Is confidence in Facebook waning once again?

It’s been barely 2 weeks since Mark Zuckerberg wooed investors and shareholders with his open and candid interview at the TechCrunch Disrupt Conference, and already Facebook has suffered another set back. After a brief hike in the share price, and what looked hope of recovery, Facebook has once again taken a blow.

This time, it’s privacy issues that are back on the agenda, and rumours of a potential security breach knocked confidence very soon after there was a 9.1% drop in the share price. It was the biggest drop since 27 July. Although few are directly making the link, this is further proof of the precarious and delicate situation that Facebook is in as they’re struggling to “get” mobile advertising, and getting ready to delve deeper into search and strengthen their ad network.

The rumours of the security breach started in France, where small numbers of Facebook users were complaining that private messages from the past were coming back to haunt them and were displayed on their Facebook Timeline. This prompted many users to delve into their archives to see if they too had been a “victim” of this “security breach”. Facebook later rebutted these claims and reassured users that private messages would remain private.

Facebook put the claims down to the differences in how we used Facebook in 2007, and how we use it now. Back in 2007, people used Facebook very differently, and the “private” messages users were seeing on their timeline were actually wall posts. Before tagging, likes, and timeline, users would regularly post directly to their friends wall, since this was more private that it is now. Add Timeline to the mix and messages that were once semi-private are now displayed for all the world to see.

With this rumour rebutted, another potentially more damaging story is starting to come to the surface. We all know that Facebook tracks our online activity to make our ads more direct and targeted, but what if they were planning to find ways to track our offline activity too? The Financial Times reported that Facebook has teamed up with Datalogix, a company that has been purchashing data about American households from store loyalty cards and similar programmes. By matching e-mail addresses and other identifying factors to Facebook accounts, Datalogix would be able to see if Facebook users purchased items after seeing an ad on the social media network.

While the reports would be private, and the data would be used to see which creative approaches are working and which aren’t, it sounds like the type of scheme that would send privacy savvy users running for the hills. Life Hacker has already published this guide on how to stop your data being shared in this way.

What do you think of these privacy issues? Could this be one step too far for most users?