The world's largest online social network uses the information people share on its site, along with the apps they use and the outside websites they visit, to show them advertisements deemed relevant to them.
    
In the July-September quarter, Facebook reported nearly USD 3 billion in advertising revenue, a 64 percent increase from a year earlier.
    
Over the years, the company has faced concerns from users and from government regulators and privacy advocates that its policies are too complicated. Two years ago, it settled with the Federal Trade Commission over charges that it exposed details about their users' lives without getting the required legal consent.
    
Last year, an independent audit that was part of the settlement found its privacy practices sufficient.
    
Despite criticisms, Facebook is rare among Internet companies in that it seeks user input on its privacy policy and tries to put it in plain English. But it also has a vast trove of data about its users that it uses to show ads and measure how well they work, among other things.
    
Today, Facebook introduced a tool called 'Privacy Basics,' a set of animated, interactive guides designed to show users how to control what they share on the site. Tips answer questions such as "How do I delete something I post on Facebook?" or "What do people who aren't my friends see when they search for me?"
    
It also proposed changes to its terms and privacy policy, which it calls its data policy. The new policy is much shorter and lays out how Facebook collects data and what it does with it, among other things, in illustrated subsections.
    
Users will have seven days until November 20 to comment on the new policy and the final version will go into effect soon after that.
    
The move comes as Facebook is testing a tool that lets users buy things through its site, and ramps up its ad targeting based on users' location.
    
The new policy ensures that if people use Facebook to make a purchase, their credit card information will be collected, for example. Meanwhile, the location information Facebook collects might include where you took a photo that you share on the site, or the location of your mobile device using GPS, Bluetooth or WiFi signals.
    
A recent Pew Research Centre poll found that some 80 percent of Americans who use social networking sites are concerned about third parties, such as advertisers, accessing data that they share on the sites.