Inside Facebook

The New York Times introduced Facebook integration earlier this week, allowing users to more easily share stories to Facebook, and see what stories their friends have already been sharing.

It’s using the social plugins that Facebook launched in April, including the Like/Recommend Button, similar to what rivals like The Washington Post have already been doing. As we’ve been covering, a diverse range of media outlets have reported that the plugins have helped increase traffic.

The integration is opt-in and merges a user’s existing nytimes.com account with their Facebook network; after doing so, the user will be able to see which Facebook friends have recently recommended stories, and lets the user recommend stories to Facebook directly from nytimes.com. The Times notably chose to use a closed system whereby users will only see activity from their Facebook friends but not from other Facebook users.

Part of this feature is also to aggregate the most recommended stories into a feed on the Times’ web site. The New York Times created a FAQ section for users with questions about the new set up.

The New York Times’ implementation of Facebook’s features most closely resembles what The Washington Post has done. The Post has both the Recommend button and Share button and a news feed with Facebook friends and most Recommended stories.

The Wall Street Journal’s web site also implements an activity feed, which may include recommendations from your Facebook friends if you’re logged in, as well as a Share option and a Like button.

Other papers have not gone so far. The Los Angeles Times doesn’t prominently display its Facebook integration icon, and it also asks the user to fill out a cumbersome form with information like gender and birthdate. Once the user is signed in, the only difference is being able to Like or Share an item with your Facebook account. USA Today is still promoting its web site login, and doesn’t implement plugins and only allows for Facebook use in sharing stories.

As part of a series of announcements today at a press event in San Francisco, Apple made clear that it is planning to build its own social networking features. But how big are its social aspirations? The new version of Apple’s iOS software, 4.1, is due out next week, and it will include the Game Center, a social network service designed specifically for mobile games. That’s been in the works for awhile, and is relatively simple — more surprising is Ping, Apple’s new music social network, designed for iTunes.

Both are analogous to other hardware-based services that have been on the market for years, not social networking sites. But it’s easy to wonder where Facebook is in all of this given Apple’s new social focus — that is, besides the subtle Facebook integration into the new music service. Up through last January, Facebook was getting a lot of attention from Apple, appearing as example services during stage presentations, and consistently reaching the top of the iTunes App Store charts. The trend had been building for a while, as we noted last December.

Is Apple looking to build its own social platform now? Aside from a simple integration in Ping, Facebook is absent in these latest launches, as are all other third party social networking services, like Twitter or MySpace. Here’s a closer look at what Apple is launching, what the moves indicate about its plans for the future, and how Faceboook could be an ally or a competitor.

Game Center: Sort of Social

First up is Apple’s Game Center, a new iOS app and API that lets you play games with friends and strangers, and lets developers add integrated social features to their games. Somewhat similar to Xbox Live, or third-party social platforms like Scoreloop, Aurora Feint and Ngmoco’s Plus, it includes basic features like leaderboards and achievements. While Apple didn’t go into much more detail today on how exactly the social features will work, previous reports indicate that the app will let users sign in with their Apple IDs (what you use for iTunes, etc.), create and identify each other by nickname, send person-to-person notifications and a way to “Find Me by Email” — meaning email invites and requests about games, potentially. It also includes a matching service to let find non-friends to play, and to create multiplayer games.

We’re waiting to see just how social the Game Center gets. If Apple can effectively tie in its identity system and invites, it could spur more people to share games with friends, and gain traction. If it’s too hard to use, or doesn’t make identity meaningful and easy, it could just stay a relatively peripheral, contained system like Xbox Live’s social features — and not become a significant new social platform feature for third parties. So far, Apple seems more focused on traditional-style games, as it showed off Epic Games’ new title Project Sword on stage, but nothing else. Previously, though, it has shown off iOS social titles like Zynga’s FarmVille for the iPad.

Apple ID is not currently a comparable service to Facebook, in that there’s no central site interface, network of real-life friends, or set of communication channels along the lines of what Facebook has. For games, Apple seems to be taking a conservative approach to making iOS games more social, not more heavily integrating phone contacts or even Facebook integration, as many iOS games have themselves done while it sees how the concept performs with users.

