Inside Facebook

While the results that many application developers have been seeing since the Facebook redesign launched last month have been mixed, some developers are finding ways to grow fast in the new Facebook world. One such developer is SocialCalendar.com, makers of the shared calendar and gifting app SocialCalendar.

In the last month, SocialCalendar’s monthly active users has nearly doubled - from 2.2 million at the end of September to nearly 3.9 million today. Why?

Raj Lalwani, CEO of SocialCalendar.com, says that growth can be attributed to:

1. The inherent virality of the application’s core functionality - adding friends’ birthdays (and other events) to your Social Calendar is a very natural use case that leads to application growth
2. The compelling context of the application’s emails and notifications - reminding users to send a message or give a gift to their friends when it’s their birthday or a national holiday works quite well

SocialCalendar’s growth shows that applications which provide new kinds of value to Facebook users can still achieve rapid growth in the new Facebook world. But the SocialCalendar developers admit that it takes a lot of work - the team of 3 in Silicon Valley’s Sunnyvale and 10 more employees in India say they couldn’t have gotten where they are today if they hadn’t been able to dedicate much of their efforts to developing full support for all the new and changing Facebook viral features.

SocialCalendar’s business plans call for pressing hard into gifting and gift cards, and the app has full integration with Amazon’s API for gift giving and wish lists. Soon, the company will make a natural move into high margin virtual gifts for users who wish to send pixels instead of physical goods - a business that Facebook has been doing very well in lately.

We’ll stay on top of SocialCalendar’s growth and other apps that are experiencing big shifts in traffic in the new Facebook world.

Most Facebook users have noticed the “updated” application menu system in the new Facebook by now. Although the current system is not set in stone, over the past few weeks the current application menu and bookmarking system has come under fire from developers on the Facebook Developer’s Forums.

Why? The new application bookmarking system has been pinned as a primary cause of developer uncertainty with the new design in recent weeks.

The Problem

The argument being offered by many developers is that the new system currently does not allow users to easily find applications they’ve already authorized/accessed - focusing most of the blame on Facebook’s relatively abrupt change to application bookmarks as the dominant way to access applications. This leaves users who accidentally leave an application before getting a chance to bookmark it without an easy way to find it again.

There are other (though less commonly used) methods with which users can find their favorite applications. For example, users can begin typing an application name into their search bar to go directly to that application. Second, profile tabs are another way to regain user engagement. However, while these alternatives exist, they are not adequate substitutes for a system in which users can access their applications in a fashion more similar to that of the old profile design.

Facebook’s Perspective

In a recent related bug report, Facebook’s Julie Zhou writes:

We’re working on improving the discoverability of bookmarking functionality as well as the clickthrough of the apps in the application dock. This is a top issue we’re working on, and we’re already running a few a/b tests to try and understand where users are falling off.

I want to address our thinking about the bookmarking functionality and why we chose explicitly not to put every authorized application in there. Basically, authorizing an application means a user is trusting the app with some amount of their information. Some apps need that additional information to work. Other apps don’t, and may be able to function completely based off of the information we give to all apps (like friends list, user id, etc.) We can’t lump bookmarking, which are an indication of a user’s desire to go back and use that application in the future, with the concept of permissioning.

So where is the middle ground between the current system where users bookmark applications manually and an overkill system where every authorized app appears in a user’s applications list?

Proposed Solution

Here is a modification to the system that solves both aforementioned problems. This was actually first introduced early in the Facebook redesign process when the application menu existed on the top menu bar, but was (for some reason?) removed when the applications menu shifted to the bottom menu bar.

Facebook should simply bring back a “Recently Used Applications” section of the applications menu. This list could feature no more than the 5 most recently used applications which haven’t already been bookmarked. This prevents clutter. In addition, users could bookmark applications by dragging them from the “Recently Used” list to the “Bookmarks” list.

