Webware

It's finally over for Beacon, the ill-fated advertising program that the social network initially launched with splashy Madison Avenue fanfare nearly two years ago.

The social network has settled a year-old class action lawsuit that targeted the social network's alleged failure to provide adequate information and privacy controls to users with regard to Beacon, which shared information about users' information on third-party partner sites in Facebook news feeds.

One of the terms of the settlement? Any last vestiges of Beacon, which failed to gain traction amid a barrage of negative press stemming largely from advocacy groups like MoveOn.org, will be shut down completely.

Also as part of the settlement, which is still pending approval from a judge, a $9.5 million "settlement fund" has been established to set up an independent foundation to "fund projects and initiatives that promote the cause of online privacy, safety, and security," according to a release. Up to a third of that fund, however, can potentially be recovered by the plaintiffs' lawyers.

"We look forward to the creation of the foundation and its work to educate Internet users on how best to control their privacy; engage in safe social-networking practices; and, generally, enjoy themselves more online by having knowledge that gives them a greater sense of control," a statement from Facebook representative Barry Schnitt read. "We fully expect the foundation to team with other leading online-safety and privacy experts and organizations that have been working diligently in these fields."

The suit was filed in August 2008 on behalf of 20 plaintiffs, most of whom were Texas residents. Named as defendants were Facebook, along with current and former Beacon participants Blockbuster, Fandango (owned by Comcast), Overstock.com, STA Travel, Zappos, Hotwire (owned by InterActiveCorp), and GameFly. Another, earlier Beacon-related lawsuit had been filed against Blockbuster several months earlier, claiming that its participation in the advertising program violated the Video Privacy Protection Act of 1987. Facebook was not named as a defendant in that suit.

Shortly after the negative buzz about Beacon started, Facebook began tweaking and modifying the program to allow more user control over the feature. But it was too late: advocacy groups claimed that it still wasn't enough, some existing partners pulled out, and others were likely deterred from participating because of the unsavory implications. Surprisingly, a "small number of customers" were still using it; Facebook will work to transition them out of it.

Facebook's experiments in social-media advertising turned instead to "engagement ads," which have come under some scrutiny themselves, and the "fan pages" that it encourages brands, organizations, and celebrities to create.

The irony behind Friday's news is that the thinking behind Beacon ultimately evolved into the phenomenally successful Facebook Connect, the universal log-in standard that, among other things, shares third-party activity on members' Facebook profiles.

The privacy controls on Connect are clearer and more extensive, but perhaps more crucial to Facebook Connect's success has been the fact that it's been marketed as a utility for ordinary members rather than an advertising tool for paying clients. It's free for third-party sites to implement, and with only a few exceptions, sites working with Facebook Connect code it in through the social network's application programming interface, or API, rather than ink a formal partnership.

And offering Facebook users the chance to register and log in to external sites without separate usernames and passwords gives Facebook Connect's marketing a slant of user convenience--and security, as some Web users may be more comfortable hitting a "Connect with Facebook" button than registering for an account with a new Web service.

"We learned a great deal from the Beacon experience," the statement from Facebook's Schnitt read. "For one, it underscored how critical it is to provide extensive user control over how information is shared. We also learned how to effectively communicate changes that we make to the user experience. The introduction of Facebook Connect--a product that gives users significant control over how they extend their Facebook identity on the Web and share experiences back to friends on Facebook--is an example of this."

A class action lawsuit filed earlier this week targets Facebook and eight of the participants in Beacon, its ill-fated advertising product that shared information about third-party site activity with the social network. The set of 20 plaintiffs, mostly residents of Texas, filed the suit in the U.S. District Court for the Northern District of California on Tuesday. Named as defendants are Facebook, as well as current or former Beacon participants Blockbuster, Fandango (owned by Comcast), Overstock.com, STA Travel, Zappos, Hotwire (owned by IAC/InterActiveCorp), and GameFly.

A Facebook representative told CNET News on Thursday that the company had not yet actually been served with the lawsuit, and that its legal team consequently did not have a formal statement at the time. STA Travel, Gamefly, and Overstock all declined to comment; none of the other defendants could be immediately reached.

"Until we're served, we're not being sued, so we don't have any comment," Overstock general counsel Mark Griffin told CNET News.

Beacon gained almost immediate notoriety when Facebook unveiled it as part of its Facebook Ads announcement last fall. Privacy advocates, most notably liberal activist group MoveOn.org, lambasted the program for not allowing users to disable it easily. Facebook has since modified the program and the controversy has wound down. But in the lawsuit, the plaintiffs point to the window of time before Facebook instituted the new controls--between November 7 and December 5 of last year--and claims that the social network still has access to a large amount of user data that was gathered in that period.

