By Louise Story and Brad Stone
The New York Times
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.”
Facebook executives say the people who are complaining are a marginal minority. With time, Facebook says, users will accept Beacon, which Facebook views as an extension of the type of book and movie recommendations that members routinely volunteer on their profile pages. The Beacon notices are “based on getting into the conversations that are already happening between people,” Mr. Zuckerberg said when he introduced Beacon in New York on Nov. 6.
“Whenever we innovate and create great new experiences and new features, if they are not well understood at the outset, one thing we need to do is give people an opportunity to interact with them,” said Chamath Palihapitiya, a vice president at Facebook. “After a while, they fall in love with them.”
Mr. Palihapitiya was referring to Facebook’s controversial introduction of the News Feed feature last year. More than 700,000 people protested that feature, and Mr. Zuckerberg publicly apologized for aspects of it. However, Facebook did not remove the feature, and eventually users came to like it, Mr. Palihapitiya said. He said Facebook would not add a universal opt-out to Beacon, as many members have requested.
MoveOn.org started the anti-Beacon petition on Nov. 20, and as of last night more than 50,000 Facebook users had signed it. Other groups fighting Beacon have about 10,000 members in total. Facebook, they say, should not be following them around the Web, especially without their permission.
The complaints may seem paradoxical, given that the so-called Facebook generation is known for its willingness to divulge personal details on the Internet. But even some high school and college-age users of the site, who freely write about their love lives and drunken escapades, are protesting.
“We know we don’t have a right to privacy, but there still should be a certain morality here, a certain level of what is private in our lives,” said Tricia Bushnell, a 25-year-old in Los Angeles, who has used Facebook since her college days at Bucknell. “Just because I belong to Facebook, do I now have to be careful about everything else I do on the Internet?”
Two privacy groups said this week that they were preparing to file privacy complaints about the system with the Federal Trade Commission. Among online merchants, Overstock.com has decided to stop running Facebook’s Beacon program on its site until it becomes an opt-in program. And as the MoveOn.org campaign has grown over the past week, some ad executives have poked fun at Facebook users.
“Isn’t this community getting a little hypocritical?” said Chad Stoller, director of emerging platforms at Organic, a digital advertising agency. “Now, all of a sudden, they don’t want to share something?”
Facebook users each get a home page where they can volunteer information like their age, hometown, college and religion. People can post photos and write messages on their pages and on their friends’ pages.
Under Beacon, when Facebook members purchase movie tickets on Fandango.com, for example, Facebook sends a notice about what movie they are seeing in the News Feed on all of their friends’ pages. If a user saves a recipe on Epicurious.com or rates travel venues on NYTimes.com, friends are also notified. There is an opt-out box that appears for a few seconds, but users complain that it is hard to find. Mr. Palihapitiya said Facebook is making the boxes larger and holding them on the Web pages longer.
Mr. Green of MoveOn.org said that his group would be tracking the effects of the latest changes before deciding if it would still push for a universal opt-out.
The whole purpose of Beacon is to allow advertisers to run ads next to these purchase messages. A message about someone’s purchase on Travelocity might run alongside an airline or hotel ad, for example. Mr. Zuckerberg has heralded the new ads as being like a “recommendation from a trusted friend.”
But Facebook users say they do not want to endorse products.
“Just because I use a Web site, doesn’t mean I want to tell my friends about it,” said Annie Kadala, a 23-year old student at the University of North Carolina at Chapel Hill. “Maybe I used that Web site because it was cheaper.”
Ms. Kadala found out about Beacon on Thanksgiving day when her News Feed told her that her sister had purchased the Harry Potter “Scene It?” game.
“I said, ‘Susan, did you buy me this game for Christmas?'” Ms. Kadala recalled. “I don’t want to know what people are getting me for Christmas.”
Feeling Betrayed, Facebook Users Force Site to Honor Their Privacy
By Ellen Nakashima
The Washington Post
Friday 30 November 2007
Sean Lane’s purchase was supposed to be a surprise for his wife. Then it appeared as a news headline – “Sean Lane bought 14k White Gold 1/5 ct Diamond Eternity Flower Ring from overstock.com” – last week on the social networking Web site Facebook.
Without Lane’s knowledge, the headline was visible to everyone in his online network, including 500 classmates from Columbia University and 220 other friends, co-workers and acquaintances.
And his wife.
The wraps came off his Christmas gift thanks to a new advertising feature called Beacon, which shares news of Facebook members’ online purchases with their friends. The idea, according to the company, is to allow merchants to effectively turn millions of Facebook users into a “word-of-mouth promotion” service.
Lane called it “Christmas ruined,” and more than 50,000 other users signed a petition in recent days calling on Facebook to stop broadcasting people’s transactions without their consent.
