Facebook last Wednesday announced new privacy settings that give users some additional control over what information they share, while taking away the ability to hide a few pieces of information from the general public.

One particular piece of publicly available information–users’ friends lists–caused a bit of an uproar from a number of sectors, including business people who don’t necessarily want to expose their professional networks to the public and their competitors. It is also a concern to some parents who might not want their kids–or a list of their kids’ friends–to be widely available.

Facebook quickly backtracked. A day later, the company announced on its blog that users can now uncheck the “Show my friends on my profile” option in the Friends box on their profile so that your friend list won’t appear on your publicly viewable profile.

Unfortunately, they weren’t very clear on exactly how you make the change. You won’t find this checkbox in your Facebook privacy settings. Instead you have to follow these steps:

1. Click on Profile on the blue bar a the top of the screen:

2. Scroll down to the beginning of your Friends list and click on the pencil to the right of the word Friends:

3. Uncheck the box that says “Show Friend list to everyone”:

You can’t hide your friends from your friends and applications
Unchecking that box will hide your friends list when a non-Facebook friend views your public profile, but it will not hide your Facebook friends list from your friends when they look at your profile. Also, this information will be available to applications and application developers.

In addition, this procedure does not hide other publicly available information including your name, profile picture, gender, current city, networks you belong to, and pages you’re a fan of.

Double-check your privacy settings
Most Facebook users have by now gone through the mandatory privacy settings wizard, but you can revisit your settings at any time by hovering over settings in the tool bar on the top of the screen and selecting privacy settings. If you don’t do this, a fair amount of your information might be available to the public including the names of your kids and other family members (with links to their Facebook accounts), your relationship status, and where you work.

To find out how your Facebook profile looks to the public, click on Profile Information in privacy settings and then on Preview My Profile…on the upper right section of that page.

This article first appeard on CNET News.com

This isn’t an optional step. Users will be able to “skip for now” the privacy wizard on the first encounter, but they’ll eventually be required to complete it to access their Facebook accounts.

Unless you want to customize the settings, it’s possible to zip through this privacy wizard quickly. But at least it forces you to think about privacy — if only for a minute or two — as a condition of being able to continue to use the service.

As I thought about how to configure my own privacy settings, I realized how little thought I typically give to such questions as who on Facebook gets to see information about my family and relationships, my work and education, and the posts that I create. Going forward, I’m sure I’ll stop thinking about these issues but — for a moment — they were upfront and center.

It reminds me of how many things we do on the Web without really thinking about them. Just about every site we interact with has some type of privacy policy, but how many of us actually read them? I sometimes skim the policy if it’s a site that’s asking for personal information, but skimming — especially for a non-lawyer like me — is far from understanding. And truth be told, there are times when I’ve failed to even click on a site’s privacy policy.The same is true with “terms of service,” or TOS. These terms — which are on Facebook, MySpace and just about any other site where users are allowed to enter information — are actually a contract. Your responsibility is to read them, understand them, and either agree to them or not use the site. But like those long and complicated rental car contracts that very few people read or those signs at parking lots that say “This Sign Constitutes a Contract — Read It,” most of us never do.

Then there are those EULAs, which stands for “End-User License Agreement.” They’re on almost all software packages, some Web sites and some free plug-ins that we download from the Internet.

Several years ago the Web site PCPitStop.com included a clause in one of its own EULAs associated with free software that promised anyone who read it a “consideration,” including money, if they sent a note to an e-mail address listed in the EULA. Over four months, more than 3,000 people downloaded the software, but only one person followed up with an e-mail. That person was rewarded with a check for $1,000.

This experiment was conducted during the height of the spyware epidemic in which businesses were giving away free avatars, emoticons, password trackers and other software in exchange for getting user permission to put all sorts of advertisements in your face. While spyware has diminished, those days are not completely behind us.

I’m not trying to beat up on people for being in a hurry to get that software or log into the cool site, but perhaps we should pay a little more attention to what we’re “signing” with a click of a mouse.

The Facebook solution is far from perfect. It, too, has its default. And if you rush through it, you’ll wind up exposing much of your content to “everyone” rather than the more granular “friends” or “friends of friends.” And some people might not notice that Facebook has changed its privacy policy to make some information public for all its users, including name, profile picture, gender, networks you belong to, friend lists, and pages you affiliate with.

Facebook has a good argument for making this information available — it helps others find you even if you have a common name. But it takes away the user’s option of hiding this information, though you can leave some of these fields blank. Bottom line: Even with Facebook’s more transparent privacy settings and forced transition tool, users are going to have to be alert.

At the end of the day, it’s all about people thinking critically before they click or volunteer information. While I don’t suggest we all go out and hire lawyers to read every EULA and TOS put in front of us, I do think we need to slow down just a bit and put a little more thought into what we’re doing and disclosing online.

