Based on all the hyperbole being spewed about Facebook’s recently-launched Beacon program from asinine FTC complaints to political activism run amok (and that’s my liberal friend Scott’s point of view) one would think that Facebook’s Beacon program was the spawn of the devil. I’ve heard creepy, nightmare, scary, invasive all used to describe Beacon. But when examined, I think you might agree that not only is Beacon a logical extension of what Facebook was already doing, but more importantly something that vast majority of Facebook users will embrace.

[Ed. Note: I am speaking at Web Community Forum's conference Community Building in the Age of Facebook next week Dec. 5th and 6th in Seattle]

How exactly does this supposed affront to mankind Beacon work?

Beacon simply is a way for online activities outside of Facebook to be shared with your friends inside Facebook via the News Feed. Doesn’t exactly get my emotions riled up either, does it?

Let’s see what it looks like in action. First, you have to be a Facebook user for any of this to matter. Second, you have to be actively logged into Facebook when visiting others sites. So unless you’re keeping Facebook open in the background or another tab in your browser, you’ve got nothing to worry about (even if it were worth worrying about).

Once DC special interest groups start jumping in on the bach Facebook and Beacon bandwagon, I wondered if the hyperbole around this issue was due to folks missing the salient point about needing to be a Facebook user. Facebook can’t share your online actions with your Facebook friends unless you’re a member of Facebook. So all you big brother conspiracy believers take a deep breath – you are safe.

OK so you’re a Facebook user like me and you decide to visit a Facebook Beacon partner’s website. Here’s a list of the initial Beacon partners:

AllPosters.com, Blockbuster, Bluefly.com, CBS Interactive (CBSSports.com & Dotspotter), eBay, ExpoTV, Fandango, Gamefly, Hotwire, IAC (College Humor, Busted Tees, iWon, CitySearch, Pronto.com and echomusic), Joost, Kiva, Kongregate, LiveJournal, Live Nation, Mercantila, National Basketball Association, NYTimes.com, Overstock.com, (RED), Redlight, SeamlessWeb, Sony Online Entertainment LLC, Sony Pictures, STA Travel, The Knot, TripAdvisor, Travel Ticker, Travelocity, TypePad, viagogo, Vox, Yelp, WeddingChannel.com and Zappos.com

Once you visit a Beacon site (like I and a friend did yesterday to play with Beacon) and complete a targeted action (as determined by the host site) – the following “slider” appears (it’s actual size here). To me at least, this notice is very reminiscent of the notices that Entourage or Outlook popup in the lower right of your screen when you get a new email:

Since I wanted to share this Facebook I hit Close instead of No Thanks. So I ventured over to Facebook to see what would happen on Facebook. And here’s what happens on your Facebook homepage aka News Feed:

Once you hit OK that action gets posted as news in both your Mini-Feed on your personal profile page as well as potentially on your friends News Feed. Here’s what posts on a Mini-Feed look like:

or

And sooner or later the item appears in your friends News Feed. News feed items look like:

Dave McClure does a similar analysis in case you want to see another example of the same process.

You Mean That’s it? That’s all Beacon does? So the big deal is what exactly?

Now you’re getting it. Let’s review the main point of misplaced angst: Can Users Control their Beacon News?

YES. Of-course and they always have been able to. Not one, Not two, but yes THREE opt-out opportunities exist.

First, the notice that appears when you do a targeted action on a Beacon partner site. If you understand what “No Thanks” means and actually pay attention to notices that appear on your screen then it’s a reasonable opt-out. It is certainly no different language then the opt-out i get on every adobe reader upgrade trying to goad me into downloading the Google toolbar. That same notice even includes a link called Learn More to a pretty informative page on Kongregate’s site that includes the links to block the items from showing on Facebook in case you change your mind.

Second, there is the notice that appears on your Facebook home page aka News Feed. Now this time there are two different opt-outs – a big honking “Okay” button and a separate “Remove” button (meant more for removing an item if multiple items are potentially going to be published to your profile.

And if that weren’t enough – there’s the ability to Opt-out on a Beacon partner-by-partner basis permanently (as well as permanently opt-in for what its worth). Here’s the link and image of that screen. You’ll notice that you have 3 options – Opt-out forever from this partner, Opt-in forever or the default ask my everytime an action might be reported on my profile. Again pretty straightforward.

Now there were some complaints about these notices in their initial versions about how easy it was for users to opt-out. Examples of Christmas gifts being bought and being broadcast to their recipient was one notable. So Facebook rolled some changes yesterday to make it easier for users to opt-out (aka hit the No Thanks link). Personally given the above, if users can’t figure what’s going on and they allow their actions to be published in Facebook, then it’s their own darn fault. C’mon folks take some responsibility here. Anyway for more on the changes start here. The images on this post represent what the notices look like post-changes. If you compare them to the pre-rollout you’ll find some subtle differences the biggest being that the expanded notice is shown by default especially the one on the homepage aka News Feed. (Dave McClure’s images show the prior versions).

