Countdown to the Death of Facebook?

I read an interesting post on Fortune about how Facebook’s new advertising system (dubbed Beacon) has been a public relations nightmare for the young company. The author of that article wittily said that Facebook hasn’t jumped the shark, they’re being devoured by the shark. 1 point for cleverness.

He went on to say that the death clock for the social networking site has started. People are already leaving in droves, and the moment something every remotely as good comes along, Facebook’s valuation will fall faster than… (insert own analogy here of something that falls rapidly).

Umm, I’m not sure about that. The vast majority of Facebook users don’t know what Beacon is, and couldn’t care less. And when you really stop and think about what Beacon is, versus simply making up the Big Brother scenario, it’s not that bad.

For those of you who don’t know what Beacon is, here’s the 60 second synopsis. Facebook developed an advertising system that allows you to recommend products to your friends as you buy them. So you go to Walmart.com, and buy a sweater. And if you want your friends on Facebook to know you bought this sweater, right from the Walmart.com site you can click an ”Add This to My Facebook” button and have them notified. i.e.: “Jacob just bought a sweater from Walmart.com for $9.99. Click here to buy one too.”

And over something as simple as that, the Internet erupted with screams of “invasion of privacy!”

What’s scared everyone is two things. One, advertisers are now watching what you BUY and recommending products to you based on that. We already live in a society where companies such as Google/Doubleclick track you from site to site, and put together a profile on you to target ads they think you will like based on your web surfing habits.

This is basically tracking your online purchases. If you buy a sweater, gloves, and a coat, Facebook will know you will likely want to buy a snowboard and show you those ads. If you buy medication from an online pharmacy, they’ll target you based on that too.

The other thing that’s scaring people is the personalization of the ads. Basically, they’re turning you into a spokesperson for a product to your friends. You purchased this, and now they can use your name and picture to tell your friends to buy something.

Is it a bit creepy? Has the potential to be. Advertisers aren’t dumb. If you get an email from an actual friend, you are more likely to click on it and read it than a spam email. If you see your friends face in an advertisement, you’re more likely to read and think about that content than any other random ad.

So, I think it’s far far to early to say that Facebook is inevitably dying. But certainly as marketers come up with more and more clever ways to advertise to people, turning the social experience into one that profits, people will inevitably start to protest against this invasion on what to them should be a pure ad-free experience – them interacting with their friends.

As Mark Twain once said, “The accounts of my death have been greatly exaggerated.”