Facebook forced to reverse plans on Beacon

It seems so logical a business plan; you create a social networking site. Put in effort, put in a lot of useful features, and you start to get a lot of good publicity. People start pouring in, and you start salivating about how to use these large number of people. You get the perfect method, based on advertising. Everything seems fine, and then suddenly there is a large amount of uproar about the loss of privacy implied in this feature, and reluctantly, you have to withdraw the feature. And this is exactly what Facebook had to do over the 'Beacon' feature it introduced.

Facebook is giving members of its social network the ability to completely decline participating in the company's controversial Beacon ad system, a reaction to intense criticism that Beacon is too intrusive and compromises people's privacy. Beacon, part of the company's new ad platform, tracks certain actions of Facebook users on some external sites, like Blockbuster and Fandango, in order to report those actions back to users' Facebook friends network.
The idea is to generate advertising that is more effective because it is intricately combined with people's social circle, so that products and services are promoted in a more organic way via the actions of friends and family.

In this case, the analysis found that Beacon gathered a web of data about the activities of the user even under certain circumstances. For example, Beacon tracks users even if they are logged off from the social-networking site and have declined having their activities broadcast to friends. Beacon captures detailed data including for users who have never signed up to Facebook (but who are transacting on partner sites) or have deactivated their accounts.
Facebook went too far in terms of gathering and using data; however, this is also an example of how even the most fervent supporters can turn against you if they feel that they are being exploited - a sort of warning to developers of such sites.