Saturday, December 1, 2007

FaceBook's CPO Should Step Down

Facebook announced this morning that they are in the process of modifying Beacon, their advertising service, so your shopping decisions will no longer be broadcast to your friends on Facebook, and your privacy re-respected.

This is a step in the right direction - and a big win for and Internet activism. But Facebook's Chief Privacy Officer, Chris Kelly, should never have allowed Beacon to become a "consumer purchase broadcasting system" in the first place.

Try this simple test. Imagine you're at your local supermarket. You've finished shopping and you're placing stuff on the conveyor belt at the checkout counter, when suddenly the checkout clerk grabs a microphone and starts reading out the labels on your choices, item by item, broadcasting this information to every other person in the store.

Here's what your neighbors get to hear: Your food choices - including the items you just purchased for your special needs diabetic child. Your personal hygiene buying decisions. Your choice of magazines. Your alcohol and tobacco purchases. The flowers just just bought - hey, where is your wife? Are they really for her?

For a company that produces some pretty cool software, Beacon is about as uncool as it gets. Though there exist some obvious legal limits as to what can be broadcast - pharmaceutical or birth control purchases, medical treatments, insurance - there are still plenty of purchasing decisions that many of us would prefer remain private.

Example - the Facebook-Fandango link. I doubt that many people really want *all* of their friends knowing *all* of their content choices...

Everyone understands that Facebook needs to make money in order to keep operating. No reasonable person would deny that advertising is the right business model. But Beacon was really a step too far.

Everyone knows - and most people accept - that when you search on one of the major search engines, your actions will be tracked and recorded and added to a profile. Most people also understand that this purchasing data, like the data generated every time you shop at the supermarket, is an increasingly necessary part of business.

Without it, businesses cannot run as efficiently, or meet the needs of their customers as effectively, which ultimately means less productivity and higher pricing. That said, there is no precedent I can think of for the broadcasting of consumer purchasing choices to other consumers, either in the real world, or on the Internet.

This is the second high-profile, privacy-related incident faced by Facebook in less than a year. Authentium says: Facebook's CPO, Chris Kelly, needs to stop thinking about the bottom line and focus 100% on keeping personal information private - or he should step down and allow someone else to come in with a stronger consumer privacy focus.

In the event that you think I'm being a little harsh, Mr. Kelly had a chance to jump on the side of the consumer two days ago at the Commonwealth Club, but he presented himself as a Facebook executive first, and a consumer privacy advocate second.

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