Facebook COO Shifts Europe focus from privacy to economy -  At a recent conference in Europe, Facebook COO Sheryl Sandberg told the audience that the economy is probably more of a concern than privacy. She said so given an impending privacy law draft that would affect 27 European Union countries. Specifically, she suggested that the law could have a negative impact on the EU economy. [Image via Facebook]

Facebook has a €2.6 billion U.K. impact -  A study from Deloitte found that Facebook’s overall economic impact in the United Kingdom was €2.6 billion, or 35,200 jobs in the U.K. and 32,000 jobs in the European Union and Switzerland.

Facebook ads game categories to News Feed -  Facebook now displays the genre category below game names and stories in News Feed stories. As we reported on Inside Social Games, users might be more likely to click on games when they know more about them.

Facebook engineer creates Google hack -  An project called Focus on the User, created in part by a Facebook engineer, provides a bookmarklet that forces Google Search Plus Your World to display results from social networks besides Google+.

Causes now a standalone website – TechCrunch reported that the charity app Causes has re-launched as a standalone website.

85K Arab Facebook logins hacked – ZDnet reported that Israel and Saudi Arabia are in the midst of a hacking war, and 85,000 Arab Facebook logins are one casualty.

Washington state AG targets clickjackers -  Washington State Attorney General Rob McKenna announced suits against two companies thought to encourage clickjacking on Facebook. The suit was announced at Facebook’s Seattle office.

Facebook registers ‘FB Origin’ domain - Facebook registered several domains, .com and .biz for example, for something called FB Origin via the company MarkMonitor.  Fusible speculated that this means the company is set to launch a new product along with Timeline apps.

Facebook today introduced an updated version of its app permissions dialog that makes it clearer what an app will do, what information it can access and who it shares activity with after being installed. According to a post on the company’s Developer Blog, the new dialog will be mandatory for all apps on Feb. 15.

As the social network prepares to expand the number of Open Graph apps that can continuously publish to Ticker, News Feed and Timeline, it is taking steps to help users feel comfortable adding them. Old versions of the Auth Dialog were vague and did not provide inline controls. Many users either allowed permissions they didn’t understand and subsequently got frustrated with apps taking actions on their behalf, or they avoided adding apps all together. The new design aims to alleviate this with clear sections “About this app,” “Using this app requires” and “Who can see activity from this app on Facebook.”

Users can adjust their privacy settings for the app directly from the permissions window. Although this may lead some users to limit the groups of people it shares app activity with, it is ultimately good for the platform to provide these controls. An all-or-nothing approach could lead to backlash and impede growth.

When developers ask for extended permissions, these will show in a second dialog with the option for users to deny individual requests. Facebook is providing a section of this window to explain why the app is requesting the permissions. This is an improvement over the old dialog, which could turn off some users who did not understand why an app might want to access their photos or manage their events.

The social network revealed a similar version of the Auth Dialog for Timeline apps at f8 in September. One difference with this update is the lack of visuals. As seen below, Facebook had previously tested a permissions box that included examples of how the app would appear on a user’s profile.

Facebook also announced that it will deprecate the offline access permission. This was one of the most difficult permissions for users to understand. Eliminating it as a specific request could improve an app’s accept rate. Facebook said it will provide developers an alternative way to reset the expiration time for valid, existing access tokens. Developers who had been using the offline access permission will have until May 1 to update their apps.

A version of the old Auth Dialog, including the offline access request, is seen below. Note how unlike with the new dialog, none of the language is customized for the app.

Facebook’s “Move fast and break things” mantra was put into action again this year as the company overhauled a number of its products, introduced many new features and eliminated old functionality. Here is a month-by-month review of changes that most affected users, marketers and developers on the platform in 2011.

January

Redesigned Profiles
Facebook started the year with a new look for profile pages. With Timeline on everyone’s minds now, it can be easy to forget that 12 months ago the social network had redesigned profiles to include more photos and information at a glance, eliminating the horizontal tab structure that had been in place since 2008.

