook’s Beacon ads are skittish.

It only took a few weeks for Facebook to squander the good will of its users on a poorly planned advertising platform. Now Facebook has also reportedly blown it with a few key advertisers, including Overstock.com, Coca Cola and Travelocity.

The situation is up in the air with Coca Cola and Travelocity, as some late minute updates to Betsy Schiffman’s original report indicate. TechCrunch’s Erick Schonfeld also notes advertisers’ reluctance.as well as the changes Facebook has said it will enact to address privacy concerns.

The backlash against Facebook’s Beacon advertising program just gets worse every day. First, advertising partner Coca-Cola got cold feet over privacy issues. Now Overstock is bailing from the program, and Travelocity is having doubts. What’s more, all of this lack of confidence from the major advertising partners Facebook launched with is coming after it revised its policy to make Beacon opt-in instead of opt-out.

Beacon is a social form of advertising that shares your purchases or other actions you take on an advertiser’s site with all your friends on Facebook through their News Feeds. What has privacy advocates up in arms, and advertisers skittish, about Beacon is the way it seems to be spying on you as you surf the Web and then, on top of that, reporting what you just did to everyone you know.

[...]

According to one security engineer’s analysis, Beacon partners transmit data to Facebook in bulk about members who visit their site. This is true even for those who opt out of Beacon by clicking on “No Thanks” when asked if the data can be shared with Facebook. The data is sent anyway. Facebook clarifies that it does not do anything with this opted-out data, and in fact deletes it from its servers. But the deletion occurs on Facebook’s servers, not the advertisers’. [Update: It gets even worse. Beacon partners are sending data indiscriminately about every single visitor to their sites back to Facebook, whether or not those people are even Facebook members. This includes very detailed user behavior. Again, Facebook says it deletes most of this data. But what are the partner sites thinking? They might as well be giving Facebook access to their bank accounts.]

Yes, debacle indeed. Facebook tries desperately to retool Beacon ads and in so doing, keeps garnering the much-needed scrutiny and skepticism. Can restraints and security measures that protect Facebook members’ privacy be enacted? Jennifer LeClaire discusses the research that reveals just how extensive the privacy violations really are.

Researchers are claiming Facebook’s Beacon online ad system is even more intrusive when it comes to privacy matters than protesters against the technology might have thought initially.

On Friday, Stefan Berteau, a senior research engineer at Computer Associates’ Threat Research Group, published findings that reveal Beacon reports member activities on third-party partner sites even if Facebook users are not logged in, and even if members have declined to opt in to the Beacon program.

“It can happen completely without their knowledge,” Berteau said in his report. “The bottom line is that Facebook is materially misrepresenting the privacy impact of their Beacon program, and presenting users with the appearance of control over their information when in fact they have almost none.”

A detailed report and analysis is on the CA Security Advisor Research blog.

No doubt, Facebook never anticipated such an uproar.

Faced with its second mass protest by members in its short life span, Facebook, the enormously popular social networking Web site, is reining in some aspects of a controversial new advertising program.

Within the last 10 days, more than 50,000 Facebook members have signed a petition objecting to the new program, which sends messages to users’ friends about what they are buying on Web sites like Travelocity.com, TheKnot.com and Fandango. The members want to be able to opt out of the program completely with one click, but Facebook won’t let them.

Late yesterday the company made an important change, saying that it would not send messages about users’ Internet activities without getting explicit approval each time.

MoveOn.org Civic Action, the political group that set up the online petition, said the move was a positive one.

“Before, if you ignored their warning, they assumed they had your permission” to share information, said Adam Green, a spokesman for the group. “If Facebook were to implement a policy whereby no private purchases on other Web sites were displayed publicly on Facebook without a user’s explicit permission, that would be a step in the right direction.”

Facebook, which is run by Mark Zuckerberg, 23, who created it while an undergraduate at Harvard, has built a highly successful service that is free to its more than 50 million active members. But now the company is trying to figure out how to translate this popularity into profit. Like so many Internet ventures, it is counting heavily on advertising revenue.

The system Facebook introduced this month, called Beacon, is viewed as an important test of online tracking, a popular advertising tactic that usually takes place behind the scenes, where consumers do not notice it. Companies like Google, AOL and Microsoft routinely track where people are going online and send them ads based on the sites they have visited and the searches they have conducted.

But Facebook is taking a far more transparent and personal approach, sending news alerts to users’ friends about the goods and services they buy and view online.

Charlene Li, an analyst at Forrester Research, said she was surprised to find that her purchase of a table on Overstock.com was added to her News Feed, a Facebook feature that broadcasts users’ activities to their friends on the site. She says she did not see an opt-out box.

