
Facebook has had a breakout year -- BloggingStocks probably should have listed the social networking site among our
Hot Products of 2007. It
sold a small stake to Microsoft for $240 million, and its success with encouraging third-party add-ons forced
News Corp (NYSE:
NWS)'s MySpace and even the mighty
Google (NASDAQ:
GOOG) to
change tactics. But as
Tom Taulli and
The Wall Street Journal addressed yesterday, Facebook's stock with privacy advocates is dropping over its über-creepy Beacon targeted advertising method.
On Facebook, you're as private as you are modest. You have the option of laying bare
your bookshelf,
Netflix (NASDAQ:
NFLX) queue and purse contents for all your friends and neighbors to pan through, or you can leave all that business blank and keep your fancies as mysterious and enigmatic as you are, you unique snowflake. My profile tells users -- not to mention advertisers -- that I like to put on CNBC and dust my marriage-prohibitive record collection. Consequently, I've got
E*Trade (NASDAQ:
ETFC) and the occasional ironic t-shirt vendor after me, greeting me with animated ads whenever I log in.
By now, web users have learned to deal with e-tailers and ad-serving scripts tracking their behavior, realizing that oft-maligned cookies effectively just save you the effort of typing your password. This is reasonable targeted marketing: I pay nothing for a service, and in exchange, some vendor imagines it got a little closer to a selling me something.
Where Facebook and all the participating advertisers that sail with her cross the icky line is with Beacon. Beacon goes beyond serving up targeted ads -- it takes my purchase information from participating advertisers and broadcasts it endorsement-style to all my Facebook friends, as well as any others in my network who, for whatever illness or boredom, feel like probing my Facebook essence.