All-in-One Messaging
Users began to get access to the new Messages product, which groups all direct messages between users whether they are viewing a conversation from the inbox, chat window or mobile.

Sponsored Stories
In an effort to make advertising more relevant by including social context, Facebook introduced Sponsored Stories that allow advertisers to pay to promote activity on the site, such as likes or check-ins. The company added more Sponsored Story types in April and June.

Memorable Status Updates
Perhaps hinting at the nostalgia-inducing Timeline to come later in the year, Facebook began displaying users’ status updates and stories from the past.

Secure Browsing
Facebook started giving users the option of accessing Facebook over an encrypted connection and encouraged developers to obtain a Secure Sockets Layer certificate to make their iframe apps accessible to users with secure browsing enabled. Since then, the company has prompted users to switch to HTTPS and made SSL certificates mandatory for all developers.

February

Page Redesign
Page owners got a number of new features to help them manage their communities. These included activity notifications, “Use Facebook as a Page,” and a spam filter for comments. Fan pages were also designed to look more like the new user profiles and place pages, which displayed applications vertically on the left hand side rather than in tabs across the top. Advertisers also gained the option of driving ads to any landing tab, not just the default.

Improved Like Button 
Clicking the Like Button began sharing full-sized stories in the News Feed rather than the one-line Recent Activity stories it previously generated. This along with the Send button that came in April have replaced the Share button, which Facebook no longer supports.

Real-Time Commenting
Facebook made commenting more like chat by removing the “Post” button and instead publishing comments after a user hits “enter” on the keyboard. Since this leads to more accidental comments, Facebook later began giving users a 12-second window to edit their comment.

March

Questions
After a Q&A product similar to Quora never made it out of beta in 2010, Facebook relaunched Questions as a poll feature aimed at helping users get recommendations from their friends. Pages began using the feature to engage their fans with questions that had a more viral effect than plain-text posts.

Deals Subscription Service
Facebook seemed to be taking on Groupon when it began a new pre-paid deals service for users in select cities, but it discontinued the test in August.

April

Updated Groups
Ahead of the rumored Google+ launch, Facebook made improvements to its Groups product aimed at helping people share with subsets of their friends. Most notably, group admins gained the ability to approve people before they are added to the group. Users could now also upload photo albums or ask Questions within groups.

Send Button
The Send button was introduced as a way for people to share articles and third-party websites with groups of friends, whereas the Like button posts to all a users’ friends.

May

New Ad Analytics
Facebook made several changes to its advertising analytics dashboard to focus on performance indicators such as Page Likes, app installs and social reach, rather than older online advertising metrics such as CPM.

Recommend This Place
The social network implemented a recommendation box on place pages (and fan pages that included an address) so that users can share their opinions about a location or a business.

Tag Pages in Photos
Users and pages gained the ability to tag other pages in photos they share on the site. This increases the reach of any given photo and builds additional connections between users and pages.

June

Happening Now: Prelude to Ticker
Facebook began testing a “Happening Now” module on the right hand side of the page. This later became the Ticker, which shows more recent activity from your friends, including comments, page likes and now Open Graph activity like listening to a song in Spotify.

July

Mandatory Credits
All developers on the Facebook platform became required to use Credits as the sole payment option for their social games. The company had announced a July 1 deadline at the beginning of the year and then added additional payment options and feedback channels for developers over the next few months to support the transition.

Video Calling and Group Chat
Teaming up with Skype, Facebook integrated video calling into its chat product. The social network also expanded group chat to friends who were not already in designated groups. Users can now add any friend to a chat conversation.

August

Revised Privacy Controls
The company simplified its privacy settings page and moved controls to the profile editor and news feed publisher. Users also gained the ability to approve tags in photos, check-ins and statuses.

