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.