Back in 2007, Facebook was looking to start an experiment that if successful could be a major tool for marketing research. The only problem is that it was really intrusive, and people complained of privacy concerns. This lead to Facebook making the option an opt-in service.
This was enough to keep the service afloat for awhile, but it looks like it will meet it’s end soon. Beacon’s untimely end is attributed to how most things conclude, a lawsuit. Around a year ago a user filed suit with Facebook, citing that users’ privacy had been stolen, and that Facebook was collecting information about it’s users from other websites.
Although Beacon is meeting it’s end, many believe that the service catapulted Facebook into a money positive web service. The next step in the evolution is Facebook Connect which is being met with a better reception than Beacon.