Zynga 2008 Revenues Rumored at $40-$50 Million

While game development on social networks is increasingly becoming more sophisticated, leading social game developer Zynga is already figuring out how to drive significant revenues out of its game network.

Long rumored in the app developer community as the developer of one of the “million dollar a month” apps in its Texas HoldEm poker game (mostly from people buying virtual currency), Norwest Venture Partners principal Tim Chang told paidContent today that Zynga is making “$30 to $40 million per year.” In addition, Nicholas Carlson at SAI reported today that his sources say Zynga turned in 2008 revenues of $50 million.

Read more at Inside Social Games…

Crispin Porter and Refresh Partners Launch Whopper Sacrifice App for Burger King

“Ten of your friends were just sacrificed for a Whopper” has been making the rounds through Facebook’s News Feed today. Why?

A new application from Crispin Porter + Bogusky and Toronto-based Refresh Partners called Whopper Sacrifice offers Facebook users the chance to “sacrifice” 10 of their Facebook friends in exchange for a free Whopper coupon. The promotion, which just launched yesterday, has caught on and spread rapidly to tens of thousands of Facebook users throughout the day today.

Crispin Porter and Refresh have made clever use off CSS hacks and iframes to create a “fun” experience around deleting Facebook friends. It’s the first app we’ve seen that makes prominent use of friend removals.

whoppersac

And while normal friend removals happen without a notification being sent to the deleted friend, the Whopper Sacrifice sends deleted friends a note letting them know they’ve “been sacrificed for a Whopper” before they are indeed actually removed from users’ Facebook friend list. (Removed friends are still able to re-initiate friend requests after being removed though.)

The Burger King app is a great example of a simple concept applied to the social graph in a branded way. It may not last forever, but it’s a lot more engaging and meaningful than a banner ad.

December Data is In: Facebook Surpasses MySpace in US Uniques

The December numbers are in on Facebook from Internet metrics firms Compete and Hitwise, and here’s the latest:

1. Facebook Surpasses MySpace in US Uniques for the First Time Ever in December

According to new data from Compete, Facebook’s active US audience grew by over 20% in December from nearly 50 million to almost 60 million, surpassing MySpace in US uniques for the first time ever. MySpace uniques were also up 5% in December, but are still down 10% from where they were a year ago. By contrast, Facebook’s US uniques increased by 85% during 2008 from just over 32 million at the end of 2007.

compete2008dec

2. Facebook Now Accounts for 4% of All Online Minutes Spent in the US

The following graph shows the portion of all US online minutes Facebook accounted for in the US throughout the US in 2008. Facebook started the year at about 1% of daily US minutes, and ended the year at 4% of daily US minutes. By contrast, MySpace started 2008 at 7% of daily US minutes, and ended the year at 2% – a 71% decline, according to Compete.

competeatt2008dec

3. Hitwise Says MySpace Still Holds Lead in Total Visits

Despite Compete’s claim that Facebook has surpassed MySpace in unique US visitors and vists in December, Hitwise says MySpace still holds a commanding lead over Facebook in terms of visits.

We’ll dig deeper to see what might account for the differences between the Compete and Hitwise US visit numbers.

hitwise2008dec

Source: Hitwise

Microsoft, Facebook Announce News Feed Syndication in Windows Live

keynoteballmerYesterday at CES, Microsoft CEO Steve Ballmer announced an expanded Facebook integration with its Windows Live service in which Facebook news feed stories will now also appear in the Windows Live update stream. Windows Live has integrated updates from over 50 third party sites for months, but Facebook has not syndicated its news feed stories to Live until now.

The move marks a second step in Microsoft’s integration of Facebook into Windows Live. Last November, Microsoft and Facebook created a contact importer allowing Windows Live users to import their Facebook contacts directly into Windows Live.

The integrations reflect the deepening partnership between the two companies following Microsoft’s $240 million investment in Facebook and the formation of a deep advertising sales relationship over a year ago. This depth of integration in the Windows Live update stream is a new test for Facebook, which historically has made its News Feed only accessible within its own properties.

“As with products like Facebook Connect, we’re focused on helping people share their lives online with friends, no matter what services they use.  Since Microsoft is a strong and trusted partner, this is a good opportunity to test this type of integration,” a Facebook spokesperson told Inside Facebook today.

According to Facebook, only the following types of feed stories will be syndicated to Windows Live:

  • photos
  • videos
  • status updates
  • profile updates
  • notes
  • pages users are a fan of

Looking Ahead

Where else will the Facebook-Microsoft partnership go in 2009?

