As part of Microsoft’s $240 million strategic investment in Facebook back in 2007, the two companies agreed to expand their existing advertising agreement: Microsoft would run banner ads on Facebook both in the US and in other countries around the world. While that agreement was set to extend to 2011, it has already ended as of January 1 of this year in at least some countries, including the United Kingdom.

Now, Facebook is running its own performance ad inventory  in certain countries outside of the US, as we’ve heard and as the company has confirmed to us. These self-serve ads let most any advertiser provide their own ad copy and target ads to a wide range of very specific demographics. The format also includes call-to-action items such as the ability for a user to like an ad and see who among their friends have already liked it. Advertisers pay for these ads either based on the number of impressions (CPM) or by the number of clicks (CPC) that the ad is projected to receive

Facebook has more than doubled its revenues in 2009 to well over $550 million, in a large part due to the increasing popularity of these ads.

The additional inventory — especially in big advertising markets like the UK — mean these ads are going to be even more attractive to people trying to reach Facebook users. The change is also good news for companies who use Facebook’s Ads application programming interface to sell ads in bulk to social game developers and other large advertisers.

More supply equals lower prices, at least for now. ”Lower CPCs mean a 25% improvement in performance,” Simon Mansell, the managing director TBG London tells us. “More supply means a 25% improvement in volume available.” His company uses the Ads API in a bulk-ad sale tool called the ONE Media Manager; it provided the graph, above, of Facebook CPC rates before and after the Microsoft switch. TBG and other advertisers were given advance notice about the switch, and had prepared additional inventory to be ready for the first day of the new year.

But as with all market prices, a good deal will not last forever. “I suspect CPC levels to rise again over the next few months as demand increases due to better performance,” as Mansell relates, “but for the next 3 months I expect large clients/app developers etc will be very happy.”

While third parties might be enjoying the changes, Facebook surely is, too. “People at Facebook hated running the MSN banners,” a source who asked not to be named tells us. “They thought they were bad for user experience and didn’t make as much money for them as their normal ads, which are starting to do very well.”

Microsoft likely has mixed feelings about the changes. While it is losing some inventory, the fact that the company owns significant stock in Facebook means that it will eventually benefit from Facebook improving its user experience and bottom line.

Microsoft’s ads also stopped showing up in the US as of January 1, but that was due to a glitch, Facebook has previously said. Those banners should be returning shortly — although for how long?

Thanks Sam Goldfarb of Tradimax for the tip.

New applications from around the globe and a non-Zynga attempt at a Farmville gifting app brings in players on this week’s top 20 emerging list for the week ending January 7. The emerging list is a way to spot rapid growth in titles that ended the week with below 1 million monthly active users.

2010′s first app to go from zero to first on the top 20 emerging list is FarmVille Gift Sender. According to AppData, the Farmville “add-on” (it’s a separate app) shot from nothing to reach more than half a million people in its first week. This isn’t surprising considering Farmville‘s 30 million plus daily active users who presumably make up most of the app’s audience. It wouldn’t be surprising to see Zynga get this app shut down shortly due to its intellectual property issues.

	Name	MAU	Gain	Gain, %
1.	FarmVille Gift Sender	504,499	+455,155	+90.22
2.	Garden World	438,570	+433,115	+98.76
3.	Three Kingdoms Online – Best Browser Game of 2009!	460,090	+202,415	+43.99
4.	Will you be my valentine?	394,672	+187,112	+47.41
5.	My Town	320,996	+176,592	+55.01
6.	Yılbaşı Kartları	259,136	+163,923	+63.26
7.	zelim ti..	262,980	+143,178	+54.44
8.	Who Has The Best Profile Picture ?	192,030	+130,451	+67.93
9.	Travel Balloon	889,498	+127,313	+14.31
10.	Bite Me	510,929	+124,920	+24.45
11.	快打之王	728,072	+122,745	+16.86
12.	Poll Daddy Polls	274,976	+120,725	+43.90
13.	New Year Wish!	228,531	+117,014	+51.20
14.	Chinese New Year Gift – 新春禮物	128,234	+104,393	+81.41
15.	歡樂癲地 Funland	587,289	+94,413	+16.08
16.	Warstorm	313,678	+92,698	+29.55
17.	I Love Chocolate	449,577	+92,119	+20.49
18.	Happy New Year!	107,286	+89,707	+83.61
19.	傾城 Online	166,927	+89,381	+53.54
20.	Birthday Greeting Cards	597,641	+87,121	+14.58

Garden World is Tall Tree Game’s flower-growing app, and a game that has been live since last year. This week sees a restart for the app with the ability to see neighbors/friends gardens adding to a new overall total. That addition has boosted the app to have the highest gaining percentage of any app on the list with 99 percent this week, or 433,000 new players.