“Beacon crosses the line to being Big Brother,” she said, “It’s a very, very thin line.”

The article continues.

BusinessWeek’s Catherine Holahan reported earlier on the proposed changes and discussed Facebook’s dilemma:

Any move that weakens Beacon’s appeal to advertisers leaves Facebook under pressure to find other ways to lure marketers and justify the lofty $15 billion valuation bestowed by Microsoft (MSFT) in October, when it purchased a 1.6% stake for $240 million (BusinessWeek.com, 10/25/07). Users of social networks are typically less responsive to standard ad formats, such as the posterlike banner ads commonly seen on the Web, than to newer, more interactive or personalized advertisements. Some marketers say that when they place banner ads on Facebook, the so-called click-through rate, a measure of user responsiveness, is one-fifth the rate for the larger Web.

But many Facebook users insist that they, not marketers, should set the terms of how, and how much of, their information is shared for advertising purposes. Some threatened to move to other social networks or start their own blogs if Facebook takes that decision out of their hands. “I will set up my own blog,” says Flaschen. “It is a little less convenient, but if [Facebook] can’t understand the privacy implications of what they are doing then it’s not worth it.”

While the revamping is encouraging, as Vindu Goel points out, this is a scenario which should never have arisen.

But more troubling is what appears to be Facebook’s emerging business strategy: trample on people’s privacy in the name of enhancing the service, wait for people to scream, then apologize and back off. The company did this when it first launched the news feed feature, which initially had few controls over who could see it. And it’s done it again with Beacon.

Essentially, Facebook is trying to see how much bad behavior it can get away with. That’s not how any company should treat its “friends.”

It certainly belies the original purpose of Facebook which was an online gathering place for friends, with membership restrictions which set it apart from the more public MySpace . How willingly Facebook members themselves choose to surrender privacy — albeit, at times, with lack of foresight and good judgment – is one thing, but to have one’s online life involuntarily serving commercial aims is not acceptable.

Facebook may have overestimated how acceptable their new Beacon ads would be for members. But it is one thing for members to decide voluntarily to reveal private, personal information and yet something else for Facebook to enable the commercial exploitation of such information. David Utter reports on the backlash:

One-time online darlings in social networking have begun to feel the dizzying dehydration of the morning after a really great party. Pushback from several quarters may leave the typical past college age person questioning the sanity of being on such sites.

Facebook has been in a running battle recently with activist group MoveOn.org over use of the Facebook Beacon. That feature of Facebook posts a note to one’s online profile whenever the individual makes an online purchase at a merchant participating in Beacon.

MoveOn accused Facebook of originally planning to permit people to permanently opt-out of Beacon, but removed that function at the last minute.

“Facebook should explain why they chose at the last minute to put the wish lists of corporate advertisers ahead of the privacy interests of their users,” said MoveOn’s Adam Green.

The article continues. Vindu Goel poses the question: is this business as usual or a disaster that Facebook has on its hands.

Is your life an open book if you use Facebook? It sure seems like it. It’s giving me the heebie-jeebies. I’m working on a column about the topic, and I’d love to know what you think, either via blog comment or email.

The current uproar is over Facebook’s new Beacon application, which gives online retailers the power to tell all you Facebook friends what you just bought through your News Feed. Some of the sites give buyers a short time window to opt out of the information sharing, but users have complained the opt-out feature is barely noticeable.

Liberal activist group MoveOn.org is leading a protest on Facebook against Beacon, and members of the protest group topped 20,000 as of Sunday. (For a good analysis of all the issues, check out Josh Catone’s excellent post at Read/WriteWeb.)

Facebook’s response so far is troubling. Basically, the company says sharing information with your “friends” isn’t broadcasting it to the world, so it’s not really an invasion of privacy.

The article continues. Clearly the exposure the Facebook Beacon ads are receiving is not what the company and its advertisers had hoped for.

Facebook’s Beacon ads have drawn objections and concerns from many circles, including privacy and consumer rights groups, legal experts and Facebook members. Now the grassroots political group, MoveOn.org is protesting.

MoveOn.org is turning its organizing prowess on one of the very tools it uses for its mobilizing efforts. The liberal group’s Civic Action division mounted an effort today against Facebook’s Beacon advertising feature, claiming it infringes user privacy and “sullies” social networking communities.

MoveOn is objecting to a new advertising technique that Facebook announced a few weeks ago that posts members’ purchases and activities on other websites in their Facebook profiles. Users can choose not to have the information posted from individual sites, or “opt out,” whereas with most Facebook applications associated with external sites, users must proactively choose to participate, or “opt in.” With the Beacon feature, if a user does not specifically decline participation, his or her Facebook friends will get a “news feed” notice about the purchase.

