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%”).