This idea has the following benefits:

From a user’s perspective
1. It shows users an application they used recently but might have forgotten the name of or how to get to.
2. Frequently used applications will consistently show up in the “Recently Used” list, serving as a backup bookmarking system if the user doesn’t perform traditional “bookmarking.”

From a developer’s perspective
1. It promotes bookmarking by allowing users to quickly bookmark an app they’ve recently used by dragging and saving a few clicks.
2. It promotes bookmarking by making the very clear distinction between “bookmarks” and “just some application I tried” whenever they click on the apps menu.

Conclusion

It’s taken a lot of effort on the part of developers (over one month of talking on the Developer’s Forum) to engage Facebook in a discussion about the shortcomings of the new system. It’s also important to point out that this proposal is not the only possible solution developers have come up with. There are several other ideas floating around in the thread - most of which have been highly debated and scrutinized for weeks.

With developers themselves unable to agree on a solution which works the best, it is easy to see why Facebook would have an equally challenging time. With changes looming ahead, keep an eye on your application menu - there are sure to be improvements in the near future.

When the Facebook redesign launched a few months ago, Facebook added a new ad placement on the right rail of the home page. This placement is constant in position but flexible in terms of the types of advertisements that advertisers can place there. While Facebook is still testing the performance of many of these ads with top advertisers, here’s a rundown of the 6 types of home page advertisements you can purchase (if not now, soon) on Facebook:

1) Event Ad

The Event Ad is integrated with Facebook Events and includes an “RSVP” call to action. When RSVP is clicked, full event details are displayed, including the number of Facebook users and friends attending. Friends’ responses are visible beneath the ad after they have RSVP’d.

2) Video Ad

The Video Ad is integrated with Facebook Video and can be played in line. Friends’ comments are visible beneath the video, somewhat like a “wall.”

3) Gifts Ad

The Gifts Ad is integrated with Facebook Gifts, and includes an in-line gift giving call to action. When friends give or receive gifts, it’s visible beneath the ad, along with any comments.

4) Page Ad

The Page Ad is designed to drive fans of Facebook Pages, and allows users to become fans of a Page in line. When users become fans, it’s listed beneath the ad for friends to see.

5) Website Ad

This is similar to any other web advertisement out there - clicking the ad just takes you to the advertiser’s website.

6) House Ad

Facebook backfills the home page inventory with house ads to invite friends and check out Facebook features.

When it comes to monetizing their ad inventory, most big Facebook application developers take a multi-pronged approach. Some are able to sell directly, and some work through rep firms. But the majority of developers spent their time testing different remnant ad networks and the like. That’s where a new conference in San Francisco next month comes in.

AdRevenue08 is a one-day event November 14 dedicated to questions surrounding improving unsold inventory strategies - in Facebook applications, in social media, and on the web in general. Here are the panel agendas:

• Panel 1: The Real Difference Between Ad Networks, Ad Exchanges, and Ad Optimizers
• Panel 2: Publisher Ad Strategies - When to Focus on Remnant vs. Direct Ad Sales
  
• Panel 3: Increasing the Value of Your Ad Inventory
• Panel 4: How Media Agencies and Buyers are Changing their Strategy to Leverage the Evolving Marketplace

“As a Facebook developer, you’ve got the choice of using ad networks specifically built for social media versus using an array of other ad networks. The conference will look at the different strategies different networks employ to monetize their inventory,” said Rajeev Goel, co-founder of Pubmatic, the organizer of the event. “We’ll also be delving into how you decide when to focus on direct sales vs network sales.”

Developers interested in attending can register here. Enter discount code INSDFCBK for a 33% discount through October 31.

