Fog Over Facebook's Beacon

As protests mount against its Beacon social advertising system, Facebook has not yet given any indication on whether it plans to alter significantly a feature it is counting on to drive revenue growth.

Since the introduction of Beacon, users have complained about the difficulty in opting out of the system, which broadcasts a user's purchases to those on his or her network.

And when activist group MoveOn.org recently assailed the program as a gross violation of privacy, Facebook truly began to feel the heat.

Now, amid rumors that Facebook may seek to scuttle Beacon altogether, the company appears to be in a state of confusion over whether to modify the feature.

Brandee Barker, Facebook's chief spokesperson, declined to comment on whether an announcement regarding Beacon would be forthcoming, when Portfolio.com reached her by phone Thursday afternoon.

Facebook is in a tough position, because it is counting on Beacon to drive revenue growth for the company - which expects to earn only $30 million this year. Microsoft recently paid $240 million for a 1.6 percent stake which valued the company at $15 billion.

Indeed, the reason Beacon has the potential to be so profitable is that it is difficult for Facebook's 50 million users to opt out of it.

As Facebook's chief executive, Mark Zuckerberg, said a few weeks ago, "There is no opting out of advertising."

If Facebook changed Beacon to be fully "opt-in," that would mean that by default, the social network's 50 million users would not be participating in Beacon, and would have to consciously join the advertising program.

Unfortunately for Facebook, the main reason why people use the website is not to purchase things, but rather to, yes, network with their friends.

In a sign that the company may be considering changes to Beacon, a Facebook employee posted a response to the criticism on a Facebook discussion page late last night. It is not known whether the response was authorized by the company, or whether the employee and taken it upon himself to enunciate corporate policy.

"Thanks for your feedback about Facebook Beacon, it has definitely helped us make some changes to the product that we hope will provide you with a better experience on Facebook," wrote Facebook employee, Paul Janzer.

Janzer continued:

"Your feedback has made it clear that Beacon can be kind of confusing. To fix this, we are clarifying the way we inform you about a Beacon story before you decide whether or not you'd like to publish it on Facebook. We're also working on making the sites that offer Beacon more visible to you, both on Facebook and through visual cues, so you can determine which specific sites you can publish stories from. Also, we're providing more information on how Beacon works through a new tutorial and expanded help pages."

"We're sorry if we spoiled some of your holiday gift-giving plans. We are really trying to provide you with new meaningful ways, like Beacon, to help you connect and share information with your friends. Thanks for taking the time to express your opinions about our products. Please keep the feedback coming as we continuously work to improve your Facebook experience."

Sam Gustin