"If the user was not a member (of Facebook), Facebook still obtained the notification from the Facebook Beacon Activated Affiliate," the filing for Lane et al v. Facebook, Inc. read. "Information regarding user activities was sent in real time to a third party Web site--one which was not open or active in the user's browser, and one which, in many cases, the user may never even have visited or heard of."

There's one odd law that may make the plaintiffs' case stronger: the Video Privacy Protection Act of 1988. The law was passed amid the fracas surrounding Robert Bork's controversial nomination to the U.S. Supreme Court, when a journalist obtained Bork's movie rental record from a local video store and published it.

That's why there's already been a suit involving Beacon that specifically targeted Blockbuster for participating in such a program: a Texas woman filed suit against Blockbuster in April, claiming that the VPPA bars it from Beacon. Facebook was not named as a defendant in that suit, and though the plaintiff sought class action status for her case, she does not appear to have any involvement in this week's suit.

The defendants named in the suit don't encompass all of Facebook's original Beacon partners, but several of them could tie into VPPA protections: GameFly rents video games, Fandango sells movie tickets, Hotwire and STA deal with travel bookings, and Zappos and Overstock are both online retailers with a large scope (Overstock sells DVDs, for example). The suit also names the California Computer Crime Law and the Electronic Communications Privacy Act as grounds for the suit.

One of the plaintiffs, Sean Lane of Waltham, Mass., was immortalized in a Washington Post story about Beacon: He's the guy who bought his wife a diamond ring on Overstock.com, only to have her spot the purchase in a Facebook news feed, spoiling the surprise.

Guess he's still irritated.

As if troubled movie rental company Blockbuster didn't have enough to deal with already: an angry Facebook user has taken issue with its participation in the social network's controversial Beacon advertising program, and is pursuing legal action.

Cathryn Elaine Harris, a Texas resident, filed a complaint in the U.S. District Court for eastern Texas on April 9, claiming that it's a violation of a federal statute for Blockbuster to participate in Beacon, which shares rental history on Facebook members' "news feeds" unless they manually opt out. She is seeking class-action status, hoping to eventually net $2,500 for each infringement.

Don't want anyone to know you rented this cinematic gem? One lawsuit in Texas says it feels your pain.

(Credit: New Line Cinema)

Facebook is not included in the lawsuit.

In the suit, Harris claims that Blockbuster's sharing of her movie rental history through Beacon is in direct conflict with the Videotape Privacy Protection Act. The law was passed during the viciously contested nomination of judge Robert Bork to the U.S. Supreme Court in 1987, in the midst of which writer Michael Dolan went to a video store that Bork frequented and obtained a list of 146 videotapes his family had checked out.

Then Dolan reported on the not particularly scandalous list--no Debbie Does Dallas to be found--in an article in the Washington, D.C.-area City Paper. An analog-age privacy debate ensued, and the VPPA was passed in 1988.

Now, the Bork-era law has taken on a digital dimension: Harris vs. Blockbuster, addressing Facebook's "social advertising" program. The social network unveiled the Beacon ads in November, drawing criticism from activist groups like MoveOn.org for privacy violations until it modified the interface to allow for more user control.

A Blockbuster representative told MediaPost that adequate privacy protections are in place and that Blockbuster's legal team will "vigorously defend the company in this litigation."

Correction, Sept. 23, 2009: Michael Dolan has clarified that while he obtained and reported on Robert Bork's household's video rental history, he did not actually publish the list.

Little over a month since Facebook's Beacon advertising service came under fire over privacy concerns, the company's chief revenue officer has said that the "social ad" will remain a key focus for the social-networking site.

Owen Van Natta, chief revenue officer at Facebook, told an audience at the Consumer Electronics Show that most Facebook users are comfortable with sharing information about the products and services they consume.

Facebook's Beacon is an advertising service which posts messages on users' Facebook profiles about any purchases they make on Facebook-affiliated e-commerce sites. These social ads expose to other users such information as what movies their friend has watched, what music they have consumed, or what brand of clothes they prefer.

The premise of Beacon is that friends and other people who are intimately connected to a user are more likely to influence a purchasing decision than any other form of advertising.

The service came under fire late last year when it was discovered that users had little control over the release of information pertaining to their purchasing decisions. After a period of intense media scrutiny, Facebook founder Mark Zuckerberg responded with an apology and offered an option which allows Facebook users to opt out of the Beacon service altogether.

But Van Natta says it was the press and other privacy advocates, and not users, which forced the apology upon the company.