Ping: More Social, But Still Limited

Even more interesting is previously-rumored Apple’s music social network, Ping. The company framed it as a more music-focused alternative to Facebook and Twitter, in those words. The more direct assault is on MySpace, though, including MySpace Music, and its iLike applications on Facebook. Available for iTunes 10 today, it has all the features of a music social network, reminiscent of third-party social plugins for iTunes that have been out for years, and offered by iLike and others.

Ping is simple, and borrows heavily from popular interface designs. It lets you share and consume a variety of music-related information using the follower-followed model as seen on Twitter and other services. You can follow artists, and see a page of what they’re listening to and sharing, and where they’re playing live venues. Individuals have their own pages, showing what they’re listening to, as well as their reviews of songs, and other activity. And a Recent Activity page shows you the latest from everyone you follow, all in one place — overall, the interface will remind users of Facebook and Twitter.

On the social front, you can Like or Comment on any item, and you can also search for friends on the site, or invite them via email or Facebook. We haven’t gotten a look at the Facebook integration yet, but according to its splash page on the launch, Apple appears to be asking users to share their friends lists with it, then using that information to determine which ones are also using Ping.

Other features include custom charts of albums and songs you might like, and ways to buy. You can listen to 30 second samples of songs, and click to buy them through iTunes, with Apple getting its cut per its relationships with record labels. Third party music discovery services also tend to link digital and CD sales to Amazon and other sites — Apple is effectively closing that loop with Ping, ensuring that it always gets a cut when people find music they want to buy. If you want to buy tickets, and you might, as there will be 17,000 concert lists in the app, Apple will funnel you through Live Nation to complete the process.

Today, CEO Steve Jobs also said that you’ll be able to configure your settings so that you can approve who follows you, promising that “you can get as private or public as you want,” and, in what might have been an allusion to Facebook’s historically complex controls, he added that “the privacy is super simple to set up, anyone can do it.”

Ping, as an app for iTunes, will only available on iTunes desktop clients, and on iPhone and iPod devices. In contrast to most other methods of music discovery, it does not span platforms or include a central web interface. But iTunes still has 160 million users, as Jobs was careful to point out today, so that’s a very large closed market, that is continuing to grow with the proliferation of Apple hardware products around the world.

What Are Apple’s Social Plans?

Ping and the Game Center, announced on the same day, might lead one to the conclusion that Apple is trying to create its own social networking features. And that’s not all — the company has been busy filing a variety of social networking-related patents since the start of this year. One was iGroups, a location-focused real-time messaging service. Another is for a set of mobile contact and social networking syncing features, that happen to prominently feature Facebook.

Many pieces of evidence point to Apple’s own social ambitions. If it one day decides it wants to build a centralized social platform for the web, like what Facebook is in the process of doing and like what Google wants to do, then it has pieces to do so. You can imagine being able to build out your Apple ID, carefully managing your account for various purposes, from gaming to music to enterprise collaboration, and even photos — photo-sharing is a key component of Facebook, and Apple has millions of people already using iPhoto, especially due to its phones.

The concept of tying together different social networking niches is what Google appears to be trying to do now.

However, Apple might just be trying to build its all these services to provide specific value to existing products. No one has built a large, high-quality social graph to rival Facebook’s, to date, although Twitter and Google are trying in their own ways. As Google is showing, figuring out how to create a service that is more than the sum of its parts is about nailing user psychology, not cobbling products.

There are also signs that Apple might be planning to do more with Facebook. For one, Facebook has the single largest app in the App Store. A recent interview with Facebook Effect author David Kirkpatrick has more on that:

It’s so heavily used compared to other apps that I have been told by someone who thought he knew the data — this is highly secret data and I don’t know the actual numbers — that more than half of all usage of the iPhone of apps, other than those provided by the phone itself like telephony and email, is coming from Facebook. And on the iPad, too, it’s just a huge, huge part of usage.

