Facebook, which is run by Mark Zuckerberg, 23, who created it while an undergraduate at Harvard, has built a highly successful service that is free to its more than 50 million active members. But now the company is trying to figure out how to translate this popularity into profit. Like so many Internet ventures, it is counting heavily on advertising revenue.  The system Facebook introduced this month, called Beacon, is viewed as an important test of online tracking, a popular advertising tactic that usually takes place behind the scenes, where consumers do not notice it. Companies like Google, AOL and Microsoft routinely track where people are going online and send them ads based on the sites they have visited and the searches they have conducted.  But Facebook is taking a far more transparent and personal approach, sending news alerts to users’ friends about the goods and services they buy and view online.  Charlene Li, an analyst at Forrester Research, said she was surprised to find that her purchase of a table on Overstock.com was added to her News Feed, a Facebook feature that broadcasts users’ activities to their friends on the site. She says she did not see an opt-out box.  “Beacon crosses the line to being Big Brother,” she said, “It’s a very, very thin line.”  Facebook executives say the people who are complaining are a marginal minority. With time, Facebook says, users will accept Beacon, which Facebook views as an extension of the type of book and movie recommendations that members routinely volunteer on their profile pages. The Beacon notices are “based on getting into the conversations that are already happening between people,” Mr. Zuckerberg said when he introduced Beacon in New York on Nov. 6.  “Whenever we innovate and create great new experiences and new features, if they are not well understood at the outset, one thing we need to do is give people an opportunity to interact with them,” said Chamath Palihapitiya, a vice president at Facebook. “After a while, they fall in love with them.”  Mr. Palihapitiya was referring to Facebook’s controversial introduction of the News Feed feature last year. More than 700,000 people protested that feature, and Mr. Zuckerberg publicly apologized for aspects of it. However, Facebook did not remove the feature, and eventually users came to like it, Mr. Palihapitiya said. He said Facebook would not add a universal opt-out to Beacon, as many members have requested.  MoveOn.org started the anti-Beacon petition on Nov. 20, and as of last night more than 50,000 Facebook users had signed it. Other groups fighting Beacon have about 10,000 members in total. Facebook, they say, should not be following them around the Web, especially without their permission.  The complaints may seem paradoxical, given that the so-called Facebook generation is known for its willingness to divulge personal details on the Internet. But even some high school and college-age users of the site, who freely write about their love lives and drunken escapades, are protesting.  “We know we don’t have a right to privacy, but there still should be a certain morality here, a certain level of what is private in our lives,” said Tricia Bushnell, a 25-year-old in Los Angeles, who has used Facebook since her college days at Bucknell. “Just because I belong to Facebook, do I now have to be careful about everything else I do on the Internet?”  Two privacy groups said this week that they were preparing to file privacy complaints about the system with the Federal Trade Commission. Among online merchants, Overstock.com has decided to stop running Facebook’s Beacon program on its site until it becomes an opt-in program. And as the MoveOn.org campaign has grown over the past week, some ad executives have poked fun at Facebook users.  “Isn’t this community getting a little hypocritical?” said Chad Stoller, director of emerging platforms at Organic, a digital advertising agency. “Now, all of a sudden, they don’t want to share something?”  Facebook users each get a home page where they can volunteer information like their age, hometown, college and religion. People can post photos and write messages on their pages and on their friends’ pages.  Under Beacon, when Facebook members purchase movie tickets on Fandango.com, for example, Facebook sends a notice about what movie they are seeing in the News Feed on all of their friends’ pages. If a user saves a recipe on Epicurious.com or rates travel venues on NYTimes.com, friends are also notified. There is an opt-out box that appears for a few seconds, but users complain that it is hard to find. Mr. Palihapitiya said Facebook is making the boxes larger and holding them on the Web pages longer.  Mr. Green of MoveOn.org said that his group would be tracking the effects of the latest changes before deciding if it would still push for a universal opt-out.  The whole purpose of Beacon is to allow advertisers to run ads next to these purchase messages. A message about someone’s purchase on Travelocity might run alongside an airline or hotel ad, for example. Mr. Zuckerberg has heralded the new ads as being like a “recommendation from a trusted friend.”  But Facebook users say they do not want to endorse products.  “Just because I use a Web site, doesn’t mean I want to tell my friends about it,” said Annie Kadala, a 23-year old student at the University of North Carolina at Chapel Hill. “Maybe I used that Web site because it was cheaper.”  Ms. Kadala found out about Beacon on Thanksgiving day when her News Feed told her that her sister had purchased the Harry Potter “Scene It?” game.  “I said, ‘Susan, did you buy me this game for Christmas?’” Ms. Kadala recalled. “I don’t want to know what people are getting me for Christmas.”
Faced with its second mass protest by members in its short life span, Facebook is reining in some aspects of a controversial new advertising program.