Facebook Tries to Buy Twitter, Thinks Status Updates are Very Important

Facebook recently initiated acquisition talks with Twitter for $500 million in Facebook stock, but those talks fell apart as recently as three weeks ago, Kara Swisher reports.

Execs at Facebook, who have long been impressed with Twitter, were trying to make the purchase at Facebook’s $15 billion stock valuation. At the end of the day, Twitter investors were concerned about the valuation of Facebook’s stock, and weren’t ready to sell out to the first suitor when they believe Twitter has the potential to ride out the economic downturn.

Facebook CEO Mark Zuckerberg recently expressed his high view of Twitter when he said at the Web 2.0 conference that he was “really impressed by what they’ve done” and that Twitter has a “very elegant model.”

In separate interviews, Zuckerberg has commented publicly on how important he believes the “status update” feature is to the future of information sharing on Facebook. Instead of writing a few long blog posts, most people like posting many short status updates, broadcasting everything from their activity to their emotions, he has said several times.

When the Facebook redesign launched a couple months ago, the status update publisher was promoted to the top of the News Feed (home page), reflecting how important what some have called “micro-blogging” is in Facebook’s and Zuckerberg’s eyes.

For its part, Twitter continues to grow while continuing to invest in resolving the technical issues that plagued it earlier this year. Twitter has become an interesting communication platform in its own right, so it would not be surprising to see additional acquirers emerge for whom owning a communication utility might be strategic…

Facebook Gets SEC Disclosure Exemption as Number of Stockholders Grows

As Facebook’s rolls grow closer and closer to hitting the 1,000 mark, the number of Facebook shareholders is quickly approaching the 500 mark. The Securities & Exchange Act of 1934 requires private companies with more than 500 shareholders and $10 million in assets to publicly disclose their financial results.

But as Spencer Ante reports, Facebook has applied for and was granted an exemption which will allow the company to continue without publicly disclosing its finances. Fenwick & West’s Thomas Kim basically argued that Facebook’s restricted stock units should be treated differently, and the SEC agreed.

For those interested in learning more about the nature of Facebook’s restricted stock unit plan, including the accelerated vesting schedule in the case of a “liquidity event,” check out the letter from Fenwick & West below, courtesy of the SEC:

This Week Inside Social Games for November 23, 2008

Check out the latest news & insights this week from Inside Social Games:

Hackathon Project Visualizes Global Connections & Interactions on Facebook

While many people quip that the increasing use of social networks is actually decreasing the amount which we physically interact with others in our local communities, it’s clear that social technology is increasing the amount of interaction and information sharing happening globally.

In order to visualize the types and volume of interaction happening on Facebook at any given time, a team of Facebook engineers recently created the following visualization tool (called “Project Palantir,” but not to be confused with another one of Peter Thiel’s portfolio companies).

The amount of connecting and interaction going on both internationally and locally shows just how much social services like Facebook are bringing the world together.

Check out the full video below, or watch it on Facebook here.

Is App Verification Really a Money Tree for Facebook?

When Facebook launched the app verification program a couple of days ago, some people claimed that Facebook had created a “serious revenue machine.” Mike Arrington wrote,

If every application applied, that would be $18 million in incremental revenue to Facebook. Our guess is half or more will apply.

While important questions should be asked about how the details of the benefits of program are implemented when it actually goes live, I believe that claims that the app verification program is a new money tree for Facebook are a little exaggerated. If Facebook makes $9 million over the next year from app verification application fees, I will be extremely surprised – what’s more likely is that only a few percent of app developers will pony up the cash.

Looking at AppData for Facebook, we find that there are only 400 applications on the Facebook Platform today with over 100,000 monthly active users (about 1% of all apps), and there are only 4,400 with over 2,500 MAU (about 10% of all apps).

Making the liberal assumption that every application developer with over 2,500 MAU invests $375 per year in app verification, Facebook’s total annual revenues for the program come to $1.65 million.  If you assume that half of those applications would get a student/non-profit discount, the number falls to $1.2 million.

And what would be the rough fixed cost of administering the program? Assuming the full review process takes 1.5 hours per app per year, the total number of person-hours required comes to 6,600, or about 3 person-years. Assuming a fully loaded employee costs $100k/year, that’s $300k/year in reviewer costs. Add in 1/2 a developer it will probably take to support the program and total personnel costs come to about $400k, not including anything else in the calculation.

So, assuming 100% of the developers of the top 4,400 applications pony up the verification fee, Facebook stands to make somewhere around $1M per year from the program in incremental revenues. Facebook has also said it will consider lowering the renewal fee in the future, which might lower the number further.

The verification program definitely not going to be a money loser – Facebook could charge less for verification and still break even, but they chose the price point they did. But at the end of the day, Facebook’s root goal for the verification program is to increase user trust in applications so that dubious apps don’t screw up the ecosystem for everyone else. If Facebook wanted to make more money from app developers wanting more distribution, there are many other simpler ways they could do that.

Oops – Facebook Loses Email Notification Settings for Some Users

While Facebook has experienced explosive growth over the past year, stories of technical issues resulting in lost user data have been rare. Facebook’s engineering team has done a great job building scalable and reliable systems on the whole.

