More Facebook Advertisers Bail From Beacon. Plus, New Concerns.

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1. Andrew
   

   December 3rd, 2007 at 2:08 pm

   It seems to me that because Facebook didn’t sell out when they could a couple of years ago, they now have to justify their inflated valuation by coming up with schemes which are ragged at the edges, complex, and not thought out properly.

   This afternoon Mr Zuckerberg should be lying on a beach somewhere or having coffee with his friends at University Cafe rather than trying to force this stuff into existance!

2. E Dewhirst
   

   December 3rd, 2007 at 2:12 pm

   I think the bigger issue is that this is a litmus test for how far you can take social networks and a direct impact on their valuation. If Facebook cannot leverage the users and their profiles without massive backlash - how much are the registered users worth? What if they are only worth what you can generate via pageviews and CPC (Cost per Click - Adwords kind of thing)?

   Because 15 billion meant each user was worth approximately 300 bucks a head - but that math does not hold up right now because I don’t think they get that kind of revenue from the advertising - that is a lot of clicking!

   Don’t want to ring the bell but - as Iron Maiden said “Run to the hills run for your lives !!!”

   Eric

3. Harold
   

   December 3rd, 2007 at 2:13 pm

   I just don’t see how Beacon benefits me as a user. Facebook has cash on hand, they should be focusing 100% on how to benefit users rather then how to monetize them.

4. John Minnihan
   

   December 3rd, 2007 at 2:15 pm

   “Consumer trust is a fickle beast”.

   Indeed.

5. John
   

   December 3rd, 2007 at 2:21 pm

   I saw beacon advertisements in a friend’s mini feed the other day - they all seemed so out of place.

6. gilltots
   

   December 3rd, 2007 at 2:32 pm

   in related news, facebook’s valuation just dropped by $14.7 billion. shoulda sold it when you could have, mark. by the time you guys figure out how to tap into this thing, everyone will have moved on to the next big thing.

7. Chris
   

   December 3rd, 2007 at 2:39 pm

   I am not surprised at the backlash Facebook are experiencing. This is exactly what happens when a young 20-something kid gains notoriety and control over such as vast number of users through a site like this. His, and his teams, apparent lack of experience is starting to show and I suspect things will only get worse. They seem to forget that web site traffic can just as easily dissipate as fast as it appeared. Facebook doesn’t do anything that a decent developer could whip up in a few weeks. Therefore, their focus should be on how to maximize the perceived value of Facebook by their user-base BEFORE they try to monetize the site. Simply hooking up with old friends isn’t enough anymore. Or perhaps Zuckerberg should have sold out to Yahoo a year or so ago when he had the chance.

8. AnonTechie
   

   December 3rd, 2007 at 2:40 pm

   The technologically efficient way to handle the data is that when I say no, don’t send the data to Facebook. The partners are using Facebook’s own javascript to display the toast, etc., so *not* sending that data is as easy as them changing their code.

9. EH
   

   December 3rd, 2007 at 2:42 pm

   “I think the bigger issue is that this is a litmus test for how far you can take social networks and a direct impact on their valuation. If Facebook cannot leverage the users and their profiles without massive backlash - how much are the registered users worth?”

   This is a false dichotomy. The question isn’t “how far,” because Facebook hasn’t found out yet. They seem to be finding out where “too far” is while dialing back the offering, but it sure looks to me like they’re still on the far side of acceptible (both to their users and their advertisers). So, none of us know “how far” too far is, we only know that there’s a such thing as “too far.”

   Also, another fallacy you assert is that Facebook is fomenting a yes/no decision on leveraging their users. This isn’t an “either/or” situation, where Facebook now just throws their hands up and says, “Welp, we tried but it looks like users can’t be leveraged!” This is patently ridiculous, as per my previous paragraph. Sure, if you define a leveraged user as one that accepts Beacon, but the landscape is not that cut-and-dried. There are myriad ways to turn users into dollars, it’s just that Facebook used a shotgun when something smaller would have been just fine, but the problem with shotguns is that they cast a wide target, hitting people who wouldn’t normally care about this controversy. Ooops.

10. Chris Saad
    

    December 3rd, 2007 at 2:51 pm

    The problem, though, is not with Facebook - the problem is with us. The community and bloggers. We are focused on what we don’t like about Facebook instead of what we do like about an alternative to Facebook.

    Like the mainstream media we fail to provide context and alternatives to the stories being told. We need to talk about a new model of social networking. A model where we have undisputed access to our friends, data and rights.