Canvas App Page Changes

Facebook made several changes to the Canvas Page, bookmarking and games stories in the news feed in order to improve game discovery, retention and user experience. The redesign added a real-time activity ticker dedicated to stories about a user’s friends engaging with games.

Expanded Ads API
Facebook brought its ad API out of private beta and began allowing more developers to build tools and services that programmatically create, buy and manage Facebook ad campaigns.

Standalone Messenger App
Moving away from its all-in-one mobile application strategy, Facebook released Messenger as a separate app to rival texting and group chat alternatives.

New Locations App for Pages
Some corporations gained access to a beta product that allows them to designate multiple locations under a parent page and include a store finder on the page.

September

Timeline
At F8, Facebook unveiled a new version of user profiles that organizes stories in a timeline format, giving users the option to add life events to any point in their personal history.

Open Graph Application Platform
Along with Timeline, the company announced a new way to connect people and objects beyond the Like button. Developers will be able to make apps that let users share what they are reading, watching, listening to, cooking and more. Along with this comes “frictionless sharing” and additional avenues for app discovery.

Reconfigured News Feed
To accommodate this new type of Open Graph app, Facebook redesigned the home page to include News Feed and Ticker.

Subscribe
Facebook introduced a new one-way follow dynamic with its Subscribe button. Users can subscribe to the public updates of anyone who allows subscribers. This gives the social network a way to compete with Twitter and Google+.

Smart Lists
The social network introduced Smart Lists to automatically group users’ friends by location, workplace and school. As users become comfortable with Facebook grouping friends automatically, we could see Facebook’s algorithms creating more nuanced lists that compete with Google’s Circles feature.

October

Mobile Platform
After much speculation, the company unveiled a way to help mobile developers market their native and HTML5-based apps through its platform. Developers can now take advantage of bookmarks, requests and the news feed in the same way that Facebook canvas developers do.

Talking About This
Facebook added a new public metric to pages called “Talking About This.” This metric encourages pages to think about engagement, not just accumulating Likes.

iPad Application
Facebook released its official iPad app after months of leaks and rumors about its development.

November

Sponsored Stories in Ticker
The social network began showing Sponsored Story ads in the Ticker, signaling more lines being blurred between paid and organic content in the future. The company later told us Sponsored Story ads will be shown within the News Feed starting in 2012.

December

Timeline Goes Live
Facebook began its global release of the Timeline profile developers had gotten a preview of at F8. Timeline is still opt-in for users until sometime in early 2012. The company also debuted Timeline on mobile devices for the first time.

Coupon Test
We discovered Facebook testing a new coupon post feature for pages that could have big implications for next year. Pages that are part of this beta can offer discounts and promote them with Sponsored Stories.

Private Message Test
We have also seen the social network testing a way for users to privately message page owners. This, too, could have a big impact for people using Facebook for business in 2012.

Facebook has introduced a new About page for people to learn how advertising works on the site. Some users are seeing a notice above the News Feed directing them to the page that includes a simple breakdown of how and why Facebook shows ads, a video and answers to common questions.

The new “About Advertising on Facebook” section of the site positions ads as a way to keep the social network free for users. The page also emphasizes that ads are shown without letting advertisers know who you are. Many users are under the impression that Facebook sells personal information directly to advertisers. In reality, advertisers use the self-serve Marketplace tool or work with a representative to target audience without ever being able to identify individuals. The About page also reminds users that they can choose not to see certain ads by clicking the X in the corner.

This type of education effort is overdue, as many users who have been on the site for years have little understanding of how ads on Facebook differ from other display networks. To avoid the type of backlash it has received in the past, the company will need to continue to be proactive about helping users and members of the media understand the way the platform works now and how it will be changing, especially as it relates to advertising and user privacy. This will be particularly important as Facebook begins showing Sponsored Stories within the News Feed and likely on mobile devices.

The new About page might not be directly related to an agreement with the Data Protection Commissioner of Ireland announced today, but it is worth noting the social network committed to providing more transparency about how users are targeted by advertisers and how personal information is used for advertising to others within the next six months.

