On Monday I argued that Facebook would soon change Beacon to provide a global opt-out feature. According to Business Week, “Executives of the three-year-old company were in deep talks over proposed changes late into the afternoon on Nov. 28, according to a person familiar with the matter. At issue is the Beacon program, which alerts members’ Facebook ‘friends’ to purchases and other activities on third-party Web sites.”

Following the rumored discussions last night, Paul Janzer of Facebook, posted on the MoveOn.org Facebook group that is petitioning against Facebook Beacon privacy violations:

Thanks for your feedback about Facebook Beacon, it has definitely helped us make some changes to the product that we hope will provide you with a better experience on Facebook. Beacon was designed to help you share all the interesting things that you are doing outside of Facebook with your friends. Just like you have full control over your information on Facebook, you decide whether or not you want Beacon stories to be published and from which site.

Your feedback has made it clear that Beacon can be kind of confusing. To fix this, we are clarifying the way we inform you about a Beacon story before you decide whether or not you’d like to publish it on Facebook. We’re also working on making the sites that offer Beacon more visible to you, both on Facebook and through visual cues, so you can determine which specific sites you can publish stories from. Also, we’re providing more information on how Beacon works through a new tutorial and expanded help pages.

We’re sorry if we spoiled some of your holiday gift-giving plans. We are really trying to provide you with new meaningful ways, like Beacon, to help you connect and share information with your friends. Thanks for taking the time to express your opinions about our products. Please keep the feedback coming as we continuously work to improve your Facebook experience.

The response by Janzer fails to mention anything regarding a global opt-out feature that many have been calling for. While Facebook may argue that users have agreed to the Beacon service by becoming members of Facebook, opting-in users by default is not only controversial but it’s wrong. It sounds as though Facebook will be changing the design of the Beacon alerts so that they are more obvious. I think this is a great first step but Facebook needs to suck it up and add the global opt-out feature. What do you think about Janzer’s comments?

Chances are high that if you read this blog, you probably spend a fair amount of time on Facebook. I know I do! Hugh Macleod has posted about Facebook consciously sacrificing design improvements for the purpose of extending the amount of time users spend on Facebook. I have to disagree with Hugh on this one. Is Facebook really trying to keep you on their site longer by spending hours rejecting application invites? Doubt it.

That would be like Home Depot deciding to scatter random pieces of hardware and other random items throughout the floor of their store simply to have you spend more time trying to navigate to the section that has what you are looking for. Would Home Depot do that? No way! Conversely, Home Depot is in the business of making transactions whereas Facebook has very few transaction items. Facebook is more about grazing.

I spend a lot of time just browsing through my newsfeed, looking at events, groups, friends photos and friend profiles. Honestly, Facebook is like a black hole for me and I consistently get sucked into the site and find myself accomplishing nothing. How do you spend your time on Facebook? Do you think Facebook would consciously sacrifice usability for time spent?

According to MediaPost, the Electronic Privacy Information Center plans on filing an FTC complaint against Facebook regarding their SocialAds service as well as Facebook Beacon. A number of companies have been hopping on the bandwagon that was started by MoveOn.org just a few days ago.

According to the article, “‘Part of what Facebook is doing is taking from people the value of their endorsements, which traditionally is something that people can be compensated for, and selling it back to their advertisers,’ says EPIC Executive Director Marc Rotenberg.” This issue has already been brought up and questions about its legality have already been published.

Suddenly Facebook has come under fire for their new services that test the limits of user privacy. While this may eventually blow over, I think something has got to give before everything settles down. Most likely, I envision Facebook adding the global opt-out feature that a lot of users have been calling on Facebook to add to their Beacon service. Do you think these new allegations will be heard by the FTC?

Buddy Media, the owner of the AceBucks application, has just acquired the Crushes application. I haven’t reviewed the crushes application on here but it seems like a really great idea. In the application you can anonymously tell people that you have a crush on them. They can then have a conversation with you anonymously. This sounds like serious trouble which makes it a great application. It reminds me of Dan Peguine’s Honesty Box application which has been both controversial and successful.

Out of the acquisition, Buddy Media also brought on Patrick Stokes as another developer for their development team. I’m assuming that Patrick will be working with the Buddy Media team to help expand their AceBucks application which recently launched their stores feature. If you haven’t seen the AceBucks store yet, you should definitely check it out. There are some interesting items up for sale including CDs, video games, cash, jewelry e-books, computers, sports memorabilia and my favorite: a used ankle support.

