More about the Google ads that run inside Facebook

googlefacebook.pngClaims yesterday that a Facebook application was sending reams of sensitive user information to Google to target ads appear to be overblown.

Even so, the charges raise questions about how Google plans to roll out its still unannounced advertising effort within Facebook — and specifically how much access Facebook will give to third-parties about its users.

The issue started yesterday when a software hacker who goes by the moniker theharmonyguy wrote that a popular Facebook application called Compare People was sending sensitive Facebook user data to Google to help target Google’s Adsense ads running in the application. The application lets friends vote on which of any two other friends are more attractive, talented, powerful, etc.

Its actions were in violation of Facebook’s terms of service and, generally, user privacy, theharmonyguy claimed. Specifically, he claimed the application shared Facebook users’ age, gender, city, ZIP code, favorite music, favorite movies, favorite TV shows, favorite books, “about me,” activities, interests, and political views. Facebook doesn’t currently allow third-party applications to completely export user data. Users were not notified about such actions, he said.

Other blogs covered the problem.

However, Naval Ravikant, an investor in Chainn, the company that owns Compare People, tells us the application only shares a couple of keywords. If someone were looking at two friends who both liked movies, Compare People would send the “movies” keyword over to Google, and Google would serve the user a movie ad. Compare People does not share categories of users’ personal information, as theharmonyguy suggested. Ravikant says Google has gone out of its way to avoid storing Facebook user data on its own servers. There is no clear violation of Facebook’s terms, or of user’s privacy.

Compare People is one of the larger Facebook applications. It has 642,237 daily active users (seven percent of its total users).

Many applications are running Google’s ads in Facebook, Ravikant told us, and all of them use keywords to match ads with users. The only difference between Compare People and other apps, Ravikant said, is that it securely sent keywords to Google via Javascript. Most other Facebook apps that work with Google send keyword information to Google through server-side connections.

We broke the story about Google’s advertising efforts in Facebook a month ago, but the company has yet to confirm with us. Techcrunch subsequently posted an email from Google to Facebook app developers with more details.

Other third-party advertising efforts on Facebook, such as Lookery, also try to use keywords user data to match relevant ads to users on Facebook application pages.

Where will Facebook draw the line allow third parties to use Facebook user data to better target ads within Facebook — especially Google? Part of Facebook’s core value is that it has significant data about users. It’s using this data to target its own ads more effectively. If Google and other advertising networks can access this same data, Facebook loses its advantage.

Ad targeting is not the only place Facebook’s data is getting tapped by Google. We’ve also learned that Google is experimenting with social search applications in Facebook, although we haven’t actually seen any such application yet. As we wrote earlier this week, a web search engine based in Facebook that uses user data to target relevant search results could be a big business.

For now, Compare People has stopped running Google advertising while it confirms with Facebook that there are no concerns with what it is doing.

[Google-Facebook logo courtesy of the Facebook application called Google Gadget.]