Apple might be envious, but it almost certainly wants to take advantage of what Facebook has already built. The Ping integration today is one small example of that. Another is code pointing to a feature that would allow device owners to more easily upload video to Facebook. And then there’s some more information from Kirkpatrick. “So in a way, Apple and Facebook are joined at the hip, and I think that’s one reason why Zuckerberg and Jobs have been spending time together.”

Zuckerberg and Jobs wouldn’t be spending time together if Zuckerberg thought Jobs was busy plotting a rival service. But they would be spending time together if they were exploring how to partner, with Facebook providing an underlying set of social features and Apple providing hardware and hardware-driven software products.

Given how early and niche-specific Apple’s social networking efforts are, and how prevalent Facebook is in the world and on iOS devices, we still could see a partnership emerging, rather than a rivalry.

[Screenshots via Gdgt, Engadget, TechCrunch and Patently Apple.]

While July’s charts finally began showing signs that the continual drop in monthly active users (MAU) was tapering off, this past month has witnessed new falls. Of the veterans to this list, 16 experienced losses, with most well north of a million users. However, while some blame can be placed on Facebook’s constant changes and updates to the platform, the appearance of four new titles — two of which are not from the major social game developers — suggests that social game players may be looking for fresh ideas, and not always iterations on the same concept. From the vastness of Playfish’s Pirates Ahoy to the highly polished clubs of Booyah’s Nightclub City, the games that are trying to raise the bar in both design and creativity have also been the ones that are growing fastest.

It’s important to keep in mind that many of the largest games on this list also launched long ago, like Playfish’s Petville and Zynga Poker. Perhaps we’re starting to see some natural decline among the oldest titles?

As a side note, even with the applications that have lost numbers, it may not be as bad as it appears. Facebook has had a number of reporting bugs that may have skewed MAU counts for some games, giving them higher than normal numbers.

> Continue reading on Inside Social Games.

Following recent efforts by Zynga, Playdom and other social gaming companies to launch pre-paid cards for virtual goods in stores, Facebook is going direct — starting this Sunday, it will allow users to buy pre-paid cards for its virtual currency, Credits, within 1,743 Target retail locations across the US and on Target.com.

Cards can be purchased in $15, $25 and $50 increments, similar pricing to what you’ll see for a wide variety of other pre-paid game cards already available in Targets and other stores around the country.

Facebook itself is also helping to push the new integration, by including a Target store finder on its official Credits splash page. When users click on the “Redeem Gift Card” in the Facebook Credits gift cards section of the Credits page, they’ll see a popup window asking them to enter the scratch-off number on the back of the Credits card. Clicking “Redeem Now” will add the amount of Credits purchased to their Facebook account.

Social gaming companies have increasingly experimented with stored value cards as an alternative payment method for virtual currency and virtual goods over the last year, with mixed success in different geographies around the world, we hear. MMO game developers, iTunes and many other digital goods sellers have already used these cards. Facebook is going through GMG Entertainment, a card provider who is already partnered with gaming and virtual entertainment companies like Stardoll, Three Rings, NBC Universal and more, and a variety of retail chains. Zynga and Playdom have partnered with InComm for card distribution services; they and other developers have been going through a variety of retail partners, too, including 7-11 convenience stores, coin exchange kiosks, and other options.

The company has repeatedly said that it aims to provide hundreds of payment options for Credits through partners, so expect it to continue expanding with real-life card sales as part of that effort. It already offers Paypal, mobile payments through Zong, Rixty cash machine exchanges, Malaysia-based MOL Points payments, gift card exchange through Plastic Jungle, and a variety of other options.

The virtual goods market is expected to reach $1.6 billion in the US alone this year, according to our Inside Virtual Goods report, with $835 million coming from social games alone. Meanwhile, Facebook itself has moved to make Credits the exclusive payment option in all platform applications, by the end of this year. We expect these cards to begin making money for the partners immediately, and should contribute to the volume of Credits on Facebook — a way that the currency will make more money for developers. So far, Credits are being used in 150 games and other applications, made by around 70 developers.