However, some users have received updates from Facebook this week that their email notification settings have been lost. Some users whose settings were lost, like Rob Spectre, report that now all their email notifications are by default are turned on. Other users who’ve seen the problem have told us that all their email notifications are by default turned off.

Either way, resetting the 50 or so Facebook email notification preferences – plus dozens more for applications – could take a while for most users to fix.

How Facebook Helped Me Get Elected to the Maine House of Representatives

This is a guest post by Maine State House Representative-Elect Sean Flaherty. Flaherty is a 23 year-old Democrat from Scarborough, Maine who defeated a “well known and highly respected” incumbent by a vote margin of 56%-44% ” in a town where Republicans outnumber Democrats by more than 6%.” Flaherty says that “Although the history isn’t complete, I am believed to be the first Democrat to represent District 127 in the Maine State House.”

Flaherty credits Facebook and the internet as key tools in his campaign strategy. He shares his Facebook tactics and strategies below.

I didn’t know it at the time, but my speech nominating Sen. Barack Obama for President at my town’s Democratic Caucus inevitably changed my life in so many ways. Although I was living and working in Washington, DC, I had kept my voter registration for five years at my home in Scarborough, ME. When it came time to vote in the Primaries, I didn’t want to simply vote absentee at the caucus, I wanted to be there. And after offering myself to the Obama for Maine campaign, I was asked to give the speech on behalf of Senator Obama.

The next morning I sat on the plane back to Washington, DC. It was about 6:30am, the flight was to land before 8:00am, and I was hoping to be back at my desk by 10:00am. Somewhere between ordering my orange juice and having to return my tray table to the upright and locked position I thought about something that was announced at the caucus. “We still don’t have a candidate for House District 127.” At the time I thought nothing of it, but now as I sat on the plane, I kept thinking that it was a seat a Democrat can win. Hell, that’s a seat I can win.

A few days later, I decided I’d do it. I gave my notice at my job, took three different weekend trips to Maine and back to DC to get signatures, donations, and organize, and within 6 weeks officially moved back to my home town.

What was my first move of the campaign? Creating a Facebook group – Sean Flaherty For Scarborough.

I invited all of my friends, the ones from my home town, the ones from DC, and even the random people who I barely knew. The whole point was to spread the word and make it look like I had huge support before I even moved back into the district.

The group we created had a casual picture of me to start – not the typical suit and tie. The group talked about the fact that I was young and wanted to get involved for other young people – didn’t go on about policy and legislation. I enabled the wall for people to say things, feel engaged, and know that they could have an impact – instead of making it a static place for simply me to post.

After inviting friends, I wanted to help promote the sight to people I may not be Facebook friends with, but whom I knew. We “posted” the group to my profile, we wrote on the wall so it showed up in facebook feeds. In fact, I believe that many people were driven to the sight by seeing something about the group, or me, pop up in facebook news feeds. So activity, not advertising was big in growing the group.

That was the start – Facebook. It was essential for my campaign despite the fact that very few young voters lived in my district. In fact, less than 7% of voters in my district are under 25, and only 10% are between 25-34 years old! So how did Facebook help a 23 year old candidate in a district that was more than 80% age 35 and older?

Parents.

I ended up hearing in the final days of the campaign, as I went door-to-door, “ Oh yes, my daughter called me and told me to vote for you.” In the early days, reaching out to people on Facebook helped to create a buzz, kids end up talking to their parents and it comes up in conversation, and then Viral Marketing takes effect. Parents talk to other parents at the grocery store, at book clubs, at soccer games, you name it. Facebook was an easy and early tool used to spread the word and create a buzz.

Although much of the word-of-mouth part of the campaign from young voters to their parents was not solicited (by that I mean people talked about the race with their parents without me asking them too) we did use the strategy down the stretch as a GOTV tool. Here is an example of a message sent to group members of the Sean Flaherty for Scarborough Facebook group:

“That means that I need your help to reach out to your parents, your friends, your parents neighbors, whoever in Scarborough.

Send your friends an e-mail.

Give you parents a call!

Encourage them to vote Tuesday for our campaign.”

But where Facebook may have been the most effective was with my early/absentee voting strategy.

We used Facebook to distribute information about campaign news and events, but more importantly, to remind people to sign up to vote early, or if they were away, vote absentee. About once a week during the final 6 weeks, we sent a message. Each one concluded with, “Remember to sign up for your absentee ballot, call now…” I truly believe this was instrumental in helping to reminded college kids and recent grads like myself, to get their ballot early.

Here is an example of who we pounded the “Vote Early” message home:

    Subject: Two Ways To Make Sure Your Vote Counts:

    1.) ABSENTEE BALLOT
    It’s not too late to get your Absentee Ballot, but we are getting close.
    Call Scarborough Town Hall TODAY at 730-4020 to have them send you a ballot.
    It takes a few days to mail, and a few days to get back, so you need to make sure you vote by next week to make sure they get your ballot in time.

    2.) EARLY VOTING AT TOWN HALL
    If you are local, you can Vote Early at Town Hall during normal business hours to avoid the lines on election day, and even if you’re not registered yet, you can go up, register and vote all at the same time.

