Mark Zuckerberg, founder and CEO of Facebook, said that the social networking company is still committed to its Beacon advertising system despite past missteps, and predicted that it will evolve to be a good feature in an interview with CBS's 60 Minutes.
"It might take some work for us to get this exactly right," he said in the interview, released in part by the news magazine show. "This is something we think is going to be a really good thing. I actually think [our ads] make [Facebook] less commercial. What would you rather see? A banner ad from Bloomingdale's or that one of your friends bought a scarf?"
He went on to tell correspondent Lesley Stahl that Facebook has to generate revenue in some way to support its 400 employees and make a profit. He also said that a public stock offering is "highly unlikely" this year.
After protests against its Beacon advertising system late last year, Facebook in December announced plans to let users "turn it off." The system captures data on what users do and buy on external sites and sends the information back to Beacon.
Just days before Facebook adjusted the privacy setting to allow users to turn Beacon off, a security researcher revealed that the ad system was tracking user activities on third-party partner sites for people who never signed up with Facebook or who had deactivated their accounts.
Michael Arrington, a blogger at TechCrunch, argued that while Facebook has resolved the problems with the Beacon system -- that users were unwittingly sharing information about items they bought with their friends -- another problem still exists.
"The second problem hasn't been resolved," he wrote. "Facebook is allowing advertisers to use user images and names in their ads. So if one of your friends adds a third-party application, you may see an advertisement that shows their picture, prints their name and says that they've added the application. All of this may be in violation of publicity rights in place in many states that prohibit the commercial exploitation of a person's image and likeness without permission or contractual compensation."
Arrington went on to say that one of his blog's readers had seen in his Facebook profile that Arrington had downloaded an application from Blockbuster. The information was posted directly on top of an ad for a movie, he said. The reader wondered if Arrington was affiliated with the application or the movie.
"As far as I can tell there is no point where users are agreeing to the use of their image and name in advertisements, explicitly or even buried in the terms and conditions of the site," Arrington added. "Whether or not it violates people's privacy rights is a legal issue, and one that doesn't appear to have been pushed to the lawyers yet. But the ice is rather thin, and Facebook is treading away."