Today: Major Silicon Valley companies make changes in their services that could cost them with consumers. Also: Wall Street ends week on an upswing.
The Lead: Google ads, Instagram videos and Facebook search to change
Google (GOOG) and Facebook have faced down several controversies regarding their use of customer info and other privacy snafus, but the Silicon Valley tech giants don't seem to be scared to make moves that could turn off some users.
Google announced Friday that it would begin placing users' activity and photos into advertisements and recommendations seen by the account-holders' Google+ contacts, similar to Facebook's "Sponsored Stories," which led to a class-action lawsuit that cost the Menlo Park company $20 million and forced it to offer members an option to opt out of such uses.
"For example, your friends might see that you rated an album 4 stars on the band's Google Play page. And the +1 you gave your favorite local bakery could be included in an ad that the bakery runs through Google," the Mountain View search giant said in Friday's announcement of the change.
Google is offering its users the option of opting out, and will not use information from users younger than 18, noting in bold in its statement, "On Google, you are in control of what you share." The change in Google's terms of service will take place Nov. 11, though the company did not give an indication of when it will begin placing the new ads.
"It seems to me that we have said very clearly what we do with the information, and ... that we have to be respectful of people's privacy. And if we were to be disrespectful of your privacy, you'd go somewhere else or you wouldn't use us," Schmidt said.
Facebook made its own move Thursday, announcing that users would no longer be able to block people with whom they are not connected from seeing their profile when searching the social network, a change that could boost the Graph Search feature CEO Mark Zuckerberg championed in a launch event earlier this year. The company said in a blog post that a "small percentage of people still using the setting" would lose it soon, after Facebook stopped offering to block searches for anyone who had not already chosen the option earlier this year.
Facebook was not as open about a change in its Instagram photo-sharing service: The Next Web reported that an update to the popular app takes away the option of not allowing videos to play automatically when a user visits the timeline. The move follows the announcement earlier this week that Instagram would begin to serve advertisements in users' streams, the first revenue-generating attempt by the San Francisco company since Facebook committed $1 billion in a 2012 acquisition.
Tossing the anti-autoplay option ensures that users who do not opt out of the service -- and all users on Wi-Fi networks -- will have video advertisements begin immediately when they pop into their stream, Next Web reported.
Possible consumer backlash from these moves did not scare investors Friday: Google increased 0.4 percent to $871.99 while Facebook gained 0.1 percent to $49.11 after Mercury News staff writer Brandon Bailey reported that Zuckerberg had bought up properties surrounding his Palo Alto house in order to avoid a developer doing the same.
SV150 market report: Wall Street ends week on upswing as SolarCity skyrockets
Wall Street's volatile week came to a close with gains on Friday, as Silicon Valley stocks were propelled by a huge gain from San Mateo solar installer SolarCity.
SolarCity, which fell lower than $30 last month after hitting highs of more than $50 earlier in the year, zoomed 23 percent higher to $47.18 Friday after announcing that it expects to hit targets for installations this year and nearly double them next year. The company's fresh guidance predicted that SolarCity would hit its goal of deploying 278 megawatts of solar energy systems in 2013, while predicting for the first time that it would deploy 475 to 525 megawatts in 2014. Friday's huge jump arrived at a serendipitous time for SolarCity: The company filed for a secondary stock offering that will sell 3.4 million shares at quite a premium from its IPO price of just $8 a share, with Chairman Elon Musk and his cousin, CEO and co-founder Lyndon Rive, committing to buy more than half a million of the shares. SolarCity also plans to raise $125 million in a debt offering.
Musk's other Silicon Valley company, Tesla Motors (TSLA), gained 3.3 percent to $178.70 ahead of the opening of a store in its hometown of Palo Alto. Apple (AAPL) gained 0.7 percent to $492.81 after sharing plans for its new Cupertino campus and reportedly soliciting BlackBerry employees for a move to Silicon Valley, though the tech titan faces issues with reports of problems with its new iPhones and mobile operating system. Cisco (CSCO) gained 1.2 percent to $23.28 after Pacific Crest analysts suggested picking up the San Jose networking giant's stock, and Hewlett-Packard (HPQ) resumed the upswing it began Wednesday after CEO Meg Whitman's optimistic meeting with analysts, gaining 2.2 percent to $22.80.
Headed the other way was Fremont hardware maker SGI, which was the first Silicon Valley tech company to announce financial issues stemming from the government shutdown Thursday. After announcing that it would miss revenue forecasts, the company's stock suffered the biggest tumble in the SV150 on Friday, falling 9.8 percent to $14.75.
The SV150 index of Silicon Valley's largest tech companies: Up 9.67, or 0.73 percent, to 1,341.39
The tech-heavy Nasdaq composite index: Up 31.12, or 0.83 percent, to 3,791.87
The blue chip Dow Jones industrial average: Up 111.04, or 0.73 percent, to 15,237.11
And the widely watched Standard & Poor's 500 index: Up 10.64, or 0.63 percent, to 1,703.2
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/jowens510.