Facebook May Revamp Beacon

After pressure from MoveOn and members, the social network may change a policy on sharing info on users' Web buying and activities

by Catherine Holahan

Photo composite—Austin Cornelio

In the wake of mounting criticism, Facebook executives are discussing changes to a controversial advertising tool that publicizes users' Web activities outside of the popular social network. Alterations to the recently introduced Beacon system could be announced as early as Nov. 29, BusinessWeek.com has learned.

Executives of the three-year-old company were in deep talks over proposed changes late into the afternoon on Nov. 28, according to a person familiar with the matter. At issue is the Beacon program, which alerts members' Facebook "friends" to purchases and other activities on third-party Web sites. A spokesperson for the company declined to discuss changes, reiterating an earlier statement: "Facebook is listening to feedback from its users and committed to evolving Beacon."

Too much disclosure

Critics say Beacon constitutes an invasion of privacy. They've clamored for the reversal of a feature that requires users to opt out of inclusion each time Facebook wants to send information and demanded that Facebook switch to an opt-in policy. A move to scale back Beacon may appease at least some of the more than 45,000 people who have signed a petition, begun Nov. 20 by public policy group MoveOn.org, that urged Facebook to turn off the system unless users explicitly say they want to share their actions. "It should have been an opt-in program to start out with," says Matt Flaschen, a Georgia Tech sophomore and Facebook member who signed MoveOn's petition. "If I want to go to a movie, why does everyone on my Facebook need to know about that?" Privacy groups, such as the Electronic Privacy Information Center, are planning to file a complaint about the system with the Federal Trade Commission.

Even as Facebook mollifies disgruntled users, it risks rankling some of the partners that signed on in hopes of benefiting as members broadcast their purchases—say, from Blockbuster (BBI) or eBay (EBAY)—to a circle of friends. As part of the Beacon arrangement, partners pay for what Facebook CEO and founder Mark Zuckerberg has called "trusted referrals." The idea is that Facebook users will be more apt to patronize the sites and stores their friends are using. On Nov. 6, when he announced the system, Zuckerberg called trusted referrals the "holy grail" of advertising (BusinessWeek.com, 11/07/07).

"I Feel Duped"

Many users considered it more of an unholy alliance. One member complained of a spoiled Christmas after Facebook broadcast the person's purchases on Overstock.com (OSTK), a partner site. Other users said they were creeped out after friends learned of actions they never realized were forwarded to their Facebook lists.

Several people complained they weren't given the option not to share information publicly, or that pop-up notices on partner sites were too subtle to notice. Kim Garvey, a 21-year-old junior at Chicago's DePaul University, says she found out about Beacon after friends were alerted to a restaurant review she posted on Yelp. "I didn't see the little thing that popped up, and I didn't mean to tell everyone," Garvey says."For me, that was sort of uncomfortable." She adds that she was surprised Facebook "is willing to invade people's privacy."

On Nov. 29, Facebook said it's taking those concerns on board. "Your feedback has made it clear that Beacon can be kind of confusing," Paul Janzer, a member of Facebook's customer support team, wrote in a post to the MoveOn Facebook protest group site.