    I’ve posted more here: http://www.particls.com/blog/2.....alled.html

11. The Underminer
    

    December 3rd, 2007 at 2:57 pm

    @Chris:
    > This is exactly what happens when a young 20-something
    > kid gains notoriety and control over such as vast number of
    > users through a site like this.

    Chris, it is incorrect and unfair to pin FB’s recent problems on Zuckerberg’s age. We all know many classic examples of very good companies founded and successfully run by young people.

    Zuckerberg is on the record promoting ridiculous views on age and intelligence (”Young people are just smarter” : http://venturebeat.com/2007/03.....up-school/)

    We should all avoid this sort of foolishness, in either direction.

12. Patrick
    

    December 3rd, 2007 at 2:59 pm

    This shows how Mark doesn’t understand advertising. When users have their information taken and used, they will be okay with it as long as they get something out of it that they deem worthwhile. For example, most people are okay with Google showing relevant ads to you next to your Gmail because they feel that the benefit they get from Gmail outweighs the risks of Google having access to that information. The same goes for search, where Google, Yahoo etc have access to your query history. Users are okay with it because they see the search results as worthwhile.

    Zuckerberg doesn’t understand that. He presumes that young people won’t care about their privacy and knows that they won’t switch sites over this. The problem is that the way it works now, Beacon adds absolutely value to a Facebook users experience. Knowing what your friends purchased is not a good enough feature that it outweighs the risks involved with Facebook and third party companies having access to your buying behavior and them spamming your friends about it. This is why Beacon will fail unless they do something about it.

13. EH
    

    December 3rd, 2007 at 3:09 pm

    Heh, do you people really contend that Zuckerberg did this all on his own?

    That said, I agree with Patrick a little bit. Nobody really pays attention to the fact that there’s a flipside to “user friendly,” which is “user-hostile.” Beacon is eminently user-hostile.

14. Sean
    

    December 3rd, 2007 at 3:30 pm

    @ #3 - Harold

    You hit the nail on the head. Beacon is borderline exploitative. It’s about as blatant a tracking/reporting system as I’ve ever seen. I predicted this would go a little too far, and perhaps it has.

    Or perhaps they’ll lose a percentage of users, the rest will just get used to it, and new users won’t know the difference. Unfortunately I think this might the way it goes, with people too naive to realize how they’re being turned into $$$ and creating a permanent record of their behavior online.

15. Chad
    

    December 3rd, 2007 at 3:33 pm

    I would assume that another reason advertisers are backing out is that the value of the customers on Facebook is not really that high. How much can a teen be worth to Travelocity or Overstock, when was the last time you saw an 18 year old book a 10 day vacation or purchase anything besides dorm sheets from Overstock. I would think the audience at FB is not worth very much, its really like advertising Target in a bar or other social event, people just are not in the ‘purchasing’ mode when there, unlike when I am searching ‘10 day vacation’ on google.

16. David
    

    December 3rd, 2007 at 3:34 pm

    Out of curiosity: my understanding is that the way Beacon works is that the partner site (let’s say Blockbuster) sends each activity and associated email address to Facebook, and then Facebook decides whether to publish that activity if there’s a Facebook account. That means that not only are they still receiving the data on people who have opted out of the program; they’re still receiving data on people who don’t have accounts on Facebook. Thus, the only way to not partake in the program is to not use any partner web sites.

    Am I correct, or am I missing something?

17. Chris
    

    December 3rd, 2007 at 3:37 pm

    @The Underminer

    Mark Zuckerberg’s approach to online business and his arrogant comments about young people being somehow smarter than us old guys (I’m 40 - with 12 years web development experience - so I guess I was never a ‘young smart guy’ in his terms) only reinforces my previous comment that he and his team of ‘young smart developers’ lack the most important ingredient - experience! (as in LIFE experience, SOCIAL experience, BUSINESS experience).

    It’s ludicrous to assume that just because you can write a bit of code and attract a big audience (and let’s face it - Facebook started as a college site with a pretty fickle user base before it opened up to the rest of us ‘old guys’) that you somehow have your finger on the pulse of social networking. Social networking is all about human interaction - not bits and bytes. A basic understanding of how advertising works from the human perspective would go a long way in helping Zuckerberg and his minions get their aim right.

    But then again, time will tell. Mark will eventually gain the experience he needs as he too grows older and wiser. But my bet is that it will be all too late and he and his online graffiti wall will become another addition to the ‘where are they now’ pile. The web is a big place and fortunes are just as easily lost as they are made.

