• GigaOm, Wednesday, November 7, 2007 11:45 AM

Facebook yesterday revealed its new three-pronged advertising strategy to mixed reviews. The most common reaction among bloggers was one of confusion--particularly with regard to Beacon, the program that "empowers" users to become product endorsers. Advertisers pay to put a little piece of javascript on their site that sends user interaction information back to Facebook. The user has to agree to allow the Web site to do this, and if they do, their purchase information is sent to their friends via a Facebook news feed.

GigaOm's Om Malik calls the initiative a "privacy disaster waiting to happen," because it gives the illusion that users are in control of their data when they're really not. Even if you purchase an item and ask the retailer not to display that information on Facebook, Facebook still receives that information, only it doesn't publish it--or at least that's what it sounds like, given Facebook's answer to Malik's privacy questions. If Malik is corrent, this means Facebook would know (and be able to profit from) what its users are doing across its Beacon partner sites.

Silicon Alley Insider's Henry Blodget has more questions about Beacon, which he calls the "only potentially revolutionary concept" in yesterday's announcement. However, as powerful a tactic as word of mouth undoubtedly is, why does Facebook think users want to take the time to shill products and services to their friends? Surely they must be planning compensation of some kind? Blodget notes that details about Beacon were sparse, and that Facebook may be planning some kind of reward program. If it isn't, then he says Beacon will fall flat. If it is--well, that too raises innumerable questions.

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