12/04/07

UPDATE (12/19/07): One last update on this story, then I’ve had enough. Forbes ran a piece this week entitled How Silicon Valley Says ‘Sorry’—in which it concludes “apologizing pays.” Well, despite the fact that, according to an Edelman PR survey it cites that found technology ranked at the top of a list of “most trusted” industries, ahead of businesses like banking, telecommunications, and healthcare, I still say Facebook waited too long for this apology—and that the firm lost valuable reputation points in doing so.

UPDATE (12/14/07): The Wall Street Journal ran a great commentary piece on this topic.  Here’s how the IAB Smart Brief summarized it: ”Facebook Dustup Shows the Market Works - When Facebook tried to roll out an advertising service that included news feeds of member e-commerce activity, users revolted and the company changed its policy. IAB President-CEO Randall Rothenberg writes in a Wall Street Journal commentary, ‘The Facebook imbroglio is an almost-perfect representation of the power of the Internet to mobilize people to change the Web for the better.’ Rothenberg argues that the Facebook example also makes the case against government regulation of online marketing, since market forces have a self-correcting effect.” And here’s another look at this controversy, this one from the Knowledge@Wharton Marketing site: Who Owns You? Finding a Balance Between Online Privacy and Targeted Advertising.

UPDATE (12/5/07): Zuckerberg Admits to Failure (NY Times)

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ORIGINAL POST (12/4/07): For a company that’s flying so high, you’d sure think they could run their PR better. With the rapidly building negative story about Facebook’s Beacon program for advertisers, the lack of any statement from the company’s chief executive is becoming more and more painfully obvious. Overnight, top blogger Robert Scoble called the company out on this glaring problem, and I totally agree with him. Now is not the time to be silent.

Surely, Facebook has professional PR advisers within the company, or in its outside PR agency, that are advising CEO Mark Zuckerberg to speak—as in apologize—about the mistake it made in undermining user privacy. But nothing is forthcoming as of early morning December 4.  To make matters worse, it’s now come out that web-surfing data for Facebook users who are not online, or even those with closed Facebook accounts, is also being fed to web sites that sign on as Beacon participants—not just current, online users. The company has responded to that, however, saying such data was part of Beacon, but it is deleted.

The big response, though, to the question of seemingly violating the privacy of its users’ data—which is a major, building story that refuses to go away—has been amazingly slow in coming.  We’ll likely see that changing today.  But, for a company that operates at Web 2.0 speed, this slow reaction time is major egg-on-the-face for the company’s reputation.  It’s a classic case history for Crisis Communications practitioners to cite in how not to manage such a problem.  Was there some reason Zuckerberg or another senior exec could not have met with the press and bloggers late yesterday? Was there a party they had to attend, or was Zuckerberg’s girlfriend in town again? (That’s an excuse he used once before.) What do you think? Tell us in the comments area below.