Facebook has long kept track of the websites its users visit when they aren't on the social network. Three months ago, it began using the data to build more detailed user profiles, allowing advertisers to target people with more personalized marketing pitches.
That has rankled some retailers, advertisers and Internet publishers, which worry that the wider use of browsing history will hand Facebook, and potentially their own rivals, more information about existing and prospective customers.
Companies that want users to share content on Facebook install a small bit of Facebook code, called a pixel tag, on their sites; the pixel is often associated with Facebook's "Like" and "Share" buttons. Many websites have installed the code, allowing the social network to record a significant amount of Internet activity.
Facebook places another bit of code, known as a cookie, on its users' computers. When a user visits other websites that have Facebook's code, Facebook can recognize the cookie, building a record of how the user surfs the Web.
Facebook also can track users on their phones. Some mobile app publishers, aiming to optimize their advertising on the social network, let Facebook know the unique hardware identifiers of their app users. Facebook can match the IDs to those of its own mobile users.
(In order to access Facebook, all users are required to agree to the company's terms of service, which allow for such data to be collected.)
To be sure, many other companies, including Google Inc., GOOGL +1.08% track the browsing histories of Internet users to help target advertising.
But advertisers say sending information to Google doesn't scare them as much as sending information to Facebook, mainly because Facebook knows users' real identities.
Courtesy -Wall Street Journal Sep 23rd 2014