Users must have been inspired by the confident name, because Three Kingdoms Online – Best Browser Game of 2009! is in the top five two weeks in a row. The app moves up one spot to third and has a MAU of 460,000 players.

Perhaps speaking too soon about seasonal apps, Will you be my valentine? makes a strong showing with 47 percent an MAU of 395,000 and over a month to gain users before Valentine’s Day on February 14th. The app is benefiting from a strong showing last year and it will be interesting to see if any new titles are released this month to capitalize on the season the same way developers did for Christmas.

Foreign language apps appear to be coming in to their own with regular appearances on all top 20 gaining lists. Six foreign language apps make up this weeks top 20. Four are Chinese-language apps: 快打之王, Chinese New Year Gift – 新春禮物,  歡樂癲地 Funland and 傾城 Online.

Chinese New Year Gift – 新春禮物 gained the most users from last week, making its first appearance on the list at 14 with 128,000 MAU and rising 81 percent this week. Meanwhile 快打之王 (“King of Kombat”) fell the most spots this week of any app, eight spots from last week where it ranked third overall.

Yılbaşı Kartları (“Christmas Cards”) is in its second week on the list and is the first Turkish app on a top 20 list. Turkey typically trades gifts around New Years which explains the Christmas theme, but its still a large number for any Turkish app.

zelim ti.. (“I want you ..”) is another small language app making its first appearance on the list. The app received a 54 percent increase for a seventh place spot on the list, its first appearance on the emerging list and probably the first Serbian language app on a top 20 as well.

Travel Balloon has the highest MAU this week and should break through the emerging lists restrictions once again to top 1 million MAU next week as long as its growth stay consistent. It will be joining last weeks title Ma Fiche which broke 1 million users this week.

Vitaminwater has selected a new flavor after soliciting fan information through Facebook, with the latest offering from the Coke beverage company appropriately called “Connect.” The new Black Cherry and Lime flavor was voted on and inspired by Facebook users. One grand prize winner responsible for the creation of the Vitamin Water Connect label design and several finalists were also named.

Vitaminwater is an extremely popular brand on Facebook, with about 1.1 million fans of its very interactive and often-updated page. The brand launched a flavor creator game in the fall of ’09, and fans flocked to the page to take a crack at concocting the next new flavor, partially driven by extensive online and television advertising. The application was unique in that it not only used the opinions of Facebook fans, but reached out across several other sites to bring in already popular flavor combinations to inspire the new vitaminwater flavor.

The winning label announcement also hints at an early sampling of the new flavor for vitaminwater Facebook fans. It doesn’t specify if this will be a sampling distributed through Facebook like some of the campaigns we’ve seen from Splenda, Texas Pete and others, or if it will be a tasting in stores or other venues that will be revealed on the Facebook page.

Fans of the CW network Facebook page will be able to catch an exclusive preview of the new series “Life Unexpected” on Jan. 11, a week before the series premiere is set to air. According to a post at Broadcasting & Cable, the 10-minute preview will stream through the CW fan page, and is only available to fans of the network.

CW’s Facebook page has around 70,000 fans, and there doesn’t appear to be any information on the page about the upcoming preview. There is already some buzz surrounding “Life Unexpected,” however, as the pilot episode was well received by critics and fans. A few discussions and wall posts are present across the page as fans get ready for the launch of the series. Broadcasting & Cable states that the CW will also be cross-promoting the preview on their Web site, and the network is currently pushing the new program pretty hard through video clips and the show’s own landing page.

Networks are starting to turning to Facebook for exclusive content and early looks at their on-air programs. The most notable instance was NBC running the entire first episode of the new comedy “Community” before the show was aired on the network. Other networks are taking advantage of the interactivity of Facebook for their programs, such as TNT’s use of Connect to allow fans to make comments during last year’s NBA All-Star Game. The CW is also planning to allow fans to post comments around the airing of “Life Unexpected” for the first 24 hours following the preview.

In case you haven’t heard, Facebook is removing the notifications channel soon (among many other Platform changes), meaning developers will have to adjust their tactics for retaining users in their apps and games. While the specific date hasn’t been announced, we do expect it to happen in the next few weeks.