October 28 must have looked good on the PR calendar. A year and a half after the Facebook Platform launched to hundreds of indie developers and entrepreneurs in San Francisco, Yahoo and LinkedIn each made major platform announcements today. In short:

• Yahoo announced the launch of the Yahoo Social Platform and Yahoo Application Platform, major components of the Yahoo Open Strategy. As of today, the sandbox for developers to begin building OpenSocial applications on Yahoo is now open. While specific integration points and launch dates for Yahoo apps have not been announced, Yahoo says, “We will keep you updated on the rollout schedule for embedding third-party applications within the pages of Yahoo!’s properties.” The platform is fully internationalized from the start for 31 countries.
• LinkedIn announced the launch of the LinkedIn application platform, also built on OpenSocial, that will allow application developers to integrate apps on the LinkedIn home page and profile pages. 9 applications are part of the initial app directory, including apps by SixApart, WordPress, TripIt, Amazon, Box.net, Slideshare, Huddle, and Google. LinkedIn is taking a more controlled approach to app development, focusing on productivity and communication above entertainment. Here’s the launch commercial:

As more Platforms launch, application developers focused on different markets will begin to focus their energies on different platforms. We’ll be tracking which Facebook developers build for Yahoo and LinkedIn, and whether any nimble developers clone Facebook apps as they did on MySpace. Which Facebook apps do you think would do well if ported and adapted for Yahoo or LinkedIn?

Top social game developer Playfish announced today that it has raised a $17 million round of financing from Accel Partners and Index Ventures. Along with Zynga and SGN, Playfish becomes the third social game developer to have raised over $20 million for the creation of a new wave of social games.

Playfish will use the money to build out its game studios around the world.  It already has offices in San Francisco, Beijing, and Norway.

As we noted last week, Playfish sports 4 of the top 10 applications on Facebook. Collectively, the company has over 10 million monthly active users on Facebook alone, though it will be moving onto other platforms soon. Playfish released its first games on MySpace in recent weeks.

See more on the funding at Inside Social Games.

As the Facebook Platform matures, an increasing number of social media agencies are bringing brands into the Facebook world by way of Facebook applications. Not just application developers, these agencies are increasingly working with clients directly to set strategy and design the rules of the campaign — and then manage the promotional spend inside Facebook once the application is launched.

Votigo is one such agency based in Emeryville, CA. The company has been doing social media campaigns since 2006, and since the Facebook Platform launched last year, has been building a big part of its business bringing brands into Facebook. (Note: Votigo is also an advertiser on this blog.) We sat down with Jim Risner, Votigo’s President and CMO, to learn more about the company and the trends he is seeing in the marketplace.

Thanks for your time Jim. Can you give us a little background on Votigo?

Sure - I started the company in 2006 with Mike La Rotonda. I was previously VP of Interactive Design at United Online (Juno, NetZero, Bluelight, etc.), and Mike was a PM at Yahoo (worked on 360 and other social products). The initial premise for Votigo was a video-focused UGC community site, but we quickly got interest from big brands and agencies wanting to take what we had and skin it for their own brands. So for example, we did a video contest with Victoria’s Secret PINK and received hundreds of entries and 100,000’s of visitors. From there, things snowballed, and we went from a B2C company to more of a B2B social media agency.

We have our own community platform for user generated photo and video contests that can be deployed anywhere. They’re all completely branded and centered on the campaign.  We do Facebook apps, OpenSocial apps, and branded community sites as well. Now, our focus is really on social applications and UGC campaigns.

What kind of campaigns are you doing on Facebook now?

When Facebook opened the Platform, we immediately started building there. We’re releasing a new version of our contest application this week actually, that we’re using to sell branded photo and video contests. For example, we recently did one for Kohl’s department stores with Appssavvy and Universal McCann. We did all the development and design, based on our contest platform.

We’re also building deeper custom applications. Just last Monday we launched an application for a political organization called Who wants to be president? Inside the app you earn points by sending faxes to Congress and inviting friends. The application uses components from our contest platform, which we try to leverage them as much as we can.

When promoting applications we’ve built inside Facebook, we always keep users inside Facebook - either on the application itself or on Pages - not to an external website. Pages are a great option too, and we’re doing more of that.

What parts of your business are you the most bullish on?

The parts of our business that we’re really most bullish on at the moment are Facebook applications (and soon Facebook Connect) and the video contests. Unlike some others, we don’t see applications as being short lived (except for contests) - we see them as being a part of your business. When we do them, we think long term.

