Facebook brags about how it understands its vast community.

However, some members of the community have been perturbed lately, if not creeped out. Even MoveOn.org initiated an online protest.

The reason is Facebook's attempts to monetize things through its Beacon advertising system. Basically, it shows your online friends where you are shopping, such as from places like Amazon.com (NASDAQ: AMZN).

True, this may be useful in terms of getting helpful information (think of Beacon as a recommendation service) – but it also raises serious privacy issues.

Well, Facebook has blinked. Now, the company will provide an opt-in option to its users.

All in all, I think it's a smart move and should help quell some of the protest. However, it's likely to make it tougher for Facebook to crank out more money for its investors -- such as Microsoft (NASDAQ: MSFT) -- that have valued the company at frothy $15 billion. No doubt, the money-privacy balance will be a continuing struggle for the fast-growing website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

eBay Inc. (NASDAQ: EBAY) today reported its biggest increase in profit in five quarters, providing that reports of its death are greatly exaggerated.

Net income was $377.2 million, or 28 cents, compared with $248.3 million, or 17 cents, the San Jose, Calif.-based company said. Revenue rose 27% to $1.77 billion. Excluding one-time costs, profit would have been 33 cents, beating analysts' expectations of 30 cents. Shares rose in after-hours trading since the company gave guidance for the quarter and year that basically confirmed to Wall Street's views.

"This first quarter of 2007 was a very strong one for the company," said CEO Meg Whitman in the earnings press release. "The strength of our core businesses, as well as the significant traction we're beginning to see across our newer businesses, helped us deliver great results across the board."

Whitman can be forgiven for gloating, For the past two years, she's been blamed for bringing eBay to the brink of ahiliation at the hands of Google Inc. (NASDAQ: GOOG). These results underscore that her detractors were wrong and that her strategy, with the exception of the Skype acquisition, is proving correct.

Though some merchants complained loudly. eBay last year raised fees on fixed-priced items in order to make it easier for users to find the items they want to buy. The strategy paid off for investors who as Bloomberg News notes have seen eBay shares soar 28 percent since the increases took effect.

As I noted in my recent post, eBay remains an easy and inexpensive way for many people to buy and sell goods on the Internet. Though its growth rates have slowed, it still remains a formidable brand.

Wasn't eBay Inc. (NASDAQ:EBAY) supposed to be driven out of business by now by a combination of Google Inc. (NASDAQ:GOOG) and sellers irate about fee increases?

Guess what? eBay isn't going anywhere. Reports of the demise of the world's largest Internet auction site were GREATLY exaggerated.

Google, which has been heavily promoting Google Checkout, has proven at least for now not to be much of a threat. PayPal's revenue rose 37 percent, helped by the rebates and free shipping offers. Listings were even up which got me wondering what happened to the mad sellers. Did they leave and get replaced or did they leave and come back?

eBay not only posted better-than-expected fourth quarter results and boosted its profit forecast, it also announced plans to buy back as many as $2 billion in stock. Meg Whitman has sure got some nerve having a good quarter instead of selling off eBay to the highest bidder.

Wall Street missed the boat on eBay's popularity with gamers and its growth prospects in Europe. The company was smart to buy StubHub, a deal which makes tons more sense than the acquisition of Skype.

But shareholders shouldn't breathe easy just quite yet. Google may eventually figure a way to compete against eBay which will drive the company into the arms of a suitor. eBay, though, doesn't seem like it's in that situation yet, not be a long shot.

Check out some other earnings reports that we're following, and let us know what you're expecting.