Facebook Beacon: A Test of Web Users

When Chris Kelly spoke at an event earlier this week in D.C., he mentioned that Facebook Beacon was simply in beta and they were testing out the response of users. As Ethan Zuckerman has pointed out, the response may not be that great and ultimately their new Beacon service could ultimately backfire. Ultimately, Facebook has crossed a privacy boundry and it is up to the users of the system to accept or reject the new program.

Facebook is playing it smart. By having a select few participants in the new system, there isn’t widespread backlash. Instead, users are being eased into this new way of thinking. From a marketing standpoint, this is genius. It is also necessary. If this new system fails for Facebook, a large portion of their perceived value may disappear. If it works, their value will skyrocket. Facebook is gambling big and Microsoft is bankrolling it. Of course Facebook Beacon isn’t the only valuable service being provided by the rapidly growing social tool.

As I suggested in my last post, Facebook needs to release their external advertising service soon. Given their low click-thru rates on ads, a risky behavioral tracking tool (Beacon), what else does Facebook have outside of their rapidly growing user base? They have the only social platform on the web but that’s about to change. Facebook has the opportunity to be worth billions of dollars but they are going to need to prove their value. As Henry Blodget pointed out yesterday, they are already having troubles doing so with wall street. Do you think Facebook Beacon is invasive?