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Beacon formed part of Facebook's advertisement system that sent data from external websites to Facebook, for the purpose of allowing targeted advertisements and allowing users to share their activities with their friends. Beacon reported to Facebook on Facebook's members' activities on third-party sites that also participated with Beacon. These activities were published in users' News Feed. This occurred even when users were not connected to Facebook, and happened without the knowledge of the Facebook user. The service was controversial and became the target of a class-action lawsuit, resulting in it shutting down in September 2009. One of the main concerns was that Beacon did not give the user the option to block the information from being sent to Facebook. Beacon was launched on November 6, 2007, with 44 partner websites. Mark Zuckerberg, CEO of Facebook, characterized Beacon on the Facebook Blog in November 2011 as a "mistake." Although Beacon was unsuccessful, it did pave the way for Facebook Connect, which has become widely popular.

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