Looks like the movement by MoveOn and other privacy groups have really struck a chord with Facebook (Addendum: it looks like a few other organizations, such as Electronic Privacy Information Center and the Center for Digital Democracy are filing motions with the Federal Trade Commission on the basis of privacy violations, which probably has some teeth to it as well) . According to Businessweek they are in fact re-thinking their “once-in-a-hundred-years” advertising revolution as a privacy blunder.
This is good news for everyone, of course, except for Facebook, who has yet to really monetize itself in earnest, and more importantly was really betting the farm on this play. Rather, they were using the hype *from* Facebook Beacon and its social ads to pump up its theoretical evaluation to score a huge infusion of cash from Microsoft, and huge deals with Fortune 500 companies as well.
What will be interesting *now* of course, is if Facebook Beacon does crumble, how *will* it affect the deals it cut? Will any of them expect a (partial) refund? (perhaps a “restructuring” of their initial deal) And if it does affect the perception of this “advertising revolution”, will it in turn affect Facebook’s theoretical evaluation?
I think the answer the latter is “almost certainly”, because while everyone will acknowledge how fast its growing, clearly much of the overage that Microsoft paid for a foot-hold (a 1.6% foot-hold) onto Mount Facebook is *because* of the social ads platform and the hype-therein (which, I think, shows what kind of showman Mark Zuckerburg really is).
What’s also kind of interesting, of course, is looking in retrospect how much of its new evaluation will $240M buy.
(Methinks the answer is “probably much more than 1%”).
November 29th, 2007 at 12:00 pm | Permalink
[...] Tony Hung has a good run down of possible futures for Facebook if Beacon crumbles. [...]
November 29th, 2007 at 1:46 pm | Permalink
You wonder how Facebook launched Beacon without getting a really good handle on how users and privacy groups would respond. You have to believe they were caught with their pants down judging by how they’ve reacted and what they’ve done since the big show in NYC.
November 29th, 2007 at 6:31 pm | Permalink
I, for one, am not afraid to say that I have enjoyed the egg that has broken all over Facebook in this matter, after Mark Zuckerburg had proclaimed Facebook Beacon to be a once-in-a-hundred-year paradigm shift. :)
November 29th, 2007 at 9:13 pm | Permalink
[...] I am here to talk about is something that Tony Hung mentioned in a post earlier this morning about the whole Beacon advertising platform on Facebook and how this ad program was a principal [...]
November 30th, 2007 at 10:31 am | Permalink
[...] If Facebook’s Beacon Crumbles, Will That Change Its Evaluation? Electronic Privacy Information Center and the Center for Digital Democracy are filing motions with the Federal Trade Commission on the basis of privacy violations (tags: facebook privacy ftc legal) [...]
December 1st, 2007 at 1:14 pm | Permalink
[...] this point, I feel the lofty valuation of Facebook is definitely somewhat tainted. The mind reels: did Google get a preview of this Beacon stuff, feel it was too creepy - and [...]