• Business Week, Thursday, November 29, 2007 11:01 AM

Facebook may be the media darling of 2007, but the red-hot social network also knows a thing or two about growing pains, having shown in the past that it isn't too proud to make up for its mistakes. Well, Mark Zuckerberg and co. may have another one to make up for, as the peer-to-peer notification program "Beacon," unveiled recently as part of a broader social advertising initiative, continues to anger thousands of Facebook users. Beacon alerts Facebook users' "friends" about purchases and other activities they make involving third-party Web sites. Those actions are revealed unless users choose to opt-out of having the information published to their friends.

Among other things, Beacon has spoiled Christmas gifts for some people by revealing gifts. Others are annoyed that so-called friend alerts have turned into a direct-marketing campaign. As of Nov. 28, 40,000 users signed a petition asking that switch to an opt-in policy instead of the existing opt-out system.

Facebook is listening. While the move might appease Facebook's nearly 60 million members, its advertiser partners might not be so pleased. Third parties pay for these so-called "trusted referrals" in the hope that it will drive more traffic to their Web sites.

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