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he Facebook logo is seen on a screen inside at the Nasdaq Marketsite in New York in this May 18, 2012 file photograph. (Shannon Stapleton/Reuters)

Today: Facebook seeks to abolish user-voting system for privacy policy changes and move to user profiles that cross over into Instagram and other offerings, similar to Google's (GOOG) updated policy; stock hits highest point in almost four months. Also: Hewlett-Packard (HPQ), the day after, and Wall Street's short week.

Facebook looks to change its privacy policies as stock climbs

In moves sure to stir controversy, Facebook is looking to change the way it handles user profiles to a system similar to Google's, and abolish the system it has set up for user feedback on changes. The Menlo Park company's stock, meanwhile, continues to charge higher, hitting levels not seen since mid-summer.

Facebook publicly announced in a blog post Wednesday that it is seeking to rid itself of the user-voting process it has been running since 2009 to obtain feedback from users on privacy policy changes. The system put any privacy policy to a vote of users if it generated more than 7,000 comments, but the vote needed the participation of at least 30 percent of the social network's users to be the deciding factor on whether the change went through.


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With Facebook's massive growth in the past three years, the 7,000-comment threshold became too easy to cross, while the 30 percent mandate was too tough to surpass with a billion members worldwide. In addition, Facebook found that it was not getting strong feedback from its users through the system.

"We found that the voting mechanism, which is triggered by a specific number of comments, actually resulted in a system that incentivized the quantity of comments over their quality," Facebook official Elliot Schrage said in the blog post.

But Facebook is looking to change its privacy policy in a more profound way, Reuters reporter Alexi Oreskovic revealed Wednesday: The company seeks to share information on its users amid its services -- i.e., San Francisco-based photo-sharing app Instagram.

The major change would mirror Google, which changed its privacy policy earlier this year to track users through its multitude of services for an experience customized to each user. The change in Google's policy sparked outrage from privacy regulators in Europe and warnings from U.S. officials about exposing so much information about users to hacking efforts.

Facebook also would pull back on restrictions in its messaging system that allow users to to control who can message them.

While users and privacy advocates delve deeper into Facebook's proposed changes, investors grow more enamored with the company. After the much-maligned stock shot up 22.6 percent last week despite the largest release of shares since its IPO, shares shot up another 5.3 percent Wednesday, which Bloomberg News credited to relief that the end of the lockup did not bring the stock crashing down.

"It took us getting through these lockups without seeing a giant crush of shares show up with no demand," Wedbush Securities analyst Michael Pachter told Bloomberg. "It's pretty clear that the people who were eligible to sell last week are doing so in a disciplined manner. Each day that passes post-lockup there's a new investor showing up who says, 'OK I'm no longer scared by that.'"

Investors have also found reason to cheer lately due to Facebook's latest earnings report, which showed the first signs of mobile monetization; the company's foray into e-commerce with Facebook Gifts; and its promise to advertisers to track users' purchases of items advertised on the social network.

"People are much more comfortable with the direction and fundamentals of the company," Arvind Bhatia, a tech stocks analyst for Sterne Agee, told The Mercury News recently.

Facebook moved as high as $24.53 before closing at $24.32 Wednesday, its highest intraday and closing prices since July 26.

Spotlight remains on Hewlett-Packard a day after Autonomy allegations

A day after Hewlett-Packard revealed another dismal earnings report, overshadowed by accusations of accounting malfeasance by big-money software acquisition Autonomy, the story still had onlookers buzzing even as the Palo Alto tech giant's stock price recovered a tad from Tuesday's massive fall.

Reuters pointed out that more than a dozen firms advised the two sides on the deal, and none of them discovered any inaccuracies, while Bloomberg News columnist Jonathan Weil pointed out that the accounting tricks HP described could not possibly add up to the $5 billion the company wrote down (out of nearly $9 billion total) in response to the dirty tricks it claims.

Weil's colleague Jesse Drucker spoke to experts who wondered if the announcement was a way to divert attention from its history of poor acquisitions, while the FBI reportedly took on the investigation into Autonomy's accounting practices.

No matter the buzz around HP, the Autonomy affair has left a black eye on officials inside and outside the company that will take a long time to heal. But investors still sent share prices up Wednesday, possibly looking for value. Shares increased 2 percent to close at $11.94.

Wall Street moves higher despite Tesla's tumble

Wall Street moved slightly higher Wednesday before the Thanksgiving break, with all three major U.S. stock indexes adding more than 0.2 percent before the markets close on Thanksgiving. Traders will return on Black Friday for a shortened session to close out a week that will likely be positive thanks to Monday's big gains.

Silicon Valley stocks performed similarly to the overall market, with the SV150 index of the region's largest tech companies gaining 0.4 percent Wednesday.

Zynga followed social-networking partner Facebook higher with a 5.8 percent gain while Tesla lost 1.6 percent as it announced it will soon increase prices on its latest offering, the Model S, which recently won Motor Trend's Car of the Year award.

Programming note

Business Break will take the day off on Thanksgiving along with the markets and return on Black Friday. Have a happy Turkey Day!

Silicon Valley tech stocks

Up: Zynga, Facebook, Jive, Nvidia, Workday, VMware, HP, Palo Alto Networks, Symantec, Splunk, Microsoft, Yahoo (YHOO), Electronic Arts (ERTS), LinkedIn, eBay (EBAY), Cisco (CSCO), Netflix (NFLX), Intuit (INTU), Oracle (ORCL), Adobe

Down: Tesla, Intel (INTC), Google, Advanced Micro Devices, Yelp, NetApp, Gilead

The tech-heavy Nasdaq composite index: 2,926.55          +9.87 (0.34%)

The blue chip Dow Jones industrial average: 12,836.89          +48.38 (0.38%)

And the widely watched Standard & Poor's 500 index: 1,391.03          +3.22 (0.23%)

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.