• by Wendy Davis , Staff Writer @wendyndavis, November 29, 2007

After three weeks of increasingly loud protests, Facebook is reportedly considering retooling its controversial Beacon program, which notifies members about their friends' purchases.

Company executives were in talks through yesterday afternoon and the change could come as early as today, according to a report today in Business Week. Facebook hasn't yet confirmed this report.

Currently, when Facebook members buy items like movie tickets or shoes on participating e-commerce sites, news of those purchases are sent to the members' friends.

Members have an opportunity to decline to share that information, but the opt-out system is seriously flawed, with users not seeing the opt-outs and/or not understanding that doing nothing means Facebook will share information about their purchases. And who can blame them? E-commerce sites have been saying for years that they respect buyers' privacy; people have no reason to think that the sites are now sharing information about their purchases by default.

A MoveOn group, "Petition: Facebook, stop invading my privacy!" started last week to protest the Beacon program, has now drawn more than 48,000 members. MoveOn is urging Facebook to make the program opt-in only -- which would certainly be more in line with people's expectations about privacy.

Of course, it's not just Facebook that's seeing a backlash here. Some of the company's advertisers, like Overstock, Fandango and Zappos, also can't be happy to see their names repeatedly mentioned in connection with privacy breaches.

Facebook obviously implemented Beacon in hopes of drawing more ad dollars. But given the pushback from members, not to mention the bad press for advertisers, it seems inevitable that the company will have to make some changes to the program.