Many have speculated that Facebook’s partnership with Microsoft will lead to innovations in social search and search and display advertising. For example, Lookery CEO Scott Rafer speculated last year that, “FB Connect code is going to collect every search referrer URL from every Connect partner site and use it to target M$ Live Search and other ads any number of places.”

However, others like David Kirkpatrick have speculated that Microsoft wants Facebook to be “a big participant in its move toward social networking in the enterprise” given that a large portion of Microsoft’s business today is still derived from business sales and enterprise services.

We’ll keep you updated on the latest as the Microsoft-Facebook partnership evolves in the months ahead.

Industry Perspectives: Q&A with Joe Marchese, President of SocialVibe

marcheseAs more brands explore new approaches to word of mouth marketing in social media, new social marketing services are emerging to help brands connect inside and across social platforms. One such service, SocialVibe, is helping connect people with brands they want to endorse in their social environments. We spoke with SocialVibe President Joe Marchese to learn more about the company and the trends he sees for branded Facebook applications and sponsored Facebook application integrations in 2009.

Can you give us a little background on SocialVibe?

SocialVibe is the result of realizing some time ago there had to be a new way to do advertising if it is going to work on social networks and other social media. “The consumer is in control” has been the catch phrase socialvibefor the 2000’s, but it didn’t seem like anyone was doing anything about it. SocialVibe aimed to change this by building something that was made to benefit brands, consumers and social networks at the same time. We figured if something could make advertising a good thing, or even a fun thing, and put the people in control for real, everyone would be happy with the result. And while SocialVibe keeps evolving, what doesn’t change is that people get the choice and benefit when they interact with SocialVibe.com or a SocialVibe application.

What kinds of campaigns are you doing on Facebook now, and what kinds of partners are you working with?

I know a lot of people have seen the Kraft campaign recently, but any brand sponsorship on SocialVibe.com can be applied to Facebook. SocialVibe simply gives people the choice of what brands they want to “get sponsored” by, and what charity they want to benefit. We want to let people bring their “sponsor” to any place they might publish content. We simply connect brands and people and let them interact. People have something of value for brands, and brands have value to offer to people, SocialVibe just helps the two parties exchange what each has to offer.

How do you see your work on Facebook evolving over 2009?

The current SocialVibe experience isn’t really optimized for Facebook. SocialVibe works with a number of social platforms where displaying your “brand badge” on your social profile is the best way to show your support for a brand. Over 2009 we want to work a lot more with Facebook’s tools to allow people to support brands and cause through their social graph in a more active, rather than just a passive manner. But this will only work if we add value to people’s social interaction.

It seems simple: Q – What makes advertising relevant in social networks? A – Making the advertising social. Q – What makes advertising social? A – Advertising is social when it prompts or facilitates communication. Spamming people with apps isn’t value add for brands, people or the network, so it is not a business model. In 2009 there will be a shakeout as marketers and developers will have to ask if they are delivering value to people and their networks. It is really important to us at SocialVibe that we are always on the right side of that discussion and while we think we have done well, we know that we can do better.

There has been a lot of discussion lately on the pros and cons of building branded Facebook applications compared to integrated sponsorships of or partnerships with existing popular applications. How do you compare these tactical options?

I think both have up side as well as some major flaws. Building brands into apps from the beginning provides a more seamless experience for users, but too often those apps are developed with the thinking that the app will be so cool, or so useful, people will “accidently” share the brand. People are not stupid, they know that they are helping a brand be sharing an app so it’s always better to be up front.

On the other hand, adding brands to popular apps at least guarantees the usefulness of the app, but people liked the app the way it was, so you have to be very careful that you are not pulling a “bait-and-switch” on people. Making money in the short-run is not worth burning the user.

How do you see that discussion evolving over 2009?

I think that the two strategies will both continue. Both strategies can work. I think that adding brands to successful applications might be more successful in the early part of the year given that a lot of brands and marketing agencies are re-tooling and just learning what can make a useful app. But I think branded apps come on strong in the second half of the year as you get the full creative and monetary resources of agencies and marketers behind the goal of developing applications with the user benefit in mind.

The application you delivered to Kraft and Crayon has been well received by the ad community. Why do you think it worked well?

I think that we were very upfront about what the application was. People were sharing Kraft because Kraft was giving back. It was in essence a partnership between Kraft and a community of people. Crayon saw that something like this would be the RIGHT way to get Kraft involved in people’s conversations on Facebook. Finally, we can’t under stimate that over half a million people have come to socialvibe.com and asked us to let them know when there was a brand that fit with what they were looking for (in Kraft’s case, people willing to reach out to their social graphs to help feed people over the holidays). Without those people getting the campaign rolling, this takes a lot longer, and maybe never works. It is that SocialVibe is connected to people, not inventory, that makes campaigns like this get off on the right foot. We could do the same for most any effort, but the brands have to want to engage with, and deliver value to, the community.

