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Facebook Pays Up for Sponsored Stories


Plus, the social networking site is working on a local advertising system for mobile delivery.

MINYANVILLE ORIGINAL Sometime last month, Facebook (FB) quietly settled a lawsuit over its use of members' images and names in paid advertising, and apparently agreed to provide more information to users about the practice, and allow them to restrict its use more.

Although details of the agreed changes in user settings are not yet clear, the agreement evidently does not force Facebook to allow its users to opt out of the practice entirely.

Facebook reportedly also agreed to pay $10 million to charity as part of the settlement.

The advertising feature allows a commercial sponsor to use the image and name of a user who "likes" the sponsor's site in an ad inserted in the News Feed of the user's friends. Currently, users can restrict its use to an inner circle of friends.

Meanwhile, Facebook is working on a local advertising system for mobile delivery, Bloomberg news reported Monday.

But Facebook quickly moved to clarify the Bloomberg story, telling TechCrunch that its local ad system will not be as powerful (or, alternately, as scary) as the initial report suggested, at least not soon. Facebook said the earlier report "misinterpreted" a company executive's statement.

The executive was speculating about the potential for "hyper-local" advertising-like a latte coupon delivered by Starbucks (SBUX) when a customer is nearby.

It appears that Facebook reacted swiftly to prevent a budding privacy controversy. As all mobile users know, mobile devices can and do collect information on your precise whereabouts, for use in various applications. But companies that collect the data have had a hard time persuading some users that this personal information won't be misused.

In the past few days, Facebook stock has been on a roll, climbing to $31.41 at Monday's close after falling as low as $25.52 since its debut last month.
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