New York Times technology correspondent Saul Hansell recommends trying the following exercise:

• Search for "lawyers" on Google. Take a look at the ads on the right side.
• Now, search for "malpractice".
• Finally, search for "lawyers" again. Notice the change in the ads.

As Mr. Hansell notes, this limited implementation of behavioral targeting isn't too bad:

"So far this is largely harmless. It’s hard to imagine any violation that comes from Google having access to what you did 30 seconds before. What’s interesting is what comes next. As Google moves to place advertising on sites like MySpace, which have no natural advertisers, there is ever more pressure for it to use other sources of information to raise the prices at which it can sell those ads."

This is precisely the morass Facebook waded into with their creepy Beacon advertising program. The NYT has a great blow-by-blow of the changes Facebook has made to Beacon over the past 5 weeks, highlighting its slow acceptance of the privacy issues inherent to behavioral targeting.

But the erosion of digital privacy is not the only issue here. When Brad Pitt pimps his image to sell watches, he gets paid for it. Here in the real world, if I buy a sandwich from a fast food joint, I generally don't mind carrying around their advertising on the bag, the wrapper -- even the sandwich, if they're technically savvy. Why? Because I get a (hopefully delicious) sandwich out of the deal. Similarly, I wear T-shirts with company logos on them, and I don't mind being a free advertising platform because, well, I get to wear a shirt that covers up the evidence of the number of sandwiches I eat.

With Beacon, Facebook is asking -- or, in the first iterations of the program, demanding -- that its users become mini-celebrities, promoting the companies they use to their friends, without giving them any tangible benefit in return.

Now, I'm not making light of online privacy concerns. The news that ISPs are beginning to track their subscribers every movement to sell targeted advertising seems like a dangerous development.

There is, however, a potential upside to behavioral targeting, an upside that could benefit nonprofits: the illusion that the Internet is a smaller, more organized space. If you're working for a nonprofit dealing with environmental issues, wouldn't you prefer that Internet users who visit your web site and later search for "environment" and "green" and "energy-efficient" see a link to your site, even if they're reading soccer news?

Will the big companies be able to juggle the multiple concerns at play here? It's possible, if they:

• Offer such programs only on an opt-in basis.
• Provide a clear and simple way to opt out at any point.
• Provide tangible benefits -- even if it's simply more functional web browsing -- to its users.

Facebook has addressed the first two issues, to some extent, but I doubt Beacon will gain much traction until they recognize the third.