Going forward, I hope other sites take their cue from Facebook and work harder to make sure people have to put a bit of thought into their privacy and security, and what they’re giving in exchange for what they’re getting from the site.

“As far as we know, it’s the first time in the history of the Internet,” said Facebook spokesman Simon Axten, “that so many people have been required to make affirmative decisions about their privacy.”

The company on Wednesday provided details of the changes that CEO Mark Zuckerberg blogged about last week. These include eliminating regional networks and giving users more granular control over who can see individual pieces of content while making some basic profile information available to everyone. Also, Facebook is simplifying what this blogger and others have criticized as overly complex privacy controls, but it is also requiring members to make some information available to the public.

All Facebook users will be asked to configure privacy settings
(Credit: Facebook)

Controversial privacy history
Over the years, Facebook has been the subject of criticism, lawsuits, and threatened federal action over various changes to its privacy policy.

In 2007, Facebook announced its Beacon advertising service, which broadcast member activity on partner sites to their Facebook friends. If you bought a movie ticket on Fandango, for example, all of your Facebook friends would immediately know about it. The Beacon program unleashed a campaign from consumer advocacy groups including MoveOn.org as well as a class action law suit that was settled this September. As part of that settlement, Facebook agreed to shut down Beacon and to donate $9.5 million to an independent foundation to “fund projects and initiatives that promote the cause of online privacy, safety, and security.”

In February of this year, Facebook found itself at the center of another privacy storm after it announced a change in its policy that would give the company seemingly perpetual control over user-supplied content. That prompted the Electronic Privacy Information Center to threaten filing a complaint with the Federal Trade Commission and also led to the formation of a Facebook group called People Against the new Terms of Service that attracted nearly 150,000 members protesting the changes. The uproar caused the company to rescind those changes and resulted in CEO Mark Zuckerberg holding a press conference where he announced that the company would create “a new approach to site governance” so that its decisionmaking would be more transparent.

Mandatory privacy settings
All users will soon be confronted with a “privacy announcement” informing them that they must configure their settings. Initially, you will be able to “skip for now” but you will later be required to go through the steps in order to continue using the service, according to Axten.

To encourage people to share information, Facebook has set the default to “everyone,” but you can later go back to set more restrictive settings. You can also keep your old settings. If you’re not sure what they are, you can display them by hovering over the radio button.

In the final step, Facebook displays your settings and gives you a chance to change them. At this point or at any time in the future you will be able to adjust any of your settings

Final stage verifies new settings.
(Credit: Facebook)

The Facebook settings will be based on four basic levels: friends, friends of friends, everyone, and customize. If you belong to a network, you will also have the setting friends and networks. As before, you will also be able to customize settings to include or exclude specific friends or groups of friends.

Some information must be publicly available
Some information–including name, profile picture, gender, current city, networks you belong to, friend lists, and pages you’re a fan of–will be available to everyone. The only way to keep that information from the general public is to not include it as part of your Facebook profile. Users also have the ability to limit what can be found via a search on Facebook and what information Facebook will make available to search engines like Google and Bing.

According to Axten, that information is being made publicly available to make it easier to find people using Facebook search, especially people with common names. If you locate a “John Smith” in a Facebook search, seeing his picture and knowing where he lives can make it easier to pinpoint the right person. Though not mandatory, Facebook, according to a spokesperson, is encouraging people to make other information public such as where they went to school or where they work. However Axten added that if a user had previously configured their privacy settings, they should keep what they already have.

While adults have the option of making content available to everyone, the maximum exposure available to users under 18 will be friends of friends or school networks.

Control over who gets to see your posts
The most important change is that you will now be able to specify who can see each piece of your content including status updates, photos, and videos. Each time you add content, you’ll be able to determine whether it can be seen by everyone, friends and network, friends of friends, only friends, or a custom setting. Customized settings allow you to include or exclude individual people or lists of people. For example, one could share last night’s exploits with his fraternity brothers but not with his fellow church members or office mates. The list feature, which has long been available, allows you to divide your friends into groups. For example, as a journalist, I encourage readers to “friend” me at Facebook.com/larrymagid, but I also maintain a list of “real world friends.”

Third-party application settings
As in the past, you will have some control over the information that can be seen by operators of third-party Facebook applications. Facebook has added the ability to fully block an application from accessing any information but, in most cases, that will disable the application.

Facebook’s Axten said that application developers will have access to all publicly available information, but can only access other information with the user’s permission. Applications are also required to only access user information that is essential for them to run. The company, said Axten, has an enforcement squad to ensure compliance.

Facebook is also launching a new Privacy Center that will offer “a comprehensive guide that helps users understand and control how they share information.”

Disclosure: Facebook is one of several companies that provides support to ConnectSafely.org, a nonprofit Internet safety organization I help run.

This post first appeared on CNET News.com