From business's point of view social ads are the holy grail of marketing. Being able to give ads to people based-on their previous behavior, not only from shopping with your company but with others, is the Fort Knox of personal data. This information potentially allows marketers to give consumers marketing messages through the most influential marketing channel, social networks, and based-on the users profile, giving away their preferences.
But it's also the holy thorn of marketing. When someone posts information on a social networking site, they expect their information to not be shared outside of the privacy controls they've set. When this data becomes shared, people feel violated, lowering their trust in the service that is rendered. Privacy rights groups then storm the gates of the government demanding greater protections for consumers and for federal investigations of the service providers. The EU, with it's stronger privacy protections, will already be on its way to analyzing the security and privacy implications of the services, make recommendations, then get ready for its next set of legal battles.
They say there's no such thing as bad pr, but when the consumers trust in a set of dominant services is on the line, it is bad pr. Companies should be careful when treading in the territory of personal privacy concerns. Maximum transparency about one's policies and allowing for people to control the disclosure of their information will create maximum trust. Trust is the glue of relationships and commerce. It's not meant to be abused.
"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently." - Warren Buffett