Last night, Facebook backed down and announced that the Beacon feature would no longer be active for any transaction unless users click “ok.” Beacon is a core element of Facebook’s attempt to parlay the personal and behavioral information it collects about its members into a more sophisticated advertising business, an effort to turn a user’s preferences into an endorsement with commercial value.
The merging of social networking and online advertising combines two of the most powerful forces on the Internet today, and privacy advocates say it raises issues about the way personal data are disclosed for marketing purposes.
“Sites like Facebook are revolutionizing how we communicate with each other and organize around issues together in a 21st century democracy,” said Adam Green, a spokesman for MoveOn.org, a liberal activist group that has launched the petition drive to pressure Facebook to stop broadcasting members’ purchases and using their names as endorsements without explicit permission. “The question is: Will corporate advertisers get to write the rules of the Internet or will these new social networks protect our basic rights, like privacy?”
The site, which was started in a Harvard dorm room, has become a Silicon Valley powerhouse, recently valued at $15 billion. It allows its users to share messages, photos and updates on their lives.
Facebook launched Beacon as part of a wider social advertising campaign Nov. 6, with 44 announced partners, including Overstock, Travelocity, the auction site eBay, the movie ticket site Fandango, Blockbuster and the shoe site Zappos. The Beacon feature, free to advertisers, is not restricted to commerce. A person’s high score on an online game might also be posted for friends to see.
Facebook puts a string of code called a cookie on a user’s computer, which tracks the user on Beacon partner sites. In the version that Facebook launched, a person logged into Facebook who bought, say, a movie ticket, was alerted that the Web site was sending a “story” to his profile and had a chance to opt out – both at the merchant’s site and on his own page, Facebook says.
But privacy advocates criticized the opt-out feature – a pop-up box – because it disappeared after a few seconds and said Facebook should allow users to turn off Beacon and include an “opt in” feature for those who wish to receive the service. Last night, Facebook apparently added an “opt in” feature for each transaction, which Green called “a huge step in the right direction,” but still did not include a way to shut off the service permanently.
Beacon is a key part of what Facebook founder and chief executive Mark Zuckerberg, 23, called “a completely new way of advertising online.” Sometimes, ads accompany the news feeds. The ads could contain a person’s photo.
Yesterday Facebook issued an apology on MoveOn’s Facebook page: “We’re sorry if we spoiled some of your holiday gift-giving plans.”
In a news release last night, Facebook said “we appreciate feedback from all Facebook users and made some changes to Beacon in the past day. Users now have more control over stories that get published.”
Marketers can target paid social ads on Facebook according to criteria such as age, gender, political views and taste in movies, Zuckerberg told media and ad executives at the launch, according to Online Media Daily.
“What’s unique about Facebook is it’s really turning over personal profile data to advertisers,” said Jeff Chester, executive director of the Center for Digital Democracy, a privacy advocacy group. “In essence, it’s telling advertisers, we know exactly who your targets are, what their favorite entertainment is, the books they read, the kinds of social networks they have, what their political leanings are.”
Chester’s group, along with the U.S. Public Interest Research Group, has asked the Federal Trade Commission to investigate whether Facebook and MySpace, a rival social networking site that is also targeting members for ads, are using deceptive practices to violate people’s privacy.
MoveOn has created a blog on its Facebook page for people to post comments. The wall contained more than 800 as of yesterday.
They include Tasha Valdez from Michigan, who wrote: “Oh my gosh, my cousin’s entire Christmas shopping list this week was displayed on the [Facebook News] feed. That’s so messed up. This has gotta stop!”
Beacon’s risks go beyond ruining someone’s Christmas, said Mike Rogers, editor and publisher of a gay-oriented Web site, PageOneQ. “We teach young people to be very careful about what they post and all of a sudden comes along an automated system like this. What happens if a kid is on a football team and he buys a ticket to ‘Brokeback Mountain’ [a gay-themed film]?” he said, alluding to the possibility that the youth could be outed and harassed as a result.
For Lane, spoiling his wife’s surprise was bad enough.
Within two hours after he bought the ring on Overstock.com, he received an instant message from his wife, Shannon: Who is this ring for?
What ring, he messaged back, from his laptop at work in Waltham, Mass.
She said that Facebook had just put an item on his page saying he bought a ring. It included a link to Overstock, which noted that the 51 percent discount on the ring.
Lane, 28, a technical project manager at an online printing company, was crestfallen. He had gone to lengths to keep the ring a secret, even telling Shannon he was not going to give her jewelry this year.
Lane complained to Overstock. Company spokesman Judd Bagley said this week that on Nov. 21, Overstock abandoned its Beacon feature until Facebook changes its practice so that users must volunteer if they want to participate.
“I was really disappointed because for me the whole fun of Christmas is the surprise,” said Shannon Lane, 28, who married Sean a year ago in September. “I never want to know what I’m getting.”
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Staff writer Ylan Mui contributed to this report.