I have heard two stories lately that have really made me start to reconsider a company that I used to have very positive thoughts towards. On a recent Security Now podcast with Leo LaPorte and Steve Gibson Steve spent the better part of the show talking about an alarming trend. Paypal, on some of the links on its page, routes users through an ad service called Double Click and then back to its site without the user knowing it. You need to listen to the podcast for a full explanation as to why this is very, very disturbing, but the short version is, it allows for Double Click to place third-party cookies on your system. This is a problem because it allows a third-party, a website that you aren’t expressly visiting to track you as you move from site to site. PayPal is allowing this in a transparent way that doesn’t alert you as the user of the site that it is happening. This is quite disturbing and as of yet, PayPal hasn’t given any explanation as to why they are doing it. Evil.

Next, I just read on Seth Godin’s Blog about his recent experience with PayPal where they sent him on a galactic goose chase when they inadvertently flagged his account for suspicious activity. Seth wanted to rectify the situation because the recent activity was all on the up-and-up but couldn’t when he found it impossible to get a hold of someone with the power to fix the problem.

PayPal used to be a glowing example of a trustworthy site that endeared itself to its users. Now, there is story after story of PayPal plunging down a black hole of bad service and mistreatment of its customers. Bad show PayPal, it is time to shape up, or another service will come around and turn your world upside down. In this post-industrial world where service is your only point of differentiation, you are jeopardizing your future for some short-term gains.

Another good company gone bad story is brewing over at Facebook. Recently Facebook released its new plan for monetizing its growing market share in the social-networking world. Supposedly, their new service was an opt-in ad service where your purchasing habits were automatically put into your activity stream. In other words, when you bought something online, Facebook would tell your friends about it if you said it was ok. That is all fine and good if indeed it was an opt-in service, but according to today’s Buzz Out Loud Podcast, it has come to light that the service was opt-out by default. That meant that Facebook and its partners tracked your online purchasing habits without your express permission. This is a huge mistake.

Facebook is in an industry where they could be supplanted very easily if its users became disenchanted. There are a number of other social-networking sites out there that are simply waiting for the next grand exodus to happen. If you don’t believe that it could happen, its happened before. Friendster was the first uber-popular social-networking site. It was supplanted by Myspace who was in turn supplanted by Facebook.

Facebook is the current Web 2.0 darling, but if the winds change they could very well be tomorrows Myspace. I expected more. Hmmm, maybe that was a mistake.

——–This Just In———

As I was scanning my feeds, I found this.  Apparently Robert Scoble feels the same way about Facebook that I do.