One final note: we haven’t gotten the chance to try these cards yet, so it’s not clear if this is the best value. Credits normally redeem at a $0.10 to 1 Credit rate, but certain payment methods sometimes extract a larger fee that reduces what users get. Facebook also offers bulk discounting in games, so you can pay less for larger amounts of Credits purchases. [Update: Facebook says that the Credits conversion rate is 1:10 as usual for these cards, and it also reiterates that the payout to developers is the same regardless of the payment method.]

To dig deeper into the social gaming market, check out our recent report: Inside Virtual Goods: The Future of Social Gaming 2010.

It’s a Windows Live Messenger week yet again, with the messaging utility coming in as the top non-game title on our AppData list of fastest-growing Facebook apps for the second week in a row.

Before getting started on the list below, note that Facebook has updated its formula for calculating active app users to remove those users who only interacted with an app through a like or stream comment. Some apps may appear to lose large numbers of users from the change, although mainly in the mobile category.

Here’s the top 20:

	Name	DAU	Gain	Gain,%
1.	City of Wonder	824,870	+438,684	+114%
2.	Windows Live Messenger	4,440,375	+291,977	+7%
3.	FarmVille	17,611,581	+274,271	+2%
4.	Frases Diarias	531,177	+241,089	+83%
5.	Entrevista tus Amigos	1,806,748	+201,108	+13%
6.	Millionaire City	1,294,695	+169,201	+15%
7.	Nightclub City	1,255,333	+144,507	+13%
8.	Car Town	793,697	+103,130	+15%
9.	Pet Society	2,490,160	+86,598	+4%
10.	HTC Sense	2,315,963	+71,590	+3%
11.	Kingdoms of Camelot	773,238	+69,188	+10%
12.	Ninja Saga	882,690	+68,624	+8%
13.	開心 Lounge Bar	319,743	+68,225	+27%
14.	Bubble Island	847,314	+67,868	+9%
15.	Mall World	879,190	+63,192	+8%
16.	The Hotlist	76,935	+62,691	+440%
17.	BandPage by RootMusic	151,482	+49,102	+48%
18.	Samsung Mobile	555,998	+46,834	+9%
19.	Backyard Monsters	224,983	+45,888	+26%
20.	@Smiles	773,927	+44,063	+6%

Ranking over even Messenger is City of Wonder, the newest Playdom game. This is the closest thing that Facebook has gotten to the time-honored Civilization series so far, so if you’re a fan, give it a try. We cover the other games, as always, over at Inside Social Games.

As for Windows Live Messenger, we’ve discussed the reasons for this app’s growth before. In brief, it’s a study in close integration of an existing, successful product with Facebook; it’s unlikely that Windows is gaining many new users here, but existing devotees of Messenger are certainly interacting with Facebook through the app quite a bit.

The remaining non-game apps are mostly long-time growers that have been coming up for months. Notably, the top two — Frases Diarias and Entrevista tus Amigos — are both Spanish-language, respectively a phrase-of-the-day app and a friend quiz.

As it happens, both appear to be losing monthly active users, while DAU is climbing somewhat. This may mean that these two apps are affected by Facebook’s tweaking of its formula, as mentioned above. HTC Sense, a mobile app, was definitely affected in its MAU stats, although its DAU has risen throughout the changes.

Dropping down to number 16, The Hotlist is an app we haven’t seen come up before. Based on a website, the Hotlist crawls your social networks to find events and places that your friends intend to be, and even gives a male to female ratio for its locations. Keep an eye out for our closer look at the Hotlist later.

Facebook made a change to the way that it counts active users for applications starting last Friday. Now, likes and comments on stream content published by the app are no longer counted. The results of the change are already very visible for many apps on AppData, but Facebook says the calculations are still in progress, so the numbers for all apps may not yet be updated.

This change affects all apps, Facebook says, but active user counts for mobile apps will be most significantly affected, because many of them generate user content that gets a lot of likes and comments. This explains some of the wild swings we’ve seen in the active user counts lately for Facebook’s own mobile apps as well, like Facebook for iPhone.

Conceptually, we think this change to the way Facebook calculates active users for applications makes a lot of sense. People who like or comment on stream content published by an app shouldn’t be counted as active users like canvas page viewers are.

