When I bookmark a site into my bookmarks folder (using FF as example, all browsers are similar) the favicon is next to the bookmark link. When I add the bookmark to a bookmarks toolbar instead of the bookmarks folder for easy access it appears at the top of every page.
I always assumed my browser would cache these images the first time they are loaded but in messing around with something unrelated I realized that the favicons in the bookmark toolbar load from the source every single time I load a page.
I have my own sites bookmarked and their favicons all show up in my bookmarks toolbar so I dug into my site stats and sure enough I have a complete record of every page I have visited with this browser. The favicon was loaded every time.
I also have a list of other peoples browsing habits because they've also bookmarked sites that load my favicon. I haven't looked at it too closely yet but it's a little creepy honestly. My first reaction was to check my sites privacy policy to see if I've been violating it but I haven't since tracking is covered and I'm not even sure it applies on other sites anyway though it is specific.
For now I've removed any sites I don't own from my bookmarks and I've always disabled 3rd party toolbars(google, yahoo, bing etc) but is this a potentially huge privacy issue? Have I overlooked something? Is it just my browser behaving this way? Is something as simple as bookmarking a site resulting in privacy issues for thousands of unsuspecting people? I always assumed they loaded from cache and from the source only once...