Facebook, MySpace and other social networks have apparently been sending personal and identifiable information about users to advertisers without consent, despite assurances to the contrary.

Large advertising companies including Google’s DoubleClick and Yahoo’s Right Media have received information including usernames and ID numbers that could be traced back to individual profiles as users clicked on ads. The data could potentially be used to look up personal information about the user, including real name, age, occupation, location and anything else made public on the profile. Both of the aforementioned companies denied being aware of the “extra” data they were receiving and claim they have not made use of it.

The Wall Street Journal reports that since questions were raised about the practice with Facebook and MySpace, both companies have since rewritten at least some of the code that allowed transmission of identifiable data. Beyond those two companies, LiveJournal, Hi5, Xanga and Digg made the list of sites who have sent identifiable information back to advertisers when a user clicked on individual ads.

The WSJ found that Facebook went farther than most in sharing identifiable data by sending the username of the person clicking the ad as well as the username of the profile he or she was viewing at the time. This news could hardly come at a worse time for Facebook, a company that currently faces a privacy backlash potent enough to make the cover of Time Magazine this month.

Outside of Facebook, the other companies named in the article maintain the data they send to advertisers contains the user ID of the profile a user is visiting when he or she clicks on an ad, and not the user ID of the individual visitor. Both Google and Yahoo strongly refuted the idea that they would ever make use of any such personally identifiable data. Yahoo VP of Global Policy Anne Toth said of the allegations, “We prohibit clients from sending personally identifiable information to us. We have told them. ‘We don’t want it. You shouldn’t be sending it to us. If it happens to be there, we are not looking for it.’”

What do you think: Is this another privacy-related stain on Facebook as well as other social networks, or much ado about nothing?

UPDATE: Digg contacted us to clarify what they do and do not do with respect to personally identifiable information sent to advertisers. Chas Edwards, Publisher & Chief Revenue Officer at Digg, indicated that although the URL of the page the user is currently visiting is passed through (note that this is normal behavior — essentially how URLs function on the web), no personally identifiable information about the user themselves is passed through: “We don’t share user data or any other personally identifiable information with any advertisers or ad networks, even if a user clicks on an ad; we only provide URLs of pages being visited. For site analytics purposes, we do share user data — that is *encrypted* so that it can’t be tracked to PII on an individual user — with 3rd party research suppliers such as Omniture.”

Tags: advertising, digg, facebook, facebook privacy, Google, hi5, LiveJournal, MARKETING, myspace, privacy, trending, xanga, Yahoo

To active the feature, you must first link your Facebook account to Yahoo by completing the “Add to Facebook” section of your Yahoo! profile.  Once that is complete, you sign in with Facebook and your Yahoo! contacts automatically get updated with all your Facebook friends’ information.  The details are such taht any contact that uses Facebook will now have their public details available from Facebook.  You’ll see their Facebook photo and any information they’ve chosen to share publicly - like current location and work history.

If you have someone already as a Yahoo Contact, the value is even more because it amalgamates the information, and you now have one point of reference that includes all their information including their email address. This is a big advantage with Facebook, and interestingly will likely happen with Google mail and other mail services at some point in the future.   If you’re interested in the feature, check out the screenshot below and head over to your Yahoo! Mail and check it out!

One has to wonder if Yahoo! happens to be one of those potential partners where Facebook intends to grant access to your data without separately filling out a form. Then again, I can’t think of any circumstances in which I’d want my information automatically granted, but we’ll have to wait until Facebook announces these partnerships at f8.

For now, we’ll have to rely on basic Facebook Connect implementation such as the integration now provided by Yahoo! Mail.

A spokesman from Facebook, while talking to WSJ, stated that, “This suit is without merit and we will fight it vigorously.” Google however, declined to comment on the grounds, that they haven’t reviewed the lawsuit as yet.

The lawsuit has reminded me of a similar battle between Judy’s Book a local business review site and Yahoo. Judy’s book claimed to invent the term “Social Search” and went ahead and got it patented. However, Yahoo started to use the same term of services on its own site. Judy’s Book lamented about this infringement by Yahoo on its patent, but decided not to file a suit against Yahoo as they thought that the final battle is won or lost in the consumer space and not in the court.

Judy’s Book was right, both Judy’s Book and Yahoo’s Search offerings – let alone its Social touch to Search is irrelevant now, and most of the reader of this blog might have never heard about either. Wireless Ink’s Patent can be viewed here.

We doubt it. Contact imports is the critical viral component from most online products and I seriously doubt Facebook wants to grant competitors’ access to this type of functionality. While contact importing is only one feature within Yahoo!, the company previously announced a broad strategy in December of the company wide implementation of Facebook Connect.

This new contact importer doesn’t appear to have the standard Facebook Connect implementation though which makes me wonder about the technical implementation of this service. We’ll be sure to update this post once we hear more information from Facebook.

Nielsen believes that the trend of simultaneously viewership would only accelerate in the future. According to the report:

Simultaneous use of TV and PC, particularly on sites such as Facebook and Google, demonstrates an opportunity for media companies to extend advertising engagement across screens as well as to enrich the overall viewer experience. Last week, an analysis found that 14% of Super Bowl viewers also spent time online during the game, at an average of 29 minutes per user. Nielsen expects to see this trend of simultaneous TV/internet usage continue its development through the Winter Olympics and during this summer’s FIFA World Cup Soccer event.

A hidden pointer in the report is the fact that Twitter didn’t managed to make it to the list of Top 10 destination sites for Olympic viewers. This is because, the primary and sole usage of Twitter is in news distribution.

When it comes to being a complete package – no other web site comes close to Facebook, which together with its status updates, photos, videos, fan pages and other social tools offer an elaborate set of features for everyone and every occasion. This is one of the many reasons why the International Olympics Committee decided to use Facebook as an online hub for the Winter Olympics.

While some brand managers have suggested that engagement ads may not be the solution they are looking for, the largest global advertiser, Procter & Gamble, continues to be bullish on Facebook. You can view Compete’s latest chart of unique visitors in the graph below:

According to Jim Stoneham of Yahoo!, Facebook Connect will be implemented across “Yahoo! Mail, Yahoo! News, Yahoo! Answers and Yahoo! Sports”. Kara Swisher states that Flickr will be another Yahoo! owned property which implements Facebook Connect, which will definitely be interesting considering Flickr is the biggest competitor to Facebook Photos.

Today’s announcement by Yahoo! is a huge win for Facebook in the company’s ongoing push for making Facebook Connect the most widely used identity platform on the web.