Editor’s note: The following data is an excerpt from Inside Facebook Gold, our research and data membership service covering Facebook’s platform and advertising ecosystem.

Nevermind China’s country-wide block on Facebook; the Chinese language is still the ninth-largest language on Facebook, thanks to Hong Kong, Singapore and Taiwan. Chinese is growing at a steady pace, and it’s beginning to draw the attention of some of Facebook’s biggest players.

Zynga is a case in point. Two weeks ago, the top social gaming company published a Chinese-language version of Zynga Poker, one of its flagship apps.

But rather than trying to reach China with the new game, where Zynga Beijing helped localize the app, the company settled for a release to Facebook’s 11.5 million Chinese-language users.

There were likely several motivations behind Zynga’s Facebook launch. The first is that China is not an easy market to push into, for a foreign company. The Chinese government requires that outside entrants be partially owned by a Chinese company — a hurdle that Zynga may not want to cross until it’s sure the project is worthwhile.

Luckily, Facebook can provide a great litmus test for entering the mainland. Hong Kong is an administrative region of China, while independent Taiwan is still culturally close (and often claimed by China as a province).

On Facebook, Zynga Poker will be competing for this cuturally Chinese audience, with actual Chinese game developers like Elex and Boyaa, which has its own successful poker game. The results should tell it how it might do in China.

There are other reasons to enter Facebook’s Chinese-language market beyond just testing for China itself, though.

The second is that the Chinese-language user group will likely contain more social game players, proportionately, than a similarly-sized group of English or Spanish speakers. Among the 11.5 million Chinese-language users, a large majority are visiting Facebook just to play games, judging both from what we’ve heard and seen in user behavior.

Additionally, these are users who not only play games, but spend freely on virtual goods within their games experience (as a side note, the virtual goods industry is estimated to surpass $5 billion this year). So, the East Asian user base is not only growing but also valuable. Here’s a rough estimate of how the Chinese-language market could continue to grow into next year:

The total population of Hong Kong, Singapore and Taiwan is around 35 million users, so there will obviously be some upper boundaries to growth; however, localizing existing games looks like a winning proposition from here.

As for the users themselves, our look at the performance of three apps in Taiwan earlier this month shows that there are more differences.

For instance, the average age of users playing the largest three games is around 27. In the United States or another Western country, the average age for a give group of apps would likely be a decade higher.

These youthful users, who have a strong propensity to put their disposable income into online activities, may also be cheaper to acquire than their counterparts in Western markets.

Here’s a look at cost-per-click ad rates across the three big Chinese-language markets:

For developers that do want to move their apps over, a Beijing office isn’t necessarily vital; some publishers in the region are offering localization services to Western developers, including Hong Kong-based 6waves, which we interviewed on the subject in July.

The full Facebook Global Language Report is available through a membership to Inside Facebook Gold, which also includes monthly data on total global audience growth and demographics. To learn more or join, please visit Inside Facebook Gold.

Today Facebook won a patent filed in 2004 for a search engine which ranks results or online ads based on the frequency of clicks by those connected to a user on a social network. Results would be accompanied by an image or text denoting how many people connected to the user clicked that link, similar to Facebook’s Like button/counter. The patent could, in theory, be used to create a search engine based on the clicks of one’s friends and friends of friends, or stifle a similar product of Google’s forthcoming social network Google Me.

The patent, filed for Facebook, Inc. on October 18th, 2004 lists Christopher Lunt, Nicholas Galbreath, and Jeffrey Winner as inventors.

It says a connection can be between “registered users who are related within two or more degrees of separation to the registered user within the online social network”. This leaves the degrees of separation up to Facebook, meaning results could be based on clicks by your friends, friends of friends, or every registered Facebook user. Searching for humorous content with results ranked by what your friends clicked could produce a more valuable experience than rankings based on clicks from across the web.

