Four U.S. senators want Facebook to make it easier for its more than 400 million users to protect their privacy as the website develops new outlets to share personal information

SAN FRANCISCO Four U.S. senators want Facebook to make it easier for its more than 400 million users to protect their privacy as the website develops new outlets to share personal information.The call for simpler privacy controls came in a letter that the senators plan to send Tuesday to Facebook founder Mark Zuckerberg. The Associated Press obtained a draft of the letter signed by Sen. Charles Schumer, D-N.Y.; Sen. Michael Bennet, D-Colo; Sen. Mark Begich, D-Alaska; and Sen. Al Franken, D.-Minn.It marks the second time in the past three days that Schumer has expressed his misgivings about a series of changes that Facebook announced last week. The new features are designed to unlock more of the data that the online hangout has accumulated about people during its six-year history.

Schumer sent a letter Sunday to the Federal Trade Commission calling for regulators to draw up clearer privacy guidelines for Facebook and other Internet social networks to follow.The political pressure threatens to deter Facebook’s efforts to put its stamp on more websites, a goal that could yield more moneymaking opportunities for the privately held company.

Facebook’s expansion “raises new concerns for users who want to maintain control over their information,” the senators wrote in their preliminary draft.In a statement late Monday, Facebook spokesman Andrew Noyes said the company wants to meet with Schumer to explain its commitment to privacy.

“We’ve developed powerful tools to give our users control over what information they want to share, when they want to share it and with whom,” Noyes said.Among other things, Facebook is plugging into other websites so people can communicate their interests with their online entourages. Facebook also tweaked its own website to create more pages where people’s biographical information could be exposed to a wider audience.

Before personal information can be shared with other websites, the senators want Facebook to seek users’ explicit consent, a process known as “opting in.” Facebook currently can share some personal information with websites unless individual users opt out by telling the company they don’t want those details to be passed along.The senators also object to Facebook’s decision to allow other businesses store users’ data for more than 24 hours.

Zuckerberg, who turns 26 next month, says he just wants to build more online avenues for people to connect with their friends and family. Some of his previous efforts have been detoured by privacy concerns, most notably in 2007 when Facebook users revolted against notification tool, called Beacon, that broadcast their activities on dozens of websites.Facebook responded to that rebellion by giving people more control over Beacon before scrapping the program completely. (AP)

Facebook Inc. is expanding a service called Facebook Credits that gives it a 30 percent cut of sales from tractors

Facebook Inc. is expanding a service called Facebook Credits that gives it a 30 percent cut of sales from tractors, fish food and guns in online games, according to four people who have held discussions with the company.Facebook is already testing the payment option in at least 17 games, including “Happy Aquarium” and “Restaurant City.” The company will make the service available in more games ahead of its annual developers conference in April, said the people, who declined to be named because the plans aren’t public.After relying on advertising for almost all of its revenue, Facebook is moving to take a bigger piece of the market for virtual items bought in games, which may quadruple to $3.6 billion in the U.S. by 2012, according to ThinkEquity LLC. Today, almost all of those sales go to the game developers, such as Zynga Inc., creator of “FarmVille,” and Electronic Arts Inc.’s Playfish unit.

“It will likely be a significant revenue stream,” said Jeremy Liew, a managing director at Menlo Park, California-based Lightspeed Venture Partners who invests in social games. “They’ll keep working on it until it makes economic sense for developers.”Facebook, the most popular social-networking site, allows outside developers to offer games to its 400 million users. The games are free, and players can pay for items that advance their progress, such as a $3.33 tractor in “FarmVille,” a $5.95 helicopter in “Mafia Wars” or a $4.89 box of fish food for “Happy Aquarium.”
Facebook Cut
The Palo Alto, California-based company is seeking to take advantage of the popularity of online games, a market that has already blossomed in Asia. Shares of Tencent Holdings Ltd., a game company in Shenzhen, China, tripled in the past year, giving it a market value of $35 billion. Facebook is also taking a page from Apple Inc., which gets a 30 percent cut of sales from iPhone apps.Today, gamers on Facebook can either buy Facebook Credits to obtain items in games, or pay for them through third-party services. Of the $3.6 billion in U.S. virtual goods sales in 2012, about $2.2 billion will be on social networks, with 80 percent on Facebook, said Atul Bagga, a ThinkEquity analyst in San Francisco. If all payments on the site use Facebook Credits, that would mean $530 million in revenue for the company, he said.

‘Trust Factor’

“It’s the trust factor,” Bagga said. “You trust Facebook more than you would trust any other payment company.”EBay Inc.’s PayPal unit said yesterday that it will become a payment option for Facebook Credits, allowing PayPal customers to buy the site’s virtual currency. Players can also use credit cards or their mobile phone to buy credits.Payments and virtual currencies will likely be a focus of Facebook’s developers conference, which is scheduled to start April 21 in San Francisco, said three people who have had discussions with the company.

“We are continuing to look at ways to extend our virtual currency Facebook Credits  via a small alpha test with a handful of developers,” Facebook said in an e-mailed statement. “The test started in May and is exploring ways for people to use their Facebook Credits with third-party applications.”Allowing Facebook’s users to buy a single virtual currency that can be spent on all games will probably increase sales for developers, said Vish Makhijani, chief operating officer of San Francisco-based Zynga, the largest creator of games on the site.

‘Additional Liquidity’

“Facebook Credits will drive more people to become buyers,” Makhijani said. “That additional liquidity or ability to spend in more places clearly would be more attractive to a consumer than something you can only spend in one place.”

In rolling out Facebook Credits, the company may still allow players to buy goods using other payment services. Developers would prefer to have Facebook Credits as an option rather than being the exclusive payments provider  because purchases made with Facebook cost them more, said Vikas Gupta, chief executive officer of Jambool Inc., also known as Social Gold, which offers an in-game payment system.“Facebook Credits comes at a pretty high tax,” said Gupta, whose San Francisco-based company charges developers 7 percent to 10 percent per purchase. Still, he said Facebook Credits “will help grow the overall ecosystem so you’ll see more people pay for goods.”