CIO — The early use of Facebook Connect, a technology that enables people to sign into multiple websites with their Facebook user name and password, has helped companies all over the Internet attract exponentially more people to their sites. While Facebook doesn't yet have access to key data on those third-party sites, such as the searches users perform, analysts say an arrangement of that nature in the future could help the social network monetize its service with more relevant ads than the ones that exist today.

But although Facebook has big business plans for Connect, the social network has proceeded carefully in this early stage as more questions about Facebook data ownership and privacy emerge.

Since Facebook Connect became generally available in early December, more than a thousand sites have joined the program. Some of these early adopters of Facebook Connect say they've seen huge increases in traffic to their sites. They've also seen substantial spikes in registration — a huge barrier for many websites because people are generally loathe to fill out the same types of forms over and over again, while memorizing several user names and passwords for each service.

"There's a big barrier there," says Brian McCarthy, the VP of products and marketing for Citysearch, a website that hosts user-generated reviews of restaurants, bars and hotels. "Facebook Connect has had a huge impact on increasing our registration. Now people can go click click, using Facebook Connect, and they can immediately be writing a review in seconds."

While McCarthy wouldn't give detailed numbers, as Citysearch's Connect implementation is in beta, others haven't been so shy. Facebook Connect partner sites such as Gawker, a blogging network, experienced a 45 percent increase in registration, said Dave Morin, a senior manager of the Facebook Platform (the technology that fuels Connect), in a recent interview with CIO.

Connect can also improve the user experience of people visiting the third-party sites because they can interact with their Facebook friends who also have accounts there. For instance, if a Facebook Connect user accessing Citysearch looks for a review of a certain restaurant, the reviews of their Facebook friends will be pushed to the top of the page.

Perhaps more significantly, people who log into the third-party sites using Facebook Connect spend more time on the site and contribute more content than regular users, early data shows. Joost, a site that allows people to watch and share mainstream TV shows, films and music videos online, implemented Connect back in mid-December. Since then, people who have navigated the site using a Connect account have watched 30 percent more videos than non-Connect users. They have also made comments on videos 15 percent more of the time.

"We have a lot of shows that are good and that people are likely to enjoy, but it's not in their mindset to watch it sometimes unless they have a social trigger," says Henrik Werdelin Chief Creative Officer at Joost. "Now, if they get a notification [on Facebook] that one of their friends made a comment about a show, they're very likely to go watch a little of the show and get drawn into viewing that way."

This brings up perhaps one of the most interesting aspects of Facebook Connect: the flow and streams of information between Facebook itself and the participating third-party sites. If someone on Facebook Connect comments on a video on Joost's site, for example, that information could be streamed into that person's Facebook newsfeed — the main column that runs down the center of Facebook pages , which updates people about their friends actions, such as sharing a photo album or updating a status message.

It might sound little bit like last year's Beacon advertising controversy, an incident in which Facebook users' buying habits on sites that had partnered with Facebook were broadcasted to their friends' Facebook newsfeeds.

While there are similarities, the main difference is that the messages broadcasted on a Connect user's newsfeed appear less like overt ads, says Jonathan Yarmis, an industry analyst who pens the Doctor Disruptive blog. Unlike Beacon, users also must make a conscious decision to use Connect.

"Because users have to opt in, this is like a benign Beacon," Yarmis says. "With Connect, it's going to do it on sites where we're already comfortable with sharing."

But as Facebook directs free traffic from the social network to third party sites, it remains unclear what it will want back in the future. Although the company's executives have touted growth as the major priority of Connect, it would be in Facebook's best interest to utilize the relationship with third-party sites to learn more about users, such as looking at their search data, analysts say.

"But they need to be careful there," says Murtaza Hussain, president of Peanut Labs, which does social networking market research. "Plus, the promise of targeted ads on social networking still needs to bear fruit, and it's blurry [from a privacy perspective]."

And Facebook has been careful. The company has stated very clearly that it doesn't yet have plans to glean key data (such as search queries) from those third party sites. According to a spokeswoman, "Facebook does not have access to information or activities that occur on the third party site."

The only exception is that Facebook is generally aware that a Connect user is interacting with one of the partner sites, and they do reserve the right to examine the information about those sites that pass through Facebook itself.

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