Facebook Beacon either is pure marketing genius or yet another form of online privacy intrusion that needs to be stamped out. It depends on your perspective.

Beacon was unveiled earlier this month as a new Facebook marketing initiative which includes a system for other websites to collect and bounce back to Facebook, information about Facebook users activities on those other sites the idea is to expand the ways Facebook users can share information about their favorite products and services (online purchases, wish lists, etc.) with their Facebook friends. It works in conjunction with Facebooks targeted ad-serving program based on user and friend profiles and activity data (Facebook Social Ads). The genius factor is that advertisers get to harness the analytic data and performance metrics (Facebook Insights) of users where users have acted on specific brand preferences rather than simply having typed in a few key-word search terms as in a Google ad. Its part of Facebooks powerful new form of word of mouth advertising, where Facebook users preferences are published to friends in a way that stimulates a virally-induced buzz about a product or service. So, whats wrong with that? Well, the knock against Beacon seems to be that Facebook has crossed the line, where users previously were prepared to play along within the confines of what was being served up on the direct Facebook experience, but feel violated if theyre being followed once they log off their Facebook account.

With respect to privacy, Facebooks CEO Mark Zuckerberg states that, “no personally identifiable information is shared with an advertiser in creating a Social Ad,” and that “Facebook users will only see Social Ads to the extent their friends are sharing information with them.” Yet, the privacy problem with Beacon relates to its reach. Will your friend, Nancy, find out through Facebook that youve just bought her that new book shes been asking for the one you were going to give her as a surprise?

Yes, the backlash has been predictable. Already there are Facebook groups on Facebook complaining about Facebook (e.g. the group, “I don’t want Facebook tracking my Internet usage”. There is never a shortage of Internet users ready to complain about a free service. They could vote with their keyboards and move to other social networking sites that so far appear free of Beacon-like intrusions, like Ning, co-founded by Netscapes creator, Marc Andreeson, but the problem with other social networking sites is that they lack the critical mass of Facebook. Not enough people use them. Theyre not the place to be at, and so, Facebook users critical of Beacon say in effect that Facebook has thrown a party where everyone has shown up but now the free hors doeuvres blow.

Its somewhat disingenuous to complain about a free service, yet people do, and no doubt theres already been a rash of complaints to privacy regulators. On the surface, it seems there is something to complain about, especially about the negative option where a Facebook user does not opt-in to Beacon, but must somehow try to figure out how to turn the darned thing off the problem being that most users are not sufficiently aware whats going on from a technical point of view to know how to configure Beacon. The Office of the Privacy Commissioner of Canada states for example.

“Organizations covered by the Personal Information Protection and Electronic Documents Act are required to inform you fully and accurately about what personal information they collect, why they collect it, what they intend to do with it and how they protect it. Organizations must always have your informed consent before they may collect, use or disclose your personal information, and you must be given meaningful options for accessing that information and for resolving privacy issues and complaints.”

Informed consent is a touchstone of privacy legislation, yet it tends to be a moving target where companies collecting and using data online will point to terms of service on their sites to demonstrate that users have been informed, with those terms of service being modified as the services themselves are modified.

My continuing hope is that inevitable backlashes to new technologies do not become over-reactions on the part of regulators. There are plenty of sites for squeamish Internet users to play on those users who dont like the idea of their moves being tracked by Facebook. In a free society, the commercial exhibitionism and voyeurism represented by Facebook is a healthy and tolerable thing. Users quickly will deflate Facebooks critical mass if Facebook alienates them by becoming too crass or if too much attention is shifted to product placement. As for intrusions of privacy, well, if you dont like the direction that Facebook is headed, you should move off it, rather than trying to spoil the party for everyone else.