In the past week, Facebook has made changes to Beacon based on the flurry of news articles and blog posts against it. Consent is now required to share information about the online purchases made, and control is again given to the user on how much information is shared with others.

The idea that a company can come in and with some behind the scenes technical maneuvering, share your personal information with others, is scary. Even if it’s with your approved social network. Jonathan Trenn came up with some great examples of how Beacon goes against user privacy. And, I agree with him.

As with any company or consulting firm, the most important thing to ask is whether or not you are providing value and serving your audience, client, or consumer. Facebook received so much heat for Beacon because they violated that value aspect with their community.

The Trust Factor

The user certainly wasn’t considered when Facebook developed its options for deleting an account. According to CK not a single one of the generated options for “why do you want to leave Facebook” includes privacy issues. Even after countless articles and blog posts, Facebook is choosing not to listen or offer up any concession that the privacy problems may in fact contribute to a loss of users. By acknowledging the issue, and addressing it, trust can be regained with the user. Without that admission and solution, users are more likely to bail on you, and on the product.

On the issue of trust, Valeria Maltoni has some great insight into the power of trust and brands with marketing. The idea that marketers are able to “engineer a viral campaign” through your personal social network shows that some companies are more interested in building up referrals, even those that are not rightfully earned. Valeria also says that,

The most valuable asset in todays’ brands is “trust” and “the perception that information manipulation may violate someone’s privacy leads to loss of trust.”

An honest and passionate review of a product will be more highly regarded than a randomly generated clip of information on what you have purchased, especially given that information was obtained behind your back.

Now What?

One of the most interesting things about this whole situation is the fact that it seems Facebook hasn’t appealed to its community at all, neither publicly addressing or acknowledging their mistake or the steps taken to correct it. When the newsfeed issue came up last year, an “open letter” from Mark Zuckerberg was sent out to users explaining the thoughts behind the newsfeed and what was being done to rectify the situation. No such letter has appeared this time (although some have tried to imagine what it should say), which is a huge mistake.

This is a prime example of crisis communications and leaves people wondering where Facebook’s PR team is and what counsel they are providing. Right now is the time for open communication, authenticity, and transparency - all key components of social networking and social marketing. It seems that Facebook is fleeing the very market and community that it has created by ignoring those components.

While Facebook has tried to fix the Beacon issue by providing “opt-in” features for the information transfer, they are still missing the very key element of the whole situation, communicating with the user community. It seems that Facebook’s fatal flaw of late is the fact that they are more concerned with appeasing the companies and securing the advertising revenue generated from Beacon, and that my friends, could end up being the cause of their eventual demise.

UPDATE: According to TechCrunch, Mark Zuckerberg and Facebook have finally listened and issued an apology via their blog. Is it too late though?