    Soap box is now back in storage

18. John Minnihan
    

    December 3rd, 2007 at 3:45 pm

    This video from John P over at allthingsd has a good explanation of what beacon is actually doing. The fact that it transmits activity from affiliates even when you aren’t logged in to facebook has me wondering about the privacy policies of those affiliates:

    http://digitaldaily.allthingsd.....v20071203/

19. Ron Palmeri
    

    December 3rd, 2007 at 3:45 pm

    the crazy part is how inconsistent the actual behavior is with their explanations. it seems to be reading FB cookies and automatically adding your activity to the feed. you can’t opt out until *after* the initial activity, such as buying something or playing a game, is already broadcast to all your friends.

    from what I’ve seen, there’s no notification on the partner site that they’re even participating, much less asking you if you want it posted to FB. the couple of people I’ve seen discover this were pretty freaked out. not the kind of surprise you want from users…

20. Alex
    

    December 3rd, 2007 at 3:54 pm

    After much consideration and putting on my management consultant hat I have come to the following conclusion about the thought process that went into launching Beacon. Here it goes;

    OOPS!!!!

21. Chris R.
    

    December 3rd, 2007 at 3:55 pm

    OMG, that facebook, what will they do next?

22. Joop
    

    December 3rd, 2007 at 4:07 pm

    They should focus on implementing stuff from partners that deepends their core business and adds functonality. Zuckenberg himself says that Facebook is there to facilitate communication.. so how does beacon add to that again? It doesn’t It’s there to exploit the fact that they have a huge database of users. Myspace can get away with a lot of commercial activity, since it’s more geared towards that.. The super clean communication and network tool that Facebook presents itself to be, and well, in fact is.. cannot get away with this… they should forget getting big brands on there and start thinking how they can work on their core business geenrating revenue.. and yes, that’s a challenge.. should have thought about that before all those millions were pumped into it… LOL

23. AnonTroll
    

    December 3rd, 2007 at 4:09 pm

    With Beacon, Zuckerberg has shown his true shady color and unabashed arrogance. For those of you that care to know how many friends he screwed, read this article (I am not affiliated in anyway other than a reader)
    http://www.02138mag.com/magazine/article/1724.html

24. AnonTroll
    

    December 3rd, 2007 at 4:22 pm

    Oh another thing, in part Zuckerberg’s arrogance is strengthened by his association with Google founders Larry and Sergey. They all shared the view that if you aren’t from an Ivy League school or if you are over 30, you are worthless. The level of arrogance among these young entrepreneurs stink to high heaven.

25. Johhny B Good
    

    December 3rd, 2007 at 4:43 pm

    OK. Now you got me thinking about this company called Facebook. After reviewing the Founders background I give the following marks:

    Scale between 1 - 10 (10 highest marks or degree of probability)

    Ability to Raise Capital: 10
    Creating Smoke & Mirrors: 10
    Level of Shadiness: 10
    Manipulating Microsoft: 10
    Manipulating Google: 1
    Being replaced as CEO by end of Q1 of ‘08: 9
    Firing of at least two executives (taking a bullet for Beacon) by end of Q1 of ‘08: 9
    Probability that company has lost at least $5 billion of its value in the past two weeks: 9
    Probability that Google Executives are right now in the conference room laughing their tales off at the amateur hour: 10

    Mood this Holiday Season at the Zuckerberg home after lining his pockets with millions of dollars:

    PRICELESS!

26. Chris
    

    December 3rd, 2007 at 4:45 pm

    This just in - FaceBook raises another cool $60M - http://www.smh.com.au/news/biz.....29544.html

27. AnonTroll
    

    December 3rd, 2007 at 4:48 pm

    @26 Chris, that’s so last week’s news.

28. Chris
    

    December 3rd, 2007 at 4:48 pm

    Sorry.

29. Randy V
    

    December 3rd, 2007 at 4:49 pm

    I don’t see what the big deal is. There is no privacy on the Internet! Deal with it! I’m almost 40 and like most 20-and-unders I don’t really care anymore.

    So what if the data is sent to Facebook or not. If it doesn’t appear on my friend’s news feeds, that’s fine by me. A difference that makes no difference is no difference.

    Get out of your high horses, all you old fuddy-duddies!

30. John
    

    December 3rd, 2007 at 4:54 pm

    @29 Randy,

    Protecting one’s privacy is not being an old fuddy-duddy. By the way, your wife just found out that you bought butt-plugs, courtesy of Facebook.