At some point it won’t matter how good an application is, people will have a limit to how many apps they truly use. The question isn’t “will people add this application today?”, but rather “will this application be useful to people a month from now?”. If you can honestly answer yes to the second question, you are building something that makes people’s social networking experience better. What it comes down to is will the industry get this part right before people start ignoring all their app requests/notifications.

Thanks Joe. Any final thoughts?

I will steal my final thoughts from SocialVibe’s lead application developer and all around rock star, Aaron Stein. Aaron points out that if you think about the iPhone and Blackberry applications you use, most of the applications you are sent on Facebook you would be upset is someone sent you on your phone – you wouldn’t even think about adding most of them, nevertheless passing them to the contacts you have in your phone. But the applications that make your phone a more useful or fun tool take off. ‘

This same rule should, and will, apply to Facebook as well. Facebook is a communication platform, more like a phone then it is like a blog. Try holding Facebook applications to the iPhone application standard, because sometime soon people on Facebook or Facebook itself might just start holding applications to the standard on their own.

Facebook Growth Continuing, Surpasses 150 Million Monthly Active Users

Another 20 days, another 10 million Facebook users.

It’s only been a couple weeks since Facebook surpassed the 140 million user mark, but this morning, Facebook CEO Mark Zuckerberg announced that Facebook’s audience has now crossed the 150 million monthly active user mark. If Facebook were a country, it would now be the 8th most populous in the world.

150 million marks another major milestone in Facebook’s continued growth, which has been skyrocketing both in the US and abroad. At this rate, Inside Facebook expects Facebook could cross 200 million monthly active users as early as April, or in about 90 days.

In addition, Inside Facebook has prepared resources for businesses interested in learning more about how to reach and engage Facebook’s large and growing user base. Further details are available below:

Policy Update: Facebook Extends Demographic Restrictions Deadline for Developers Using Alcoholic Virtual Goods

Back in November, Facebook announced an update to its platform terms of service with respect to alcohol advertising that allowed developers to place ads for alcoholic beverages for the first time – as long as they used Facebook’s Demographic Restrictions functionality to prevent access to alcohol related ads by anyone under 21.

passadrinkAt the same time, Facebook announced that starting today, January 6, 2009, it would require that “all content related to alcoholic beverages — including unbranded, generic drink images — be available only under Demographic Restriction.” This meant that developers allowing users to do things like “sending a drink” or other kinds of alcoholic themed virtual goods would now need to use Demographic Restrictions as well.

However, this afternoon, Nick Gianos and Paul Jeffries of Facebook’s Platform operations team posted a note on the Developers Wiki announcing an extension of that deadline while Facebook refines how the Demographic Restrictions feature works.

On November 7th… we said that effective January 6th, 2009, other content related to alcoholic beverages — including unbranded, generic drink images — will also require Demographic Restrictions. We know that you’ve been working hard to accommodate this, and appreciate all your efforts. However, we’ve gotten feedback that the current technology makes it difficult to comply in some cases. Based on your input, we’re taking another look to see if we can improve how Demographic Restrictions work. In the meantime, we’re postponing enforcement of the additional restrictions that were scheduled to take effect on January 6th.

Gianos and Jeffries added that, “As a best practice we encourage you to use Demographic Restrictions in all cases, but we’ll hold off on the additional requirements until we’ve taken all your feedback into account and made a technology review”, but didn’t indicate when the new deadline may be. We’ll keep you updated as things move forward.

Facebook Connect Team Offers Tutorial on Sharing in the Feed

Facebook Connect not only allows webmasters to bring Facebook identity into their websites, but also allows website users to share content through Facebook’s feed system. As a result, one of the main benefits for content sites that integrate Facebook Connect is the distribution and traffic they can get when users share content through Facebook. Once a feed story is published through Facebook Connect, it shows up on that user’s Wall, and may show up in many of their friends’ News Feeds.

Below, Ronnie Cheng and Luke Shepard of Facebook’s Connect engineering team give a 10 minute walk through on how to integrate content sharing through Facebook’s feed system in your Facebook Connect implementation. For those that want to learn how the integration works more in depth, check it out:

Apple’s iPhoto ’09 Integrates Facebook Connect for Easier Photo Sharing

Among the many announcements at Macworld today, Apple announced that iPhoto ’09, part of the iLife ’09 suite, now includes integration with Facebook through Facebook Connect.