    Above all, make sure you vote!!
    Call 730-4020 to make sure you get sent your absentee ballot before it’s too late!

Facebook was also key in reaching out to the absentee voters who I didn’t know. Each week, the town clerks in Maine would forward to the State Parties complete lists of people who had applied for an Absentee Ballot. The State Party said to call all these folks or send them a brochure. And I did just that. But the first thing that I did was highlight every single voter who was between the ages of 18 and 29. Then, I went onto Facebook, searched for their name, and sent them a message.

The text of the message was simple:

    “My name is Sean Flaherty, I’m a Scarborough High School graduate of the class of 2003, and am now a candidate for the Maine State Legislature.I’m reaching out to Scarborough voters any way I can – going door to door, making phone calls, and yes, even using Facebook – to let voters know about the issues that are important to me.

    I believe Augusta needs more young people to get involved and stand up for issues important to our generation. That’s why in April, I decided to run to represent Scarborough.”

For those voters I knew, I added a personal message. For those I didn’t, I invited them to check out my website and contact me. Several voters were people from High School I never knew, but were excited about my campaign. They, in turn, helped to spread the word, talk to their parents and friends, joined the Facebook group, and best of all, voted for me!

This was a key and easy way to reach young voters who responded simply to another young person, the fact that I was using Facebook, and my urging them to contact me to let me know their issues was important. Some folks added me as a friend, some even did ask me specific questions.

Lastly, Facebook helped to keep me connected to my strong supporters who lived outside of Maine. I have so many great friends from my years at GWU and in Washington, DC. I used Facebook to send them updates and solicit help with making phone calls. My friends from away ended up making hundreds of calls to voters in my district on my behalf, and all it took to get them to help was a Facebook Message to the Flaherty For Scarborough group asking for folks to make 20 calls or so.

I’d usually throw in the appeal to make phone calls in the PS, as to not distract from the need for people from Scarborough to take action easily with their own parents and friends:

    “PS: Even if you are not from Scarborough, but would like to help with one final push – send me a message and I’ll send you a list of just 5 people to call. It will take 15 minutes and could be the difference.”

After the election, a Town Council candidate, who did not win his seat, e-mailed me on Facebook and asked me what I did to help my campaign with Facebook. It was clear that he also knew, from his own kids, how successful I had been and knew of my ability to utilize the often underutilized tool of Social Networking.

Facebook wasn’t the only reason I got elected. I knocked on thousands of doors, spent hours and hours with a phone stuck to my ear, and had over $5,000 worth of direct mail spent for the campaign. But, Facebook was a big part of helping to spread the message, mobilize the youth vote, and get help for traditional campaign tactics like phone banking. I would recommend to every candidate, young and old, to utilize Facebook as an additional tool in helping to earn an election night victory.

Learn more about Rep.-Elect Flaherty at his website www.SeanFlaherty.org or on Facebook by searching for “Sean Flaherty For Scarborough.”

Viral Channels: New Features for Application Emails

App developers know that Facebook’s restrictions on application emails have made the use of email as an effective communication channel much more challenging. Tonight, there is good news: Facebook is announcing several new features for developers to employ in their application emails.

Here’s a quick summary:

  1. Many new formatting tags are available for the first time. For a complete list of which HTML tags developers can use in their emails, see the Developer Wiki page.
  2. Demographic restrictions are now available in email through FBML
  3. Personalization is now available in subject lines through FBML (“Justin, your latest updates…”)
  4. Internationalization tags are also available through FBML for those who have translated their apps
  5. Daily email limits are gone for users who explicitly granted email permission to your application. The allocation limits still apply to all users who added the app before the redesign.

While there are still some restrictions in place, these new features will certainly allow developers to send richer, more engaging application emails, which should benefit everyone in the ecosystem.

Brand Watch: Lexus Sponsors iCue Application

Yesterday, NBC News launched a new application called What’s Your iCue?, which creates trivia games around content in the NBC News archives. Today, Appssavvy, NBC’s sales partner for the iCue application, is sharing news that it has signed up Lexus as lead iCue sponsor.

Right now, it looks like the sponsorship essentially consists of deeper visual integration on several pages within iCue. While it’s a pretty basic integration, it’s nice to see a brand like Lexus taking a step into the Facebook application world. Check out the screenshot below.

Notes from Facebook Developer Garage SF

About 250 people attended the Facebook Developer Garage San Francisco this afternoon/evening, hosted by Offerpal. The event was held at Mezzanine, which is a great venue. A couple quick notes from the evening:

  • Siqi Chen, CEO of Serious Business: “Friends For Sale has 3 kinds of users: 1) guys with a lot of time, 2) guys with a lot of money, 3) hot people. Usually, groups 1 and 3 do not interact much – we allow them to do that… Interestingly, some of our highest paying users are in Saudi Arabia. One woman has spent over US $30,000 in the game so far. We get threatened and bribe attempts a lot.”
  • John Hwang, Director of Products, RockYou: “You should earn about $75 per day per thousand DAUs. For RockYou the going rate is in the $10-20 range.”
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