While the items up for sale resemble a traditional pawn shop, the application has attracted close to half a million users and approximately 25,000 active daily users. I don’t have any statistics on the application’s transaction history but it seems as though the auctions are relatively active. I highly recommend checking out the Crushes application. If you want to read more about the announcement check the Buddy Media blog.

Yesterday one of my friends invited me to race them on Facebook. It was an entertaining invite request because the car that she wanted to race me in was a 2002 Saab 93. Today I decided to accept her request and check out the application. I was actually glad that I ended up installing the application because it is an entertaining one. When you add the application you are prompted to select a vehicle from a list of lower quality cars including a 1993 Ford Festiva, Renault Twingo, an ATV, 2003 Ford Ranger and a few others.

As many of my friends did, I chose the 2002 Saab 93 because it had the best picture. The lesson learned was never to judge a car by its picture. I ended up winning a measly 3 out of 10 races. Definitely a poor performance! The goal is straight forward. Race your friends and other Facebook members. You receive points for each race that you win and those points can be used to upgrade to new cars. Apparently you need to get 10,000 points to upgrade to the next level which is the equivalent of winning 50 races. At this pace it’s going to take me over a week to upgrade.

This application is a clever twist on the classic “kick apps” like Zombies, Vampires, Food Fight and other classic Facebook applications. I definitely recommend checking it out and racing your friends. It’s a great way to waste a few minutes of your day! If you want to race your friends, go grab the PetrolHead application.

My Car Page

Friends Car Page

Showroom Page

The battle between Facebook and ConnectU has been raging since the beginning of Facebook but only in the past year or so did the battle enter the courtroom. A new article that’s been written for the magazine 02138 has brought to light more details about the ongoing battle between Facebook and ConnectU. The details paint a new picture of Mark Zuckerberg. As Matt Marshall points out, the article brings to light conflicting statements by Mark Zuckerberg.

Last year Mark Zuckerberg was quoted as saying “There is really good documentation of this: our code base versus theirs.” In the 02318 article it appears that most of the original Facebook code has since disappeared. The story of ConnectU and Facebook is one filled with numerous conflicts among the early participants. Additionally, the article does a great job at making it sound as though Zuckerberg obviously stole the idea. Ideas are a dime a dozen though in the technology world and execution is 99 percent.

In addition to ConnectU, Zuckerberg had conversations with Aaron Greenspan, another Harvard student, about yet another Harvard social network called houseSYSTEM. Ultimately, none of the people that Zuckerberg had spoken with have anything on paper though. Sucks to be them! It also appears as though Facebook was the best designed social network among the many being developed at Harvard at the time.

Mark Zuckerberg simply meshed the ideas of the many people he was speaking with and was successful in the execution. While the 02138 article makes Zuckerberg sound like a snake, let’s be honest, competition can get ugly. So whether or not Zuckerberg stole ideas from other people he was the one that wrote the code. If you aren’t a programmer in an early stage web startup, protecting an idea can be extremely challenging. The lesson learned here: get everything on paper.

My bet is that Mark Zuckerberg reused some of the code that he used for ConnectU. Most programmers do it. How much code was really reused though? I don’t think we’ll ever know. Do you think Mark Zuckerberg stole code from ConnectU?

A couple weeks ago, Facebook unleashed SocialAds on the world. Facebook also announced their new Pages service and listed a number of launch partners. Since then, small businesses have had the opportunity to test out the new system and launch partners have begun promoting their pages via ad campaigns. So how has it turned out in the first couple weeks? While it hasn’t been horrendous, I wouldn’t yet call Facbook’s new advertising system as revolutionary. In order to developer a revolutionary advertising platform, it must not only be innovative but also deliver results.

Facebook has played with various models for promoting these new pages including a brief 24 hour placement at the top of the newsfeed yesterday that announced the new Pages service to members. That announcement included links to the Dave Matthews Band page as well as the (RED) campaign page. While I don’t have data pertaining to the daily growth of these groups, the numbers are relatively average for any sort of marketing campaign.

The Dave Matthews Band has close to 56,000 fans and the (RED) campaign has approximately 37,000 fans. While these are by no means horrible results, as a percentage of click thrus from a one day ad at the top of the newsfeed, it’s not that impressive. For comparison, The Dave Matthews Band has a whopping 300,000 members on MySpace. Time will be the true test here but it appears that the start of ad campaigns on Facebook are extremely slow but viral growth helps amass users over time.

