December 1st, 2007

Facebook adjusts ad platform after privacy protest

Agence France-Presse

Facebook has changed its three-week-old advertising platform to soothe members outraged by what they saw as an assault on their privacy at the popular social networking website.

Facebook said Friday that members will only be fodder for the ad platform, referred to as Beacon, if they “opt-in” as opposed to the original format that automatically included them unless they took the effort to “opt-out.”

Beacon lets “partners” track Facebook members’ visits to their websites and relay messages letting users’ friends in the social networking community know what they bought in a tactic referred to as “trusted referral” advertising.

“I saw my (girlfriend) bought an item I had been saying I wanted ... so now part of my Christmas gift has been ruined,” Matthew Helfgott wrote in a posting in an online forum lambasting Facebook’s advertising system.

“Facebook is ruining Christmas!”

Internet civic and political action group Moveon.org said that 55,000 of Facebook’s 50 million members have electronically signed a petition titled “Facebook: Stop invading my privacy.”

The petition calls for Facebook not to spread word of what members buy to their friends without explicit permission.

“We appreciate feedback from all Facebook users and made some changes to Beacon,” the Northern California-based firm said in a written release.

Facebook members now get a notification asking them to click on an “OK” icon if they want stories about their activities at advertisers’ websites to be sent to friends via automated news feeds.

If members do nothing with the notices, no stories are sent, according to Facebook, which acts as intermediary between advertisers and members. Facebook is adamant it does not share users’ data with advertisers.

“Sites like Facebook are revolutionizing how we communicate with each other and organize around issues together in a 21st century democracy,” said Moveon.org Civic Action spokesman Adam Green.

“Will corporate advertisers get to write the rules of the Internet or will these new social networks protect our basic rights, like privacy? We hope Facebook’s decision sets an important precedent for Internet user’s rights.”

Facebook launched Beacon in early November in a move awaited by analysts wondering how Facebook will cash in on its booming popularity and capitalize on its ad-delivery alliance with US technology giant Microsoft.

Microsoft paid 240 million dollars for a 1.6 percent stake in Facebook in October, giving the young company a theoretical value of 15 billion dollars.

That valuation is considered too high, given that Facebook is estimated to have earned just 150 million dollars a year prior to the new advertising platform’s launch.

Facebook was founded by Mark Zuckerberg in 2004 while he was a Harvard University student.

Facebook partners in the ad program include Overstock.com, Coca-Cola, Microsoft, Sony Pictures Television, and Blockbuster.

Zuckerberg, 23, billed Facebook Ads as a way to target ads at members in a “referral” manner mirroring the social nature of the website.

While unveiling the ad program, Zuckerberg said it created “an interface to gather insights into people’s activity on Facebook that marketers care about.”

“It’s no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends,” he added. “So we set out to use these social actions to build a new kind of ad system.”

Internet privacy advocates say that using social networking profiles to target ads is a betrayal of trust that members should be wary of, and protest against.

“Targeting ads on social networking sites raises a red flag,” says Electronic Privacy Information Center senior counsel Mellissa Ngo.

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