"One of the reasons it took us so long (for us) to respond was because it wasn't really a user thing as much as it was the press and the folks who are trying to highlight it and make it important to people," he said.

Van Natta said that only a "small single digit percentage" of Facebook users have since taken the remedial step of a total opt-out from Beacon. And not a single advertiser pulled out of the project when the privacy concerns were exposed.

In fact, the company plans to "open up" the Beacon service beyond the first 60 companies it began with, and will eventually make it "self-service."

Facebook users, he said, are predominantly young people who have grown up in an age where they are used to their information being shared on the Internet.

"We built Beacon because when you look at people's profiles, they are already doing things to share this kind of information; there is just the friction of having to enter it all in manually," he said.

As more and more content floods the Web, Van Natta believes that a greater emphasis will be placed on the "credibility of identity and content."

"Amazon.com reviews have become far more useful since posters have had to provide their name and since users have been able to vote on whether the review is useful," he said.

"Every day I hear radio ads for restaurants, but they rarely convince me to go eat at that restaurant. A friend, on the other hand, a person who actually knows me and knows my taste, can cause me to take action. The lens through which (the recommendation) is provided is the big difference," he said.

"We think people will want to expand what they are doing with Facebook," he said. "We just have to get the product right so that there's a comfort level and people don't think their privacy is being invaded. If you don't give people that comfort they won't share that information and usage won't happen."

This blog was created to cover cool Web apps, and one of the more interesting trends to follow is that of desktop software that has transitioned to the Web. Keybr, which surfaced a couple of days ago, is a typing tester, the same kind you might have suffered through in school. The goal of these apps (Keybr included) is to give you a scored typing test that rates you on your typing speed and accuracy.

The entire time you're typing, the app will keep track of your speed and accuracy with a live chart of your efforts. Things progress from basic typing, all the way to caps lock, shift and tab controls on blocks of text. There isn't a whole lot of separation between lessons, or instructional sessions, but there are some enjoyable bits like the pink message that flashes along the screen when you score a personal best for speed.

Back in my day (I'm only 25) we had the perennial all-star of typing applications Mavis Beacon, but many folks without simply had to self-teach, or come to terms with their "hen pecking" abilities. While Keybr doesn't have some of the advanced lesson planning and "games" that come with software typing solutions, it's a good way to judge your speed and general accuracy as long as you're willing to put up with the obscure lexicon of made-up words. These days I'd tell any novice typist to use an instant messaging app to get the hang of a keyboard, but there is something to be said about the value of learning touch-typing, as it can save you some serious time and physical strain if learned correctly. Keybr is missing some of that educational goodness, but the built-in charts and slick aesthetic make it a good benchmarking tool to see how well your typing skills are doing.

[via Digg]

Keybr lets you type like your life depends on it. It'll keep track of how fast you're going and if there are any errors. You can also check out a chart of your progress over the course of your lessons to see if you're improving.

(Credit: CNET Networks)

This post was updated at 1 PM PT with comment from Overstock.com.

Plagued by allegations of everything from deceptiveness to invasion of privacy, Facebook CEO Mark Zuckerberg has publicly backed down on the social-networking site's controversial Beacon advertisements and announced new modifications.

In a post on the company blog on Wednesday morning, the 23-year-old executive apologized for the mess surrounding Beacon, which shares information about users' activity on third-party partner sites and posts it to their friends' "News Feeds."

"We've made a lot of mistakes building this feature, but we've made even more with how we've handled them," Zuckerberg wrote. "We simply did a bad job with this release, and I apologize for it."

Last week, Facebook announced some modifications to the advertising initiative, but some critics had argued that they weren't substantial enough. Now, as a sort of olive branch, Zuckerberg also announced that there would be a way for users to turn Beacon off entirely.

"We missed the right balance," Zuckerberg continued in his post. "At first we tried to make it very lightweight so people wouldn't have to touch it for it to work. The problem with our initial approach of making it an opt-out system instead of opt-in was that if someone forgot to decline to share something, Beacon still went ahead and shared it with their friends."

Zuckerberg also apologized for the PR fiasco that followed. "It took us too long after people started contacting us to change the product so that users had to explicitly approve what they wanted to share," he wrote. "Instead of acting quickly, we took too long to decide on the right solution. I'm not proud of the way we've handled this situation and I know we can do better."

It was a gesture similar to the one Zuckerberg extended last September, when controversy over the site's then-new "News Feed" feature drew heavy user complaints--and lobbying for a "National Don't Log Into Facebook Day"--because it was allegedly invasive. At that time, Zuckerberg posted a similar blog post and also announced improved privacy controls. Newsfeeds, ironically, are now considered a staple of social networks--industry leader MySpace recently added its own.

