• by Wendy Davis  @wendyndavis, Mark Walsh  @markfwal, November 30, 2007

Confronted with growing resistance to its new ad program, Facebook late Thursday said it would no longer publish information about users' online purchases without their explicit consent.

The move comes nine days after activist organization MoveOn.org launched a protest group on Facebook demanding that the company revamp its three-week-old Beacon program, which tells members about their friends' purchases on other sites. MoveOn urged that Facebook not share such information without first obtaining users' affirmative agreement. By Thursday, more than 50,000 members had joined the MoveOn group, dubbed "Petition: Facebook, stop invading my privacy!"

Facebook capitulated to the protesters late Thursday, announcing that it would require users' opt-in consent to the Beacon program.

The social networking site said it will no longer post any information about people's shopping activity "without users proactively consenting." "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 company said in a statement.

MoveOn spokesman Adam Green called Facebook's decision "a huge step in the right direction."

Previously, Facebook notified members about the Beacon program at the point-of-purchase and on the Facebook site, and allowed people to opt-out on either of those occasions. But if users didn't see those notices, or ignored them, the company shared information about their purchases by default.

It wasn't just users who had privacy concerns about that technique. Some of Facebook's advertisers also were retreating.

One major e-commerce player, Overstock.com, told OnlineMediaDaily it suspended the Beacon program on Nov. 21--the same day The Associated Press reported that one Facebook member was dismayed to learn that her boyfriend had been notified about a gift she purchased for him at Overstock.com. That was also the day influential Forrester Research analyst Charlene Li blogged about being "blindsided" when Facebook notified her friends that she had purchased a coffee table on Overstock.

The company said it wouldn't reinstate the Beacon program unless Facebook made changes to guarantee that users' information isn't shared without their explicit consent. "Our primary requirement is that the program allows customers to 'opt-in' as opposed to requiring them to 'opt-out' of participating," an Overstock spokesman said.

Travelocity, although touted by Facebook as a launch advertiser, was troubled enough by the program that it had not started using it as of Thursday.

"We have examined the process to make sure that Facebook members using Travelocity are given opportunities to control whether information about their shopping on our site is published in their Facebook profile," a company spokesman said. "Ahead of our launch, we are watching the program closely to make sure this process is working properly."

This cautious statement marked a notable shift from three weeks ago, when the company's chief marketing officer Jeff Glueck boasted about the program. "Using Beacon, Travelocity users can now easily choose to spread the news of their latest vacation plans on Facebook as a complement to their activities on the Travelocity website," he said in a statement when the program launched.