How about small businesses, how have they been performing? Not so well according to the people that have been emailing me over the past couple weeks. The most frequent message that I get from individuals is about how their seemingly normal advertisement doesn’t get approved. Additionally, they get absolutely no feedback from Facebook simply a rejection notice. I’m not quite sure about Facebook’s policy for advertisements but the ones that users have sent me don’t seem to violate any terms that I know of.

Finally, Facebook ads have been getting a horrendous click-thru rate for most users. If you have had a positive result with Facebook SocialAds then please let me know and I’d be happy to post about your experience. I don’t want to be overly critical of Facebook but their ad performance have been relatively sub-par for all of the small business owners that I have spoken to. Perhaps that’s because the small business owners that would gain the most from this advertising system have yet to register.

I believe that the biggest growth opportunity for Facebook is in external advertisements that leverage your Facebook cookie to deliver highly relevant advertisements. Additionally, Facebook could more agressively target specific verticals such as music, movies and television. The main problem there is that they will be duplicating AOL’s model and that’s the last thing Facebook wants to become. How do you think Facebook could improve their advertising system? Is their existing system enough?

Earlier today, USA Today published an article about widgets on the web. The interesting thing is that many of the “widgets” that they referenced were actually Facebook applications. Are widgets different than Facebook applications? I sure think so. According to Wikipedia, a web widget is “a portable chunk of code that can be installed and executed within any separate HTML-based web page by an end user without requiring additional compilation.”

The key is that a web widget is portable. Among the top applications on Facebook, the majority appear to be widgets. I don’t actually think all of these applications are actually widgets though since they can’t be exported to other sites. Content that appears on your Facebook profile won’t be able to show up on your blog. In theory the “Fun Wall” application should be able to display content posted by people that visit your blog as well as your Facebook page.

The main point of the article was that widgets have been a great way for many unsuccessful web entities to increase their exposure. Widgets help you quickly extend your distribution throughout the social web. It’s as easy as that. Facebook applications and other social applications are not as easily distributed. So is it better to build a social application or a widget? I think applications are better because you can get a larger user base per instance. Conversely, the net number of impressions of a widget can significantly dwarf a social application. So which do you prefer, widgets or applications?

Cory Doctrow has written an interesting piece for Information Week in which he describes Facebook’s downfall as well as the downfall of any social network. According to Doctrow, “Adding more users to a social network increases the probability that it will put you in an awkward social circumstance.” I completely agree with this being one of the primary downfalls of many social networks.

The only flaw with this theory is that each of the social networks can develop tools that make the socially awkward moments less likely. Features that include the grouping features that I have been touting for the past few months as well as advanced privacy settings similar to the ones already provided by Facebook. As social networks evolve, systems will be put in place that protect the users and eventually we will have access to close to perfect social networking tools similar to the ones envisioned by Cory Doctrow’s fiancee:

My fiancee once proposed a “social scheduling” application that would watch your phone and email and IM to figure out who your pals were and give you a little alert if too much time passed without your reaching out to say hello and keep the coals of your relationship aglow.

I have been looking for this type of tool since I read the book “Never Eat Alone” by Keith Ferazzi in January 2006. Looks like I should have just gone out and built the system since it still hasn’t been built. I have a feeling that the new mobile SDKs being provided by Apple, Verizon and Google will help us build a social scheduling application that integrates with existing social utilities.

Regardless, I think Cory’s article is accurate for the social networks of the past (and a few present) but the problem that Cory portrays won’t exist in future social networks. Do you have any socially awkward moments that have forced you to consider leaving Facebook?

Yesterday I wrote about how the Facebook and ABC News partnership was receiving a lot of negative press. I even called the partnership irrelevant. Soon after I received an e-mail from Facebook’s communications department stating “your posting seemed to talk mainly about content distribution. The partnership is actually about starting and ongoing debate and discussion about the presidential election—both on Facebook with the US Politics application and in a real-world, televised debate on Jan. 5.”

Perhaps I missed some of the details surrounding the partnership but my position still stands: Facebook users don’t want to spend their time on Facebook discussing politics for the most part. I still stand by that position. Today, Facebook began promoting their politics application again via the newsfeed to try to encourage users to become more active. While I think this is a great idea I don’t think it’s going to hold. As always, it is easier to be a pessimist so perhaps this will eventually work.

The funny thing is that yesterday, one of the Facebook corporate communications representatives emphasized the telvised debate coming up on January 5th but I couldn’t find any mention of the debate anywhere on the application. Honestly, I just go to the traditional news sites as well as Memeorandum to keep up to date on what’s going on in politics. Do you think the Facebook politics application will gain any traction?