31. ki
    

    December 3rd, 2007 at 5:11 pm

    @12 Patrick,

    good point. I agree with you.

32. Alex
    

    December 3rd, 2007 at 5:26 pm

    @30 Randy - Classic!

    @29 Randy V - she also found out that you purchased “How to deal with Crabs” via Amazon….courtesy of Facebook.

    

33. Hasan Luongo
    

    December 3rd, 2007 at 5:27 pm

    good to see that facebook is facing some growing pains - they can’t be darlings forever - and at some point people say wait a second - what give fb the right to distribute and monetize my activities.

    I wish people would be as harsh as they are on FB with Google, they get away with everything.

34. AnonTroll
    

    December 3rd, 2007 at 6:22 pm

    The reason why people haven’t been as harsh with Google is because there is a seasoned CEO at the helm who knows how to work the PR machine and babysit Larry and Sergey. I totally agree that Google is pure evil, all the way.

35. Lucas
    

    December 3rd, 2007 at 6:22 pm

    If you want to totally disable beacon everywhere you can use the firefox addon http://debeacon.org/ If you use this addon, not only will you not get beacon prompts on non-facebook sites, but facebook won’t be able to tell what you are doing on these other sites in the first place.

36. Moe Glitz
    

    December 3rd, 2007 at 6:27 pm

    If Facebook loses its way with Beacon, then the Web 2.0 Bubble will surely pop.

37. Chris
    

    December 3rd, 2007 at 6:53 pm

    >>”According to one security engineer’s analysis, Beacon partners transmit data to Facebook in bulk about members who visit their site. This is true even for those who opt out of Beacon by clicking on “No Thanks” when asked if the data can be shared with Facebook.”

    You’re talking about declining the *display* of single news feed. There is no GLOBAL opt-out of the Beacon program. You can only ‘opt-out’ of having individual feeds displayed, or from having them displayed from specific affiliates - NOT from the program itself. (which is at the root of the whole breach of privacy and all, even non FB-user, info is shared)
    It’s an ‘opt-out’ - that isn’t. (PR deception)

    This brings me to next point you make about the NYTimes not sharing your data with FB –> The way this whole thing is set up makes it so they *have* to ! They (or any other partner) are not just sharing your stuff, their sharing *everyones* There is no way for them to manage it. It’s like Google Analytics code or something. If the Beacon javascript code is on a partner’s page, it’s calling home (to facebook) for *everyone* who visits.

    The partners aren’t therefore ‘controlling’ or managing what’s sent, Facebook is snarfing it all by way of some javascript they control, embedded in their partner’s pages. It remarkably simple and yet, remarkably flawed.

    When more businesses catch on to this shotgun approach, I have to believe it’s going to be an epic fail, unless FB modifies it so the partners have more control AND users can do a *global* opt-out of the entire program.

    In it’s current implementation, it’s broken and frankly unfixable from a privacy standpoint.

38. AnonTroll
    

    December 3rd, 2007 at 6:57 pm

    As if things couldn’t get any worse, this just in

    “Facebook’s Beacon Ad System Also Tracks Non-Facebook Users” WTF!?!?!

    Details at
    http://www.pcworld.com/article.....ticle.html

39. Stephen McDonald
    

    December 3rd, 2007 at 7:16 pm

    @38 AnonTroll

    Thank you for the link. After reading the story I closed my facebook account. Period.

    They are scumbags who can’t come clean.

40. ki
    

    December 3rd, 2007 at 7:30 pm

    @38,
    thanks for the link. good to know.

    so they can go to a site : see, here are your stats, come to the dark side, or else i will do a pop up to my users who visit your site that your site distribute virus. u know what I can do.

    the M Zuck will come out, say “you are either our friends, or our enemy”

41. toad
    

    December 3rd, 2007 at 7:34 pm

    o. let this be. I will soon launch a law suit to fb partners that they are passing my information fb.

    my life is all set by then. I am calculating my damage now.

42. Rocky
    

    December 3rd, 2007 at 7:34 pm

    At it’s core, Beacon is entirely consistent with what Facebook is about.

    Facebook’s reason for existence is to distribute information about your personal life to your friends. That’s what has made it popular to the tune of more than 40 million users and a lofty $15 billion valuation. People clearly want to share their information with their friends.

    That said, the implementation was flawed.