In an approach not that unusual on the social networking site, MoveOn has created a Facebook group to protest against Facebook, complete with link to MoveOn’s petition encouraging Facebook to “respect privacy.”

MoveOn is not anti-Facebook. Adam Green, a spokesman for MoveOn Civic Action, said his group is trying to “preserve the integrity” of the site.

“Facebook and similar sites have the potential to really revolutionize how we speak to each other in our society,” Mr. Green said. “When people see their privacy violated, it sullies the entire thing.”

He said MoveOn is worried people will abandon Facebook out of privacy concerns.

However, Chris Kelly, Facebook’s chief privacy officer, said MoveOn is “misstating the way this process works.”
He said the purchase appears only in the news feeds of confirmed friends and on the individual’s profile (users have control over who can see their profiles), not to the “world.” Mr. Kelly also pointed out that two ways to opt out, at the point of purchase on the external Web site, via a box that pops up, but fades away in under a minute and the next time they sign into their accounts. If users ignore the notification, the purchase information will be displayed, but nothing happens until the user signs in.

These issues are discussed in this brief CNN report.



As CNET News.com’s Caroline McCarthy points out, companies who use the new Facebook Beacon ads are not unaware of privacy concerns.

Some retailers participating in Beacon say they’re familiar with its potential pratfalls, but insist that it will ultimately be a positive development. “I think it’s a new technology, and until people get used to it, it might surprise some,” said Josh Mohrer, director of retail for BustedTees.com. “We have had a few instances where people were surprised, not necessarily angry, but surprised that their purchase showed up on their Facebook feed…I think when it becomes ubiquitous, which it most certainly will as Facebook things tend to be, that people will get used to it and see it as a good thing.”

Mohrer said that he saw where the complaints were coming from. “I think Facebook probably needs to do a better job of warning people about it,” he said. “What’s bad is that people are probably going to blame the merchant and not Facebook.”

Additionally, Mohrer admitted that he doesn’t entirely disagree with the concerns of activists who have pointed out potential privacy issues with Beacon. “You should have an option to turn it on,” Mohrer added, “not the other way around, especially around this time of year.”

Despite privacy concerns, some companies anticipate ultimate success with Facebook Beacon Ads. As Prabhala Ranga Sai of TMCnet points out, eBay and Travelocity have major plans.

It seems eBay is planning to use Beacon so that eBay.com sellers will be able to choose to include their eBay listings in their Facebook News Feeds. This opens up a huge market sans geographical boundaries for the businesses. When it happens, eBay.com sellers would be able to drive potential bidders and buyers to their listings. eBay expects to make the feature available to sellers on eBay.com in early 2008.

“Beacon offers an interesting new way for us to deliver on our goal of bringing more bidders and buyers to our sellers’ listings,” said Gary Briggs, senior vice president and chief marketing officer, eBay North America. “In a marketplace where trust and reputation are crucial to success, giving sellers the ability to easily alert their network of friends – the people who already know and trust them – to an item for sale has the potential to be a powerful tool.”

Travelocity implementing Facebook Beacon on its website is an example of one the many success stories of Beacon. When Facebook users book travel on Travelocity, they can choose to share that information with their friends on Facebook.

“Travel is naturally a social activity that travelers enjoy discussing with the people they know,” said Jeff Glueck, chief marketing officer at Travelocity. “Using Beacon, Travelocity users can now easily choose to spread the news of their latest vacation plans on Facebook as a complement to their activities on the Travelocity website.”

It remains to be seen if Facebook members will “cooperate” and “comply.”

Privacy groups are voicing concerns.

Two consumer advocacy groups have asked the Federal Trade Commission to investigate whether new advertising initiatives announced last week by social networking sites MySpace and Facebook adequately protect consumer privacy.

In a Nov. 12 letter to FTC Chairman Deborah Platt Majoras, the Center for Digital Democracy and the U.S. Public Interest Research Group claimed that the “ambitious new targeted advertising schemes” launched by MySpace.com and Facebook Inc. “make clear the advertising industry’s intentions to move full-speed ahead without regard to ensuring consumers are protected.”

Jeffrey Chester, founder and executive director of the Center for Digital Democracy, said that by launching the advertising plans, MySpace and Facebook are “thumbing their noses at the FTC and consumer privacy rights” by allowing marketers to customize advertisements based on data provided by users in their profiles on the social networking sites.

“MySpace and Facebook are like the digital data equivalent of Fort Knox for Madison Avenue marketers,” he said. “It is a kind of one-stop data shop for marketers. They know your interests, your politics and what movies you like. It is a much more rich array of content that marketers simply should not have automatic access to.”

Chester said that consumers must be offered a complete opt-out option, and that the social networks must fully disclose how they intend to use their personal information.