Ireland’s Office of the Data Protection Commissioner has found Facebook Ireland to be compliant with Irish and European Union law, and has reached an agreement that gives users even more control over privacy in the next six months.

The commissioner completed a three-month audit of Facebook Ireland following a formal complaint suggesting the social network was creating “shadow profiles” of non-users. Because Facebook’s international headquarters are located in Ireland, the commission there oversees the company’s legal compliance for all users outside of the United States and Canada. The audit found “positive approach and commitment” by Facebook Ireland to respect users’ privacy, but made several recommendations that the social network has committed addressing before a follow-up audit in July 2012.

These recommendations include increased control over tagging features, an update to the data use policy, sooner deletion of user and non-user data and more transparency and control over how personal data is used in advertising on the site.

With regard to “shadow profiles,” the commission determined though Facebook receives some non-user data, it is not being used to build profiles of those people. The report also states that the social network is “now taking active steps to delete any such information very quickly after it is received.”

The findings of the report are overall positive for Facebook, which many people mistrust because of the massive amounts of data it collects and new features that force users to opt out rather than opt in. How the company addresses individual recommendations from the commissioner remains to be seen, but it appears to be willing to make concessions on certain features to give users more control and satisfy watchdog agencies. According to a press release from the commissioner, “Taking a leadership position that moves from compliance with the law to the achievement of best practice is for Facebook Ireland to decide but if it continues to display the commitment I witnessed throughout the audit process it is certainly achievable.”

Last month, Facebook settled charges with the U.S. Federal Trade Commission so that any sharing-related privacy changes will now be up to users to opt into. This was in response to an action Facebook made in 2009, which forced all users to make some information public, including name, profile photo and list of friends.

The full report from the Data Protection Commissioner is available here. The social network responded to the report in a note on its Public Policy Europe page.

Facebook is testing a form of its groups product that restricts access to users with a designated .edu email address, reminiscent of the way networks operated when Facebook began in 2004. Students are being prompted to create groups for different aspects of their college experience, whether its classes, dorms, intramural sports, student organizations or parties.

The test is limited to Brown and Vanderbilt universities because they provide different email addresses for students and alumni, according to a TechCrunch post by former Inside Facebook lead writer Josh Constine. This prevents former students from infiltrating the groups, as many early adopters did when Facebook first launched.

Facebook’s existing groups product allows users to create closed and secret groups, but the company must be interested in determining the demand for even more limited groups. University groups could be a start to a broader initiative to get more people familiar with Facebook’s offerings around small-group sharing, which has been an increasingly popular topic since the launch of Google+. Facebook’s updates to groups, friend lists and privacy controls this year all promote the idea that Facebook is still a safe place to share information about yourself with your friends.

For the company whose mission is to “make the world more open and connected,” there is an ongoing question about how to balance public and private. One day they launch the subscribe feature to broadcast your status updates to a public audience. Another they bring back university-only groups. How Facebook optimizes for both openness and exclusivity in coming years will determine how much marketshare it can maintain as competing networks add new features and users.

Facebook has announced that its beginning the rollout of Timeline to users starting in New Zealand. Previously, the new interface was only available to developers.

Timeline is a redesign of the user profile that organizes all activity chronologically, with newest content appearing on top and older content being rolled into expandable month and year categories. Based on user activity and preferences, certain activities in Timeline receive more prominent placement — with bigger boxes or expanded Comments sections denoting an event that the user has designated as Highlighted or that Facebook has algorithmically determined to be of importance to the user (e.g. weddings, photos from a high school graduation, etc.).

After making Timeline available to the developer community, Facebook began experimenting with organization changes — for example, recently grouping social game high score stories under a single Games box, or recently read articles under a News box. The Maps feature also recently added location tags for photo albums.