But the Beacon situation was inherently different. For one, the charges against Facebook were led by a number of prominent activist groups rather than a rabble of angry users. Among them were the Center for Digital Democracy and the U.S. Public Interest Research Groups, which aimed to bring Facebook's advertising program to the attention of the U.S. Federal Trade Commission, and MoveOn.org, which had made lobbying for Beacon changes a high-profile project.

Several of those organizations have now released statements in reaction to Zuckerberg's apology, and their opinions are mixed. "The big question is: Will corporate advertisers get to write the rules of the Internet or will these new social networks protect our basic rights, like privacy?" MoveOn spokesman Adam Green wrote in an e-mail. "Facebook's policy change is a big step in the right direction, and we hope it begins an industry-wide trend that puts the basic rights of Internet users ahead of the wish lists of corporate advertisers."

Jeff Chester, executive director of the Center for Digital Democracy, was less optimistic. "Today's announcement that Facebook users will be able to turn off Beacon, following last week's opt-in changes, is a step in the right direction," Chester wrote in a statement. "But Mr. Zuckerberg isn't truly candid with Facebook users. Beacon is just one aspect of a massive data collection and targeting system put in place by Facebook."

Additionally, the Beacon debacle was more complicated than earlier Facebook privacy snafus because there were advertisers in the mix, too. Over the past few days, a number of Beacon participants, such as Overstock.com and Travelocity, confirmed that they had temporarily or permanently pulled out of the program. As a result, Facebook didn't just need to placate its user base and prominent activist groups, it also needed to save face among the major corporate partners whose advertisements it's counting on to grow a viable profit margin.

Jonathan E. Johnson, Overstock.com senior vice president of corporate affairs, said in an interview with CNET News.com that the company is not yet ready to consider rescinding its decision to ditch Beacon. "We've turned it off. We'll keep it off until it's crystal clear to the user that it's a double opt-in procedure," he said, emphasizing that he wants users to have to actively decide on both Facebook and Overstock that they want to participate--not that they want to not participate. Additionally, Johnson said, "we need to make sure that the Facebook community is accepting of this new type of advertising. Mark's blog is a first step toward that. It may be a full step toward that, but I can't say until we see how the community reacts."

Representatives from Travelocity were not readily available for comment.

Facebook's problems aren't over yet. Zuckerberg's image, as well as the company's, took an additional blow when a November article in 02138, an independent magazine for Harvard alumni, painted a rather unflattering picture of the company's beginnings when its founders were undergraduates at the university. Accompanying the article on 02138mag.com were court documents from the ongoing ConnectU v. Facebook trial, including a copy of Zuckerberg's application to Harvard. When Facebook lobbied to have the documents removed, a judge turned the request down.

Zuckerberg has begun picking up the pieces with the changes to Beacon. "Facebook has succeeded so far in part because it gives people control over what and how they share information," he wrote in the post. "This is what makes Facebook a good utility."

This post has been updated to clarify the names of companies participating in the Beacon program.

Facebook has altered its controversial "Beacon" advertising program, following complaints by users and protests from activist groups like MoveOn.org. The Beacon ads, which project Facebook users' activity on third-party partner sites--retailers like Blockbuster and eBay, for example--to their friends' "news feeds," are a key part of Facebook's much-hyped new social-advertising program, but they hadn't received the friendliest of reception.

It's a situation reminiscent of the one last year when the initial launch of Facebook's News Feed provoked extensive user protests, resulting in a profuse apology, and the installation of stronger privacy controls.

This time around, MoveOn and a group of dissatisfied Facebook users had taken on the allegedly invasive Beacon ads, claiming that they were not only a violation of user privacy that was difficult to work-around, but also was responsible for spoiling a handful of holiday surprises when online shopping lists were published on news feeds.

On Thursday evening, under heavy pressure from users, Facebook made some alterations to Beacon: "We appreciate feedback from all Facebook users and made some changes to Beacon in the past day," a statement from the company read. "Users now have more control over the stories that get published to their Mini-Feed and potentially to their friends' News Feeds."

The central tenet of the alterations, according to the statement, is that "no stories will be published without users proactively consenting." To that end, the pop-up window that informs a user that a third-party site action will be sent to Beacon has been changed; users need to click an "OK" button before the information is delivered and posted to Facebook. If the user does not act, the notification will go away until a future Beacon pop-up appears--it will contain both all older, unapproved notifications in addition to the new one. Finally, Facebook has expanded the user help section that deals with Beacon, and links to it on every pop-up notification for the program.

