Facebook backs off (at least a bit) on violation of users privacy. Interestinlgy enough, the CEO chose to comment on this development in a Facebook BLOG. Below is an exercpt fm a WSJ of Dec 6th, which also discusses the possible ramifications on the valuation of the company (recently estimated at 15 billion when MS acquired a 1.6% stake) and on the satisfaction of target-advertisers:
"In a Facebook blog, Mr. Zuckerberg yesterday wrote, "We've made a lot of mistakes building this feature, but we've made even more with how we've handled them. We simply did a bad job with this release, and I apologize for it." He added that Facebook users can now adjust their privacy settings to opt out of the Beacon program entirely.
Before the change announced yesterday, it would take as many as four clicks on settings to stop Facebook from sharing information. Beacon critics said it should be easier to opt out.
Beacon's success is crucial for Facebook, of Palo Alto, Calif. Third-party sites, working in conjunction with Facebook, use Beacon at no cost. Facebook benefits because, when a Facebook user shares information with his friends, Facebook can use that information to learn about the individual and send him targeted ads.
Advertisers typically pay a premium for targeted ads that reach users who are likely to be most interested in their product or service. That is key to Facebook's effort to increase its revenue, which will be slightly more than $150 million this year, according to people familiar with the matter.
Facebook is trying to raise as much as $200 million in the next few months, on top of the $300 million it has raised in a round of funding that values it at $15 billion. Potential investors will likely look closely at Beacon's prospects in determining Facebook's value. Last week, Hong Kong billionaire Li Ka-shing closed a deal to acquire a 0.4% stake in the site for $60 million.
Overstock.com Inc., a Facebook partner, stopped using Beacon late last month because it wasn't satisfied with the way Facebook handled the program's start. The online retailer, based in Salt Lake City, says it doesn't plan to start using Beacon again until it knows Facebook users are happy with it.
"It's off, and it will stay off until we're satisfied that Facebook has better explained to its users what's going on," says Jonathan Johnson, Overstock's senior vice president for corporate affairs and legal.
Criticism over Beacon surged late last month, when MoveOn.org Civic Action formed its group to protest. The group represents a little more than 0.1% of Facebook's 57 million active users but has been highly vocal and has attracted considerable blog and media coverage. The number of people in MoveOn.org's group is also significant compared with the number of users who have encountered Beacon, which is in the "low six figures," according to Facebook.
Adam Green, a spokesman for MoveOn.org Civic Action, said his organization is satisfied with Facebook's changes. "Facebook's policy change is a big step in the right direction, and we hope it begins an industrywide trend that puts the basic rights of Internet users ahead of the wish lists of corporate advertisers," he said.
1 comment:
Beacon clearly needs some work before it will be embraced by Facebook users. What I don't understand is how an advertising feature based on purchase behavior will be adopted when there is no clear value proposition for the user, or when that value proposition is so specific to each purchase, how an automatic function can be useful without very specific tools. At the same time, does the clear necessity for more customizable tools make the function simply too complicated to be fun or more laborious than useful?
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