Facebook says that over a million people have signed up for Timeline. Once live, users will have a period of time in which to curate older content for their Timeline, removing or filtering content that they may not want readily visible (e.g. college frat part photos, old relationship status updates, etc.). Facebook will also be exercising an approvals process for Open Graph apps that use Timeline, similar to what Apple practices on its App Store, to prevent spam applications from cluttering up the new user profile experience.

Read our Timeline walkthrough for more information.

The Federal Trade Commission announced a settlement with Facebook this morning over charges that the social network deceived users by failing to honor privacy agreements.

Under the agreement, Facebook:

• cannot misrepresent the privacy or security of users personal information;
• must get user consent before releasing changes that override existing privacy settings;
• must prevent people from accessing a user’s material no more than 30 days after that user has deleted their account;
• has to establish and maintain a privacy program that addresses risks that come with “the development and management” of products and services and that protects the privacy of user’s information;
• and — within 180 days and every two years afterward for the next 20 — must seek out third-party audits verifying that the privacy program is in place and that it satisfies the FTC’s order.

The agreement comes nearly two years after the American Civil Liberties Union and the Electronic Frontier Foundation raised concerns over Facebook’s 2009 changes to its privacy settings that exposed personal information — namely profile name, profile picture, list of friends, current city, gender, networks, and Pages — to a larger audience than the social network previously allowed. Earlier in 2011, it was reported that Facebook would settle with the FTC over charges that these changes deceived users and violated their privacy — making any changes that retroactively expose user data an opt-in instead of a mandatory change.

At this point, Facebook would have to take pretty intentional steps against the terms of the agreement to cause the FTC to pursue action against it again. In the last year alone, Facebook has also added or changed many features that affect privacy in ways that address the FTC’s complaint — like protecting user IDs from falling into the wrong hands.

In a Facebook response post to the agreement, Mark Zuckerberg says that he feels the platform has a positive track record for providing transparency and control over privacy settings.

“That said,” his post reads, “I’m the first to admit that we’ve made a bunch of mistakes. In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we’ve done. I also understand that many people are just naturally skeptical of what it means for hundreds of millions of people to share so much personal information online, especially using any one service.  Even if our record on privacy were perfect, I think many people would still rightfully question how their information was protected. It’s important for people to think about this, and not one day goes by when I don’t think about what it means for us to be the stewards of this community and their trust.”

Zuckerberg also announced that Erin Egan will become Chief Privacy Officer, Policy and that Michael Richter will become Chief Privacy Officer, Products.

During a media call in session with the FTC, Chairman Jon Leibowitz, Bureau of Consumer Protection Deputy Director Jessica Rich, Division of Privacy and Identity Protection Associate Director Maneesha Mithal, and Division of Privacy and Identity Protection Staff Attorney Laura Berger explained carefully that the settlement does not count as a ruling that Facebook violated the law in changing its privacy settings or that it knowingly shared private user data with advertisers. They also stressed that, while this order is very broad, it prohibits any deception about privacy in the future whenever Facebook introduces changes or updates.

Facebook, Google Pair Up to Fight Anti-Piracy Law – The House Stop Online Piracy Act proposal has brought together Facebook, Google and other companies in an effort to prevent the passing of the law that companies say will place the onus of protecting against piracy on them.

Facebook IPO Rumors Swirl – Business Insider reported that Facebook employees are reporting that CEO Mark Zuckerberg has said the IPO is coming soon, as early as next month.

Porn, Violence a Recent Problem – Facebook acknowledged to ZDnet this week a series of problems with unwanted pornographic or violent content showing up in their news feeds. The Wall Street Journal reported that it was a “coordinated spam attack” coming as the company ramps up to release Timeline.

FCC, Facebook Settle Over Privacy Issues – The Federal Trade Commission and Facebook reached a settlement over privacy issues, even as the FTC encourages people to Like them on Facebook.

