When Facebook talks about preserving user privacy, that's what they have in mind: They do not let advertisers tie the information about you in a profile (your age, interests, etc.) to the information that identifies you in your profile (your name, email address, etc.). That is the informational view of privacy, and Facebook is likely to continue to get that right, if only because so many governmental agencies are watching them. I also think that the Facebook folks understand and support the value of maintaining privacy in this sense. Yet, I find myself creeped out by this system because Facebook gets the defaults wrong in two very significant areas.
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