"We recognize that users need to clearly understand Beacon before they first have a story published, and we will continue to refine this approach to give users choice," the release read.

There is still no way to universally opt out of participation in the Beacon program. Representatives from MoveOn, who had been lobbying for at least a universal opt-out and ideally an opt-in to the program, nevertheless claimed "victory" in their campaign. "If Facebook changes their policy so that no private purchases made on other websites are displayed publicly on Facebook without a user's explicit permission, that would be a huge step in the right direction," MoveOn spokesman Adam Green said in a statement, "and (it) would say a lot about the ability of everyday Internet users to band together to make a difference."

Facebook stressed that it is actively protecting user privacy. "Facebook is not sharing user information with participating sites and never sells user information," the statement on Thursday evening emphasized.

In the wake of reports that suggested Facebook might be close to axing its controversial Beacon advertising program altogether, a company employee has come out and said that while changes to the application are imminent, it's not going away.

This follows a BusinessWeek report from Wednesday that indicated the program would be tweaked or even eliminated altogether.

Beacon, a component of Facebook's new "Social Ads" initiative, was assailed soon after its debut by leftist activist group MoveOn.org over what the group saw as grave privacy concerns. MoveOn stepped up its rhetoric earlier this week when it brought up evidence suggesting that Facebook had intended to make participation in Beacon easier to opt out of, but had changed the application shortly before its launch.

Now it looks like Facebook will be making some changes.

Facebook customer support representative Paul Janzer responded to the complaints in a post on the message board for the Facebook group that MoveOn had begun as a hub for its anti-Beacon campaign.

"Your feedback has made it clear that Beacon can be kind of confusing," Janzer wrote. 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." In addition, Facebook will offer expanded information about the advertising program on its site.

And in response to some dissatisfied Facebook users who said that Beacon ads had broadcasted their entire holiday shopping lists to their "news feeds," Janzer added the quick apology, "We're sorry if we spoiled some of your holiday gift-giving plans."

This story was updated at 2:36 PT to provide comment from Facebook and at 3:59 PT to provide further comment from MoveOn.

Is there more to the controversy surrounding Facebook's "Beacon" ads? MoveOn.org thinks so.

Last week, a feud began to brew between leftist activist group MoveOn.org and social-networking site Facebook concerning its "Beacon" advertisements, which broadcast information about users' activity on third-party partner sites to their friends' Facebook newsfeeds. According to MoveOn, it's a violation of user privacy because there's no way to universally opt out of Beacon ads. Facebook retorted, and the argument has turned into a legitimate debate over how far is really too far when it comes to sharing information about members' activity.

Now, MoveOn is poised to launch a new offensive against Facebook, claiming that early screenshots of Beacon posted by TechCrunch indicated that the advertising application once included a "global opt-out" that would allow members to block it entirely. According to MoveOn, this never made it into the final version, and the organization--which has created a petition and a Facebook group to raise awareness of what it sees as a hot-button issue--wants to know why.

"Facebook should explain why they chose at the last minute to put the wish lists of corporate advertisers ahead of the privacy interests of their users," MoveOn spokesman Adam Green said in a statement from the organization. "Facebook has the potential to revolutionize how we communicate with each other and organize around issues together in a 21st century democracy. But to succeed, they need the trust of their users. The fact that Facebook proactively chose to make it harder for their users to keep private information from being made public will rub a lot of Facebook users the wrong way. The ultimate act of good faith would be to switch to an opt-in policy."

Facebook issued a response on Monday afternoon in the form of an e-mailed statement. "Facebook is listening to feedback from its users and committed to evolving Beacon so users have even more control over the actions shared from participating sites with their friends on Facebook," the statement read. "Facebook already has made changes to ensure that no information is shared unless a user receives notifications both on a participating website and on Facebook."

Shortly thereafter, the back-and-forth spat continued as MoveOn's Adam Green issued a response to the response. "Facebook has made zero changes in Beacon since last week--their policy remains opt-out instead of opt-in, their opt-outs remain well hidden, and if someone does jump through the hoops of opting out it only applies to purchases made on one external web site instead of all sites," Green's statement read. "Why did Facebook pro-actively make it harder for Facebook users to protect their privacy by eliminating the global opt-out feature days before Beacon's launch?"

Meanwhile, reactions are divided. Comments CNET News.com readers voicing their opinions of MoveOn's persistent campaign have ranged from support for what they see as a rally against "outrageous breaches of privacy" to suggestions that if Facebook users have a problem with Beacon that they should, well, move on.

An early screenshot of Beacon, as seen on TechCrunch.

(Credit: TechCrunch)