Is Facebook Inc. (FB) Really Selling Users’ Personal Info?

Facebook Inc. (NASDAQ:FB) has grown to be the largest social network site in the word, with more than 900 million users. At the same time, Facebook has had trouble monetizing that immense audience through advertising and other features – especially since it says on its front page, “It’s free and always will be.” That means the site will never charge anyone a subscription to be a member of the network.

So, Facebook Inc. (NASDAQ:FB) has had to work on a variety of avenues to develop revenue through advertising. However, along the way, Facebook Inc. (FB) has had a variety of issues with privacy of users’ personal data in several countries – mainly in Europe and the U.S. And now there is speculation that while Facebook Inc. (NASDAQ:FB) supposedly takes steps to protect privacy of users, it may be selling access to user information for the benefit of third parties – namely, advertisers. This comes from a recent report in the Wall Street Journal.

The report stems from announcements of Facebook Inc. (NASDAQ:FB) advertising programs called Facebook Ad Exchange and Custom Audiences, which basically give advertisers an opportunity to target their advertising on general groups of users based on a variety of personal data. Facebook Exchange seems to be set up more in generalities, Custom Audiences seems to go a step further – reportedly, if an advertiser has an e-mail address or phone number obtained through some other Web site or contact (outside of Facebook), that advertiser could then cross-reference that information with what is in Facebook Inc. (NASDAQ:FB) user data library, and send advertisers specifically to those users.

Does that confirmation of already obtained personal info constitute “selling” the information to third parties? Charlie Rose asked Facebook Inc. (NASDAQ:FB) COO Sheryl Sandberg about that, whether Facebook actually sells user information. “Absolutely not true,” Sandberg said. “We won’t sell it to you, we won’t sell it to anyone … we never sell user information, we don’t make more money when you share more, and we do not give your information to marketers. We do have systems that enable marketers to serve the right ad to people at the right time.”

So while Facebook Inc. (NASDAQ:FB) may not “sell” our information to make money, does “confirmation” of personal e-mail or phone numbers constitute a privacy breach? Do you trust Facebook, or any other site for that matter, to keep your personal information private? If you were an investor like billionaire fund manager George Soros of Soros Fund Management, would you be interested in this or not? Do you think this would matter to the bottom line of user experiences and thus revenue to the company?