Overall, it’s a nice and simple integration with a few new features that make iPhoto ’09 much more usable in conjunction with Facebook:

  • Now, you can publish photos to Facebook with custom privacy settings on each of your photo albums.
  • In addition, you can sync friend tags in photos between Facebook and iPhoto.

For a full demo of iPhoto’s Facebook Connect integration, check out the video here:

iphoto09

Q&A with fbFund Winner Wildfire: New Brand Marketing Strategies on Facebook

wildfire1In a continuing Q&A series with the winners of fbFund’s $250k second round of funding, Inside Facebook recently talked with Victoria Ransom, creator of the WildFire application.

Victoria shed light on WildFire’s strategies for success and highlighted the rise of advertising on Facebook. See our recent coverage for more background on changes in brand marketing inside social applications on Facebook.

Below, Victoria discusses how WildFire grew its business and handled marketing campaigns for giants like Pepsi, Amazon, and RedBull.

Q:  What problem does Wildfire Promotion Builder solve and what inspired you to start this business?

A:  Wildfire Promotion Builder provides a turnkey solution for companies (both big and small) to easily create and distribute their own branded interactive promotions (e.g. sweepstakes, user-generated contests, coupons and giveaways), and to simultaneously publish them on their website and throughout the social web. Interactive promotions are one of the most effective ways for companies to engage social network users (according to Jupiter Research, companies that run contests have twice as many social network fans as those that don’t) yet the majority of companies that advertise sweepstakes and contests on Facebook drive users outside of Facebook to engage with their promotion and thus fail to take advantage of the true power of Facebook – the social features like friend invites, activity feeds and notifications that can spread the word about promotions and companies virally.

Currently, companies wishing to integrate a promotion with Facebook’s social features need to create their own custom Facebook application – something that is beyond the resources and expertise of most companies. Wildfire Promotion Builder solves this problem by enabling companies to create their own branded interactive promotions within a matter of minutes and at a cost that’s affordable for even the smallest businesses.

Our inspiration for Wildfire Promotion Builder came from our own need. Looking for a way to promote our adventure travel company, Access Travel Ltd, to social network users, we decided to give away a free trip on Facebook. But when we searched for a way to run a sweepstakes that tapped into Facebook’s viral features we found that no easy solution existed and that we would have to build our own sweepstakes application. When other companies expressed interest in using our application, we realized that an opportunity existed to help organizations run interactive promotions on social networks and Wildfire Promotion Builder was born.

wildfire2

Q: A lot of the fbFund entrepreneurs that we’ve been talking with have MBAs.  Do you think that the knowledge that you and your cofounder have gained from business school has been critical?

A:  The knowledge we gained from our MBAs has certainly helped us with the development of our business, particularly with regard to developing our business model, pricing, and go-to-market strategy. The credibility and contacts we gained from our MBAs have also been helpful. Nevertheless, I do not think that having an MBA is critical to building a successful app company.

Q: What do you think made your app successful in the fbFund competition?

A:  The variety of ideas and depth of talent represented by the 25 finalists was really impressive; we were honored to be among them. In the end, I think our app stood out because we’ve focused on developing tools that will help businesses connect with Facebook users in a way that’s entertaining and beneficial to users. Despite the fact that thousands of businesses have created Facebook pages, very few app developers have focused on building apps that can be useful to businesses. I think this, coupled with our strong team, proven business model and track of record of delivering results for our clients helped us to be successful.

Q: What methods did you employ to gain traction among Facebook users and to market your app?  Is this what you would recommend to the next generation of fbFund applicants?

A:  Marketing our app requires quite a different approach than that taken by most app developers because our main focus is to attract businesses rather than consumers. We’ve used a combination of partnerships, PR, and direct sales to reach out to businesses. So far, word of mouth is proving to be one of the most effective ways for us to get the word out.

Q: Finally, Inside Facebook has written recently about the growing number of international Facebook users as well as international Platform growth.  We’ve also seen comments on the developer forum asking about advertising and metrics in other countries.  What is Wildfire Promotion Builder doing to help brands engage with the international community on Facebook?

A:  A number of the promotions that have run via our apps have targeted non-US audiences (including the UK, France, Germany, Spain, Canada and New Zealand). To facilitate this, we enable companies to limit eligibility to their promotions according to geography. We’ve also translated our apps into French, Spanish and German and have more languages on the way.

Thanks Victoria, and good luck!

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