Why Beacon will grow to be loved and admired and a key part of Facebook’s Success

The most obvious reason for users to join Facebook is to connect with their friends, colleagues, acquaintances and family. If it was just about keeping one’s address book up to date Plaxo would be what Facebook is today. The genius of Facebook was the creation of the News Feed. What the News Feed figured out is that by automatically notifying your circle of friends of what you were up to as well as telling you what your friends were up to – you could keep in touch without having really to do anything except interact with Facebook.

Now when the News Feed launched – a similar level of controversy erupted as we’re seeing around Beacon as Justin over at Inside Facebook noted. But as users realized the benefit of having their information shared and its ability to provide context about individuals, the controversy died and Facebook’s growth took off (3 to 5x depending on what start date you use). Facebook figured out that people are too busy and distracted to keep everyone informed as to what they’re up to. Sure folks could constantly update their Facebook status and many do but that requires proactive behavior. It’s a lot easier in a passive system for information to be shared. So when a user makes a change to their Facebook profile – it’s automatically projected across their friends. That’s not a privacy issue since if you wanted to remain private you never would have signed up for Facebook in the first place.

So first Facebook’s News Feed focused on the promoting profile changes – updated photos, changes in address, new friends being added, events attending. Then when Facebook’s application platform rolled out – Facebook starting broadcasting the actions of users from those applications. So if you added TripAdvisor’s Cities I’ve Visited app – everytime you added a new city – that was broadcast across your friends’ News Feed. And we know what happened – the Facebook application platform became the fastest growing user engagement environment the Internet has ever seen.

A key part of the success was how users actions were being shared or perhaps said promoted to their friends. Discovering new apps inside Facebook was revolutionized by the News Feed as Facebook effectively figured out how to build the world’s first passive word of mouth marketing platform. Users weren’t endorsing products by writing reviews as in the more traditional way people think of online word of mouth marketing. Instead just the act of engaging with a service or application was a viable way to promote them. And from a user’s perspective it created a powerful way to see what your friends were interested in and up to – by passively getting a chance to observe their Facebook behaviors. So when your friends added the iLike music app – you could see what music they really liked by how they interacted with iLike and having that reported in your News Feed. So instead of being limited to the 3 bands they proactively listed on their profile page – you were able to see and learn about the 300 bands they actually listened to providing a much stronger and more interesting insights into your friend’s tastes.

In that context, Facebook Beacon becomes the logical next step. The Facebook application platform demonstrated that user’s behaviors and engagement with online applications is interesting to users. There was no controversy over Facebook apps’ behaviors being broadcast in News Feeds so the logical extension is to include web services outside of Facebook proper. Then users will be able to get an even richer view of their friends as they interact with services in the Beacon program they’ll learn more – oh Austen bought a plane ticket to Hawaii – I should give him some tips from my last trip. Oh Todd’s really into online gaming – I know a site i should recommend to him.

Yes Facebook is starting out with commercial sites and they are paying Facebook for including their user’s actions in the Facebook News Feed. But commercial doesn’t mean evil. Facebook has to figure out how to monetize its users and since users don’t click on banner ads inside Facebook they are looking at other ideas. And since the Facebook applications showed that users will click on links and News Feed items published by those Apps – its worth seeing if users will click on those commercial actions being broadcast. So its paid relationship – being commercial doesn’t mean being evil. Facebook and its commercial partners aren’t creating user actions so the actions are authentic. And like in Google with their paid listings, the search results are still authentic. It’s just as Overture figured out way back in the beginning of paid search, commercial value is a pretty good proxy for determining what’s useful and valuable to users. Facebook had to start somewhere with regards to what actions it included and effectively its letting the marketplace figure out for them what actions are valuable. Do I expect Facebook to open an API and eventually let non-commercial entities publish actions to Facebook – yes I do.

The Conclusion: Thumps Up for Beacon

Opening up Facebook’s News Feed via Beacon to the world of actions outside of Facebook is a genius of an idea. And as it provides valuable information about individuals with regards to their interests and status, users will come to embrace it much like they did the original News Feed. Yes Facebook needs to respect users choices. And as the online population shifts to a model of how do I share about myself vs. how do I protect myself, Facebook has planted itself as the company who not only has the product to take advantage of that trend but perhaps the platform to actual make a business out of it (beyond just showing standard ads). Facebook might just yet hit Lee Lorenzen’s $100 billion valuation for the company.