    I took a look at different approaches for implementing Beacon, with the corresponding impact on adoption and privacy:
    http://redesign.wordpress.com/.....ok-beacon/

43. John Minnihan
    

    December 3rd, 2007 at 7:35 pm

    This is getting a lot of attention from the mainstream media. In a comment on the Silicon Alley Insider’s article on this ( http://www.alleyinsider.com/20.....eacon.html ), Walt Mossberg said

    “Time for Accel and Greylock to get a new CEO with a moral compass. Breyer can hopefully learn from this. Fast up can mean fast down.”

    I wouldn’t be surprised to see this topic get Walt’s full attention soon.

44. Marc
    

    December 3rd, 2007 at 7:48 pm

    Jackass should of sold to Yahoo when he had the offer. Doesnt he realize that overnight all it takes is someone new and better to come along. It’s not like he developed something that nobody else can create.

45. Alex
    

    December 3rd, 2007 at 8:09 pm

    ‘cmon, people! Everybody should be interested in what panties his facebook girl ‘friend’ has just bought from Victoria Secrets! Everybody want’s to know what Airline ticket MA got. It’s so… ‘interesting’… it’s so… del.icio.us

    Kidding. But it’s really just about instant disgust everybody feels witnessing a picture of burglar going though his/her dirty laundry bin. Bigbrotherbook.com just doesn’t have his understanding, that’s it. Stupid. And nothing more. Nothing to talk about.

46. toad
    

    December 3rd, 2007 at 8:09 pm

    i jsut want to know, has anyone heard a good thing about beacon?

47. Patrick
    

    December 3rd, 2007 at 8:50 pm

    John Battelle came to our class at Berkeley today and we talked about Beacon. You can hear the conversation here:

    http://courses.ischool.berkele.....edule.html

    Scroll down to December 3rd.

    @31 ki Thanks for the positive feedback

48. Mark Mayhew
    

    December 3rd, 2007 at 11:53 pm

    #25, Johnny B Good:
    ROFLMAO!

49. AEP528
    

    December 4th, 2007 at 4:21 am

    Wait, isn’t eBay a Beacon partner? Does that mean information about *EVERY* eBay sale is being transmitted to Facebook? Okay, guess I’m not using eBay any more.

50. Parul Bindra
    

    December 4th, 2007 at 4:22 am

    Looks like things are going horribly wrong for Facebook. This is unbelievable. So Facebook decided to switch their program in a very significant manner - one that would effect their users and partners - and decided to tell no one. Including companies like Coca Cola, who I’m sure spent a great deal of time hammering out this deal with Facebook. How stupid could the people at Facebook be? They could have major law suits on their hands. And not from an irate user but from a major corporation. If Facebook is willing to change their operational agreements without telling their partners, willing will they be to change their agreements with their users without telling us? If Facebook is that incompetent in handling their operational structure, then how incompetent will they be in handling the data and info they receive about us?

    Parul
    http://www.bhopu.com

51. Bob
    

    December 4th, 2007 at 4:40 am

    It boils down to trust. Facebook has asked users to suspend their privacy concerns and trust them, but that Facebook has violated their trust. To get it back they are going to have to take measures to protect user privacy.

52. Steve Ballmer
    

    December 4th, 2007 at 6:11 am

    They are all wrong! TC needs to stop all this negative spin!

53. Lars Fischer
    

    December 4th, 2007 at 2:30 pm

    So what? FaceCrunch has jumped the shark!

54. Ree Tanjuatco
    

    December 4th, 2007 at 5:10 pm

    Back Off Facebook. DON’T Be Evil…

55. John Minnihan
    

    December 4th, 2007 at 6:08 pm

    Beacon can easily (for now) be blocked. Apparently, all the javascript that controls this is located behind a common URL: facebook.com/beacon

    Using a URL-blocker with that in a rule should do the trick. Here’s where I learned about this: http://tinyurl.com/2xjak6

56. Glenn Gow
    

    December 4th, 2007 at 8:52 pm

    Earth to Mark Zuckerberg, have you forgotten about your users? OK, you reversed course on portions of your advertising scheme, in response to user complaints. I give you credit for that. However, I think you’ve forgotten that you are a two-sided platform. One side is your advertisers and the other is your users. You are serving your advertisers to the detriment of your users. To win a platform war (and believe me you are in a war that will last for a very long time), you need to serve both sides. If you lose one side of the platform, you lose the other side as well.
    Your current advertising scheme (even with changes) is all about your advertisers. I can see no benefit to your users, only headaches. (See Facebook’s Social Ad Experiment)
    If you continue down this path of making life more difficult for your users, they will go somewhere else (do you remember Friendster? Do you know what Ning is?)