Facebook's Beacon advertising system angered thousands of people because it coughed up information that some users didn't want their friends to see.
But how are the Beacon partners, which joined the program when it was unveiled Nov. 6 to share information about users' online transactions with friends, handling this public relations nightmare?
Reactions were mixed days after Facebook on Nov. 29 made Beacon opt-in instead of opt-out after a petition signed by more than 50,000 Facebook users ripped the company for sharing their Web activities.
One Beacon partner spokesperson, who asked not to be identified, said the situation has not been a big issue for his company, which had created an application that works with Facebook's Beacon system.
Noting that what his company offered was a public service, the spokesperson said his company had no plans to exit the Beacon program or change its current relationship with the beleaguered social networking site.
Read more here about Facebook refreshing its ad system.
However, he also said he could see how some of Facebook's other Beacon partners could be concerned because some of the transactions, such as buying "Victoria Secret underwear from [Beacon partner] Overstock.com," may warrant more privacy.
Retailer Overstock.com, movie rental store Blockbuster.com and travel site Travelocity did not respond to questions about whether the privacy snafu would alter their status within Facebook's Beacon system.
EBay plans to integrate Beacon to let eBay.com sellers choose to include their eBay listings in their Facebook News Feeds. This integration, designed to let eBay.com sellers find a new way to drive bidders and buyers to their listings, is still on tap for early 2008, eBay spokesperson Usher Lieberman told eWEEK.
"When we go live with our implementation in Q1, we're satisfied that privacy issues will be addressed because that's critical to our implementation," Lieberman said, noting that eBay will not expose buying information on the Facebook News Feed to ensure the privacy of its users.
Moreover, Lieberman said that when eBay does integrate with Beacon, it will be explicitly opt-in, so sellers can choose whether they want to share their listing activity with their friends on Facebook.
Some Beacon partners who haven't yet integrated with the ad system are taking a different tack.
Coca-Cola, which Facebook tabbed a "landmark" ad partner when it unveiled Facebook Ads and Beacon, told the New York Times it is shelving its current implementation plans for Beacon. The company spokesperson said the Atlanta-based soft drink maker was under the impression that Beacon would be opt-in from the start.
New York City retailer Bluefly.com, which had internal problems trying to integrate with Beacon and has not yet participated in the program, is evaluating whether it wants to be part of it because of the privacy imbroglio, a spokesperson told eWEEK.
The differing opinions reflect the uncertainties that Facebook, MySpace and its rivals face in trying to derive additional revenue from their businesses by inserting ads into their social networks.
The networks need to bring advertising partners into the fold to make these ad programs fly, but they also need to employ technology and practices that catch users' attention while protecting their privacy.
Facebook unleashes Beacon system. Click here to read more.
Typical ad platforms that target users use are demographics and sometimes context, but Facebook Ads leverages social details in ad targeting that the industry hasn't really seen before.
The way Facebook initially implemented Beacon is an example of how not to circulate ads on social networks. Users complained that they didn't see the opt-out button, which disappeared after a few seconds. Now, users can decide whether they want businesses to share information about their transactions.
IDC analyst Karsten Weide said that although Beacon is a brilliant way to improve advertising effectiveness and a template for new media publishers, it is also a case study in how not to introduce behavioral ad targeting on a Web site. Facebook, Weide said, should have tested Beacon with real-world users for feedback.
He said behavioral targeting, if done right, will help consumers get rid of a lot of advertising that was never intended for them. What Facebook should have done, Weide wrote in a research note, was to be explicit with regard to its use of users' data.
He also said that setting up an opt-out system is okay as long as directions on how to opt out are explicit, and not fleeting and vague.
Check out eWEEK.com's Search Center for the latest news, views and analysis on enterprise search technology.