Facebook, ID fraud, and the dark side of the Web

In a year that has seen bullying in blogs, pedophiles on MySpace, and an ongoing privacy backlash against Facebook, it was appropriate that this year's Le Web 3 conference started Tuesday with a panel discussion about the "dark side" of Web 2.0.

"The Internet is just another form of human expression, so it's subject to human imperfection like any other conduit," said Chris Alden, CEO of blogging company Six Apart, who was on the panel with executives from Facebook and the South Korean Internet giant Daum Communications.

The problem with the Web is its anonymity, which erodes people's sense of social responsibility and encourages offensive comments in blogs, or worse, the executives said. People can be asked to register, but screen names are invented and few people with evil intent provide their real names and addresses.

In South Korea, the government has tried to tackle Web unruliness by issuing user names that are linked to people's real-world names and addresses. But storing such information centrally makes it vulnerable, and thousands of South Koreans had their personal data stolen soon after the system went live, said Loic Le Meur, the French blogger and entrepreneur who organized the conference.

"The centralized government approach links your real and online identities, but the privacy problem is bigger than the other problems in the online world," said Jaewoong Lee, Daum's founder. "The government system can help identify people who do bad things, but the cost is to sacrifice privacy,"

A better approach, he said, is to let people's online history be a measure of their trustworthiness. People who have been Daum customers for five years are rarely the ones who post offensive material, he said. Alden agreed. "When you start to look at the history of comments and build up a profile, then people start to have a real online identity."

The idea is that people would earn permission and credibility based on the trust they accumulate from their past usage of a site.

Facebook has less trouble with fake identities because its value depends on being visible to real-world friends. But the site has struggled with the flip-side of fake identities and the other cloud that hangs over the Web 2.0 world -- that of privacy and how people's personal data is used.

Dan Rose, Facebook's vice president for business development, was asked to explain the company's controversial Beacon system, which tracks the activities of Facebook members at partner sites such as Blockbuster and Fandango. The company made it easier for users to opt out of the system after an outcry over privacy, but Facebook is still being criticized for collecting data after people have logged out of the site and for collecting data about non-Facebook members.

The company made two mistakes, according to Rose. It reacted too slowly to the criticism, and it did a poor job of explaining what Beacon is. He argued that Beacon was not conceived primarily as an advertising product but as a way to let users share what they do outside of Facebook with their friends.

That doesn't jibe with what Facebook has said about Beacon in the past, when it called it "a core element" of its advertising system.

Later, Rose said Facebook is trying to build a "new social-advertising system."

"Advertising works on the Web when it feels like it's part of the content," he said. "We're trying to do that with this new social-advertising system we're trying to build. Bloggers do that organically, and that's where advertising on the Web is going. It's going to be more social, and it's going to be more tied to the person on the Web."

Le Web 3, held just outside of Paris, continues Wednesday. There are Twitter pages for the event here and here , a Facebook group here and postings at other sites are tagged leweb307.