We’re also seeing some traction internationally on OpenSocial. We built an app on Orkut called Rate People that has had 33 million visits from 15 million uniques since July - so we’re doing well in Brazil. So we’re also selling some sponsorships directly ourselves.

Thanks Jim. Any final thoughts?

It’s fair to call us a social media agency, but we also have a strong technology platform. For some clients, we do everything in house, but we also work with agencies who manage the design and are able to then leverage our technology and our platform.

As more companies engage with consumers on Facebook and other forms of social media, opportunities for those interested in spreading misinformation or disparaging comments will inevitably increase.  But how companies engage with and respond to these situations has just as much if not more impact on brand equity than the initial attacks themselves.

Last week, Virgin Atlantic launched an investigation of several of its own crew members who allegedly criticized the airline’s safety standards on Facebook, BrandRepubic reports. A Virgin Atlantic spokesperson said in a subsequent statement,

“The airline has started an immediate disciplinary investigation. Virgin Atlantic does not tolerate any criticism of its passengers or industry-leading safety standards and is taking this matter very seriously. Safety is the airline’s top priority and we operate our fleet of aircraft in strict compliance with all manufacturers’ and safety authorities’ recommendations and regulations.”

Virgin Atlantic seems to be taking the comments about its safety procedures quite seriously. If someone posted a disparaging comment on any given message board, it’s unlikely the company would have devoted this many resources in response. Virgin Atlantic’s Facebook Page has nearly 7,000 fans, and it staffs the discussion boards on its Facebook page with active company representatives who respond to individual questions and complaints in a timely manner.

We’ll keep watching how big brands respond to “mini-crises” in the Facebook world, as best practices in corporate communications on Facebook are still being established.

New Inside Facebook Top Jobs for October 28:

• Flash Developer (Zynga / San Francisco, CA)

Last week, there was a lot of talk in the tech blogosphere about rumors originally reported by the NY Post that Facebook is stirring the music pot again by talking to potential partners about putting together a deal to integrate their music experience inside Facebook.

Facebook is rumored to have had conversations with Rhapsody, iLike, imeem, and Lala. Obviously, potential partnerships with these would look quite different depending on the partner, since some (Rhapsody and imeeem) have streaming music deals with record labels, others (like iLike) don’t (iLike actually has a deal with Rhapsody).

When asked about Facebook’s music plans, a Facebook spokesperson issued the following statement: “Facebook is committed to its mission to give people the power to share and make the world more open and connected, and we recognize that music sharing plays a part in that as well. We cannot comment on specific initiatives, but are always talking with potential partners to pursue opportunities that help us deliver on our mission.”

Ultimately, the potential business opportunity that an in-house music service offers Facebook is enticing but must be carefully weighed and managed in light of the trust that Facebook has built with the application development community, many of whom have built music-related applications. The business questions are complex, and it will not be simple for Facebook to navigate these waters if it moves forward with a big in-house music service.

Which application developers would be most affected by Facebook Music?

1) iLike - iLike, one of the most popular applications on Facebook since day 1, is the biggest developer of music apps on Facebook by far. Its Facebook business shows over 5 million active users per month of the core iLike application alone, with many more users to its applications designed for artists with Facebook Pages. It’s also one of the companies Facebook is reportedly talking to about a partnership.

2) Playlist.com - Music Playlists is the second largest music app on Facebook, with over 500,00 monthly active users.

3) ReverbNation - ReverbNation’s family of apps reach nearly the same amount of monthly users, serving bands and fans alike.

4) Fendoo - Fendoo’s Music Player lets users stream music for free on Facebook.

5) Qloud - Qloud’s My Music app lets users play music from their iTunes library inside Facebook.

Facebook application developers will be following the possible creation of Facebook Music closely to see how the company’s decisions might affect their opportunities on the Platform. We will of course have all the details as Facebook makes its plans over the coming year.