SAN FRANCISCO — The online advertising system that was supposed to light Facebook Inc.'s way to riches has created such a storm of negative publicity that Chief Executive Mark Zuckerberg personally apologized Wednesday and told users they could turn it off.
In a mea culpa designed to appease the social networking site's more than 57 million users and the marketers trying to reach them, Zuckerberg said Facebook should have responded to the public outcry sooner.
"We've made a lot of mistakes building this feature, but we've made even more with how we've handled them," he wrote on the Palo Alto-based company's blog.
Zuckerberg's rollout of Beacon, an online tool that tracks the purchases and activities of its users on dozens of websites, marked his first major stumble since becoming Silicon Valley's newest golden boy.
The Facebook flap comes amid growing concern about the increasingly sophisticated technology used to track online activities in an effort to more precisely target advertising.
Consumer and privacy watchdogs say Facebook and other social networking sites have not been forthcoming enough about how much user information they harvest and what they do with it. They pledged to continue to press regulators in the United States and abroad to develop guidelines to protect online privacy, particularly of teens.
"Young people are pouring their hearts out, living their lives and interacting with all of their friends on these sites," said Kathryn Montgomery, a professor of communication at American University. "The more we live our lives online, the more we need to have a set of rules of how businesses operate there."
Unveiled last month as part of Facebook's broader advertising strategy, Beacon is considered crucial to the company's drive to capitalize on its soaring popularity and valuation.
In October, Microsoft Corp. invested $240 million for a small stake in Facebook, valuing the privately held firm at $15 billion. More recently, the richest man in Asia, Hong Kong billionaire Li Ka-shing, invested $60 million, and Facebook is trying to raise an additional $200 million in the next few months.
Beacon sends messages telling Facebook users when their friends buy jewelry on Overstock.com or a movie ticket on Fandango.com. The idea is that referrals from friends drive sales at partner sites and generate more ad revenue for Facebook, the No. 2 social networking site behind News Corp.'s MySpace.
