Facebook Beacon remains one of the blackest marks in the history of the social network, which was a mere fledgling when it launched the moneymaking initiative in November 2007.
Beacon sucked in data from external websites and posted those activities to a user's wall. The idea was to promote the merchants users chose to shop at. In Facebook's press release about the Beacon launch, which included 44 partners, the company called Beacon "a core element of the Facebook Ads system."
But Facebook members found their online purchases posted to their profiles without their consent; they had to choose to opt out. Forrester Research analyst Charlene Li blogged that her purchase of a coffee table on Overstock.com was added to her Facebook wall without any prior warning.
"In the present day, Facebook has set the expectation that things are public," Li told CNNMoney in an interview last week. "But in 2007, we users were under the assumption that we were in control. So it was shocking."
A commenter named Will posted on Li's blog: "I purchased a diamond engagement ring set from Overstock in preparation for a New Year's surprise for my girlfriend...Within hours, I received [phone calls of] 'congratulations' for getting engaged.... I learned that Overstock had published the details of my purchase (including a link to the item and its price) on my public Facebook newsfeed, as well as notifications to all of my friends... including my girlfriend."
Li says she wasn't able to confirm the story, as Will left no contact information -- but the tale soon spread around the Internet.
Then Facebook users started complaining their purchases were posted to their walls even after they explicitly opted out. On November 29, the New York Times quoted a Facebook executive insisting that users were able to opt out of the Beacon program entirely. But that same day, security researcher Stefan Berteau published a note saying he'd found that data was still being collected and sent to Facebook -- even if users had opted out of Beacon and/or were logged out of Facebook.
Less than one month after Beacon's launch, Facebook changed Beacon to an opt-in system and added a privacy setting to turn Beacon off completely. Facebook CEO Mark Zuckerberg posted an apology on the company blog: "We've made a lot of mistakes building this feature, but we've made even more with how we've handled them. We simply did a bad job with this release, and I apologize for it."
Beacon was the target of a lawsuit filed in 2008, and the service shut down in September 2009.