• by Laurie Sullivan , Staff Writer @lauriesullivan, August 23, 2010

RealNetworks VP Bill Hanks checked in to the Mercer Island Country Club on Facebook Places Saturday. It worked great, expect for one problem: He did it from his backyard treehouse about three blocks away.

Hanks wanted to test the Facebook Places' check-in feature related to the proximity of a venue, and the ability to check in where a friend had been, after TechCrunch's Michael Arrington proved he could check-in to locations across the globe within minutes of each other -- first, the TechCrunch headquarters in Silicon Valley, and immediately following, the Dubai Hotel & Resort.

While Facebook Places no longer appears to allow "vicarious vacationing," Hanks says members can still check in to locations from blocks away.

Social media companies, relatively new to the world of Internet security holes, continue to add privacy features to protect consumers. Facebook's move toward building tighter privacy controls did earn it applause from the Electronic Frontier Foundation last week. Comparing improvements to earlier features, the EFF released instructions on how to protect consumer privacy in Facebook Places.

Similarly, Foursquare had a privacy glitch prior to fixing its check-in bug. Users could check in to locations regardless of proximity, Hanks says. For example, someone could check into Madison Square Garden from their home in Huntington Beach, Calif. Now it appears users must check-in both to Foursquare and Facebook Places within about 800 meters, which he did from his backyard tree house.

Could the responsibility for the glitch lie on Microsoft, or in the link between the Facebook Places check-in feature and Bing Maps? Microsoft's $240 million investment in Facebook seems to have paid off. Bing Maps supports Facebook Places, but it's not clear if Microsoft should get a little finger-wagging for the programming bugs Arrington and Hanks experienced.

although Google also lets users broadcast location to friends through Google Maps, it seems the Mountain View, Calif., tech company doesn't have the same issues with the more than 100 million people each month who use Google Maps on their mobile phones.

Although every person on Facebook must agree before allowing a friend to check them in, Hanks points to another issue that still seems a bit iffy: check-ins through friends when the person being checked in isn't there. Since he was close enough to the location, Hanks checked in to the Mercer Island Country Club and tagged me with him. I received an alert asking if I want to "Let friends check you in to Places?" and clicked the green "Allow Check-ins" button. Some might think nothing wrong with that scenario, but the fact that I'm not there could present additional concerns.

Aside from criminal alibis, Facebook Places will likely provide additional revenue through applications that developers build as they figure out how to support marketing and advertising campaigns on top of the service.

Checking in from blocks away without entering the retail store could defraud many of the companies building marketing campaigns on the platform.

Aaron Goldman, author of "Everything I Know about Marketing I Learned from Google," says Facebook took a page from Google by launching a product before it's perfected, but it will fix the glitches and continue to iterate and innovate with Places.

"Speed to market is key with the popularity of Foursquare rising, but Facebook needs to nip it in the bud," he says. "With micro-blogging, Facebook waited too long to change its status update functions to more of a thought-sharing platform. That delay allowed Twitter to reach critical mass in the process. It won't make that mistake with check-ins, especially seeing the obvious tie-ins to long-tail revenue via local businesses."

If Facebook advertisers are sold unfocused demographic segments that fail to yield good-percentage ROI-fruit or, worse yet, totally bomb, then the experiment will be short-lived at least as far as advertisers are concerned, aimClear President Marty Weintraub tells me.

Of course, the closer a user needs to be in order to check in, the more targeted ads would be. Facebook, however, has thrown a lot at the wall to see what would stick. Places just may, he says. "Online players, from mainstream search engines to Yelp, have tried unsuccessfully to fully crack and monetize the local online marketing nut," he adds.

Then Weintraub gets a little philosophical. "If Places is a success, advertisers will be able to access users who are very close to their purchase, literally within meters. I agree with Weintraub when he says if the check-in location is too far away, Places may work, but advertisers might not find the contextual ads "laser targeted at 800 meters." Then again if the potential customer bails on the initial check-in from afar, the advertiser might more easily hijack the sale. "If so, brilliant," he says.