Facebook’s Name Policy Hones in on Salman Rushdie - Writer Salman Rushdie became a target for Facebook’s real name policy this week. After the author took to Twitter to protest the deactivation of his account, the company restored his profile. The New York Times writes about the dilemmas caused by this policy in today’s world. [Image Via david_shankbone]

Google+ Works with Page Management Companies – Google announced last week the creation of Google+ Pages for brands to share information with users on Google+ and Page management companies like HootSuite, Context Optional, Vitrue and Buddy Media are set to work with brands on managing this new platform.

Orange Launches Facebook Phones – Orange is set to release three affordable Android smartphones for customers who heavily use Facebook.

Dems, GOP Participating in DC Hackathon – Congressional members from both parties are set to participate in the first ever DC Facebook Hackathon to find new ways to use social media in the political process. [Image Via Facebook]

Creepy Zuckerberg Fan Appears at Carnegie Mellon – A student at a recent Mark Zuckerberg appearance at Carnegie Mellon University instilled fear in the audience, and CEO, when he made some creepy and cryptic comments. The student apparently snuck into the venue the night before to place some speakers under Zuckerberg’s seat.

PayPal Releases Facebook Payment App – PayPal released a Facebook app, Send Money, that allows users to send money to friends without a fee.

Other Announcements:

Coupons.com for Pages – Coupons.com released its Brandcaster Social platfor to allow brands to create secure, printable coupons directly on their Pages in 48 hours or less.

Napkin Labs Brings Crowdsourcing to Pages – Napkin Labs’ Brainstorm app allows brands to gives brands a way to get feedback from fans anything from new products to coming changes.

NASCAR, ESPN to Livestream Driver’s Camera -  NASCAR and ESPN announced that the two will provide a livestream of driver Tony Stewart’s live in-car camera on Facebook during the season finale on Sunday, November 20.

Facebook is close to settling charges by the Federal Trade Commission that it deceived users about privacy changes, The Wall Street Journal reports. The settlement would “require Facebook to obtain ‘express affirmative consent’ when it makes ‘material retroactive changes’” to private user data. In other words, sharing-related privacy changes will now be up to users to opt into — Facebook won’t be able to force people to either make more data available, or have to “opt out” of using Facebook.

The specific issue is that Facebook changed its privacy policies in late 2009, forcing all users to make some information public that it had previously said would not be made public. Until that point, Facebook’s policy had said that “you choose what information you put in your profile, including contact and personal information, pictures, interests and groups you join. And you control the users with whom you share that information through the privacy settings on the Privacy page.”

That November, it announced that some of this information – profile name, profile picture, list of friends, current city, gender, networks, and Pages — would be made public as part of a privacy policy change. And it was, that December, causing an outcry among some users and privacy advocates, and getting the FTC’s attention.

While both the November policy change and December product update stated what the changes were, many users still didn’t comprehend what was going on — especially because Facebook had not previously told them to expect such changes. Further issues, like Facebook making all Liked Pages public in April of 2010, or more recently offering a face-targeting service, have added to the perception among some that Facebook is not prioritizing privacy.

The settlement, which Facebook isn’t commenting on right now, appears to create new limits around what Facebook might launch in the future. It would be precluded from doing anything like that December 2009 product change, for example. In addition, Facebook will be subject to independent privacy audits for the next 20 years, although it’s currently unclear who the auditors would be or how they would hold Facebook accountable.

Facebook’s side of this story is that it has needed to revisit out the right balance of public/private as its service has evolved, and as cultural expectations around privacy have changed. When the company first launched on college campuses, the whole point was to offer a private community. Today, some use the site for sharing content more publicly.

If the FTC had acted earlier, maybe it would have precluded Facebook from creating more value for users (a key risk that the company created for itself due to its decisions). For example, if some large portion of users had chosen not to make their profile photos and names public, Facebook’s social plugins would be able to show significantly less relevant social information to other users.

But at this point, Facebook appears to have gotten its main privacy changes completed, and we’re left wondering what the FTC will have left to enforce.