However, the patent doesn’t specify if results can be based on shared user characteristics, or connections to non-users, such as Pages. Facebook might not be able to use this patent to create a ranking system based on clicks of those within your network, country, or age group; or based on clicks by those who share a connection to an interest Page. If you were searching for political news, the power to see results ranked by clicks of those connected to the same political party could be useful, but it is not covered by this patent.

Facebook might not put the patent into use on its own products, though, as the site makes money from allowing Microsoft’s Bing to power its internal search. Instead, they might use the patent defensively. Social search could be a big part of Google Me’s differentiation from Facebook, but this patent could — again, in theory — restrict such features. Facebook owns or has applied for dozens of patents at this point, but it has not gone on the offense against rivals to date.

Facebook Page tab applications marketplace Appbistro today launched its Verified Developer Program, a distinction it awards to developers offering high quality, reliable apps and strong customer support.

Chosen developer will gain the advantage of having their apps display Appbistro’s Verified Developer badge and appear at the top of search results and app category indexes on the Appbistro marketplace.

The program acts as a third-party version of Facebook’s Preferred Developer Consultant Program, except that it is specifically for Page tab app developers and Appbistro earns a 30% affiliate fee on the sale of any app in its marketplace, verified or otherwise.

Currently upon submission to Appbistro, Page tab apps are given a one to five-star rating based on virality, content management, administrative experience, user experience, and scalability. The Verified Developer distinction is awarded independently of this rating. The launch partners, who will be the first to display the Verified Developer award, are Facebook e-commerce and storefront provider Payvment, job posting tab maker Work For Us, and welcome tab builder Pagemodo. They were chosen for having valuable apps, good customer support, and a high monthly active user count.

Director of Business Development Rhett Stonelake says Appbistro is now accepting inquiries regarding inclusion in the program, but that developers new to the marketplace will undergo a 30 to 40 day trial period to vet their long term customer support before being considered.

When a developer is admitted, all of their apps will receive the distinction and the associated advantages. A self-written blurb about the developer is also added to their app profiles. There is no specific cap on how many developers can be admitted, and developers will be warned if the quality or support of their apps drops such that they are in danger of being expelled.

Appbistro says they’re aiming to solve the Page tab app discoverability problem. Since some apps with high utility don’t have inherent virality, it can be hard for admins to find them, especially since Facebook removed links to the Application Directory. The Verified Developer Program does not discriminate based on size, making it accessible to small companies or even app hobbyists as long as they meet the requirements. While the launch of the program may also be designed to bring press and traffic to AppBistro, it does provide a distribution channel for any Page tab app developer which is committed to quality.

Today Palm released the latest version of its Facebook mobile app, Facebook for Palm webOS 1.3. The official release includes many features and improvements tested on its Facebook for Palm webOS beta clients, including landscape mode, revised photo tagging, selectable news feeds, and in-feed comments. Reviews of the app complement its speed but complain about the lack of Facebook Chat and Places.

Unlike some other Facebook mobile apps which only distribute official releases, Palm lets users download beta versions of Facebook for Palm webOS between official updates. This allows the company to experiment and gather feedback on new functionalities, ensuring official releases are stable and full of improvements. For instance, the ability to toggle on or off the display of comments in the news feed was tested in Facebook for Palm webOS Beta 1.2.30 before being included in today’s release.

Specific improvements to the release include:

1. Landscape viewing mode when the phone is tilted to the side
2. Photo tagging using suggested match once you start typing a name
3. Selectable news feeds including status updates, photos, links, networks, and friend lists
4. Fan page navigation
5. Simultaneous clearing of multiple notifications

Reviews of Facebook for Palm webOS 1.3 have generally been favorable, commending the speed and stability of the features now included. Criticism has focused on the lack of certain features long existing or recently added to other Facebook mobile apps. Like those with Blackberry and Android phones, Palm users still don’t have the Places functionality included on the iPhone. Palm’s Facebook Page and forums also included requests for Chat, the ability accept friend requests, and content deletion capabilities.

Palm is listening, though. Justin Reid, one of the application’s developers, has been personally responding to reviews of the app, pointing customers with issues towards support solutions. With this level of attention and the beta release system, we expect that Facebook for Palm webOS will continue to improve.