Catherine Holahan writes:
Facebook made modifications to a controversial advertising system that many users considered an invasion of privacy. On Nov. 29, the social network gave users greater control over the tool, known as Beacon, which broadcasts what they do on partner sites to other Facebook users. ...
... The Beacon brouhaha underscores the dilemma faced by social networks and other Internet companies such as Google (GOOG) attempting to generate revenue from the wealth of information they collect about users. Letting advertisers capitalize on such information helps Web companies collect sales and grow. But sharing too much data can result in the kind of backlash encountered by Facebook. ...
No one has been more critical than Umair Haque. Here are five recent posts:
Edge Principles: Love > Indifference. Link: Bubblegeneration.
Fixing Facebook. Link: Bubblegeneration.
Beacon 2.0: How Not to Think Strategically About... Link: Bubblegeneration.
Industry Note: More Evil Than Evil. Link: Bubblegeneration.
Research Note: Google vs Beacon, Or Why Advantage is in the DNA. Link: Bubblegeneration.
Brad Stone has an interview with Facebook about all this. Facebook Executive Discusses Beacon Brouhaha. Link: New York Times.
Also see Louise Story and Brad Stone, Facebook Retreats on Online Tracking. Link: New York Times.
Update 2 December 2007:
Om Malik has the background on this. See To Save Its Bacon, Facebook Weakens Beacon. Link: GigaOM. --Dennis