Facebook Loses Advertisers As Concerns Deepen

Things just keep looking worse for Facebook's Beacon: Coca-Cola and other advertisers are opting out of the program; there may be legal troubles ahead; and some investigative security work shows that Beacon sends information about user activity even when logged out of Facebook.

Facebook Loses Advertisers As Concerns Deepen Coca-Cola, one of the largest flagship partners in the program when it launched early last month, not only bailed on Beacon, saying they'd adopted a "wait and see" attitude, but agreed with opt out of all of it, rather than just one site at a time – was Facebook spokesperson Matt Hicks' response to Story:

Mr. Zuckerberg had meant that users would be given the opportunity to opt out of having information sent out by Beacon, and the company had assumed that anyone who didn’t say no meant yes. 

And by that logic, if I don't say no to you using my bathroom, I'm saying yes to you rummaging through my medicine cabinet.

Well, whatever the initial understanding of how Beacon worked, advertisers are bailing as user-backlash increases. Overstock.com let it go shortly after MoveOn launched its campaign, followed by Travelocity the next week.

That may have been just in time to avoid possible legal hassles coming out of New York and California. As William McGeveran pointed out on a Stefan Berteau did his own investigation, just a day after Facebook announced they would be "evolving" the Beacon program. Berteau found that Beacon was using cookies to silently track Facebook user actions:

"Despite the fact that I was not logged in, Facebook just received enough information to tie the activity I took on their affiliate to my individual account, which combined with the social data they already have, such as circles of friends, level of education, communication patterns, and geographic locations, would allow them to profile individual consumer behavior on a nearly unprecedented level of detail. "

Facebook eventually admitted that was going on, but said it was not using the data:

"When a Facebook user takes a Beacon-enabled action on a participating site, information is sent to Facebook in order for Facebook to operate Beacon technologically.  If a Facebook user clicks "No, thanks" on the partner site notification, Facebook does not use the data and deletes it from its servers. Separately, before Facebook can determine whether the user is logged in, some data may be transferred from the participating site to Facebook.  In those cases, Facebook does not associate the information with any individual user account, and deletes the data as well."

It begs the question, though, why is sending the information to begin with?

It looks like the troubles are just beginning for this program

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