Recently, however, some developers have taken a new step in boosting the number of users bookmarking their applications: inserting the FBML “Add Bookmark” button into the notifications themselves. As you can see to the right, Playfish has apparently been blasting out a lot of these notifications this morning. While developers have been trying to convert users to other retention channels like bookmarks and email in recent months, more developers will be doing things like this in the weeks ahead until notifications meet their end.

Update: It appears Facebook has now disabled this, according to this Developers Forum thread.

Traffic Marketplace is another big advertising network getting into the offers business. It’s doing so in hopes of using its relationships with brands, agencies, and other advertisers, along with its targeting technology, to try to make developers more money — and to broaden its core business.

Today, in terms of social networks, TMP both provides ads from its network to other offer companies and sells ads within its own social ad network and offers services. Right now, it is focusing on providing a new feature: an offer window that can be added within applications. The window provides a few offers in the usual offer-wall style, but also includes display ads. It is already live on “a couple dozen apps,” the company claims, and is currently reaching around 40 million monthly active users. While TMP isn’t providing names of clients at this point, it also plans to launch the window with a dozen developers within the month, some of whom are quite well-known, according to Sheldon Owen, the company’s general manager of TMPSocial and performance advertising.

> Continue reading on Inside Social Games.

Although Twitter has until now owned real-time search results for news events, a minor (4.1) earthquake that hit Palo Alto and other parts of Silicon Valley today shows Facebook’s real-time search can also give you an interesting look at breaking news.

Just log in to Facebook and search for “earthquake” or “palo alto earthquake” or other terms. On the search results page, click on the “Posts by Everyone” option at the bottom of the left-hand navigation menu and you’ll see results from anyone on Facebook who has made their status updates publicly available. The volume of results on the page appears to be higher than before. This is probably due to Facebook’s new privacy interface, introduced last month, that encouraged more people to make their status updates public.

However, Twitter search still has the most useful features for tracking real-time news, like being able to save a search and subscribe via RSS to results. And the fact that most Twitter users default all of their tweets to be public probably means that the overall volume is higher. In our search on both services for “palo alto earthquake,” for example, you can see Facebooks’ results updating in real-time, while Twitter’s web site results appear as a counter that you need to click on in order to view. We can also see dozens of tweets in the time that we see only a few Facebook updates.

Facebook’s search, meanwhile, benefits from the many apps that let you import your tweets. That advantage is going to be two-way, shortly, as Facebook is also planning to let you publish your status updates to Twitter.

Also, the fact that you can sort Facebook search results by just your friends gives you more meaningful social context. In this case, you can quickly see which of your Facebook friends felt the Bay Area quake — generally, being able to sort by friends is a powerful feature for keeping track of loved ones affected by disasters, and it’s not something that Twitter offers. But there are other goods ways to get a focused view of tweets: one is seeing what people are saying on Twitter lists or third-party lists generated on services such as Tweetdeck and Seesmic; another is through location-based results on Google Maps or  other services.

In comparing the real-time results from the two sites in this case, there’s not a huge amount to conclude, other than that Facebook shows you more than it used to. Twitter is surely going to continue improving its search results — doing things like showing new results cascading down the page in real-time rather than showing them as a counter. Facebook, meanwhile, will probably continue to improve functionality, like being able to save searches.

Although Facebook has been talking about building a payments service for years, the project has only slowly rolled out.

One big part of payments, its Credits virtual currency, launched more than a year ago and the company began testing it with third party applications starting last May.

But now, things are picking up. Most recently, a posting on Facebook’s job listings for the position of “Strategist, Payment Operations” describes the company creating a new payments team:

Facebook Payment Operations is a brand-new team that ensures, monitors, and reports on all money moving into Facebook. As a founding member, individuals have an opportunity to shape this team’s culture, role within the company, and day-to-day operations. As part of the Online Operations organization, we work cross-functionally with the Product and Engineering teams to design tools and systems to serve our hundreds of millions of users and our ever-growing base of advertisers. Projects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook’s business, as well as enable the company to scale and expand its operations in the coming years. Successful candidates for this job are self-motivated, flexible to constant changes and are problem-solvers who think creatively and propose solutions.

This team appears to be an expansion of the “Billing, Payments and Fraud team” that Facebook is separately hiring for.

Why is the company only now creating a specialized team to handle payments? Because it is clearly a revenue growth area. Estimates from several months ago suggest that Facebook’s gift store brought in at least $75 million last year, although the company does not disclose revenue breakdowns.

One reason for the new team could be that the company simply wants to expand payment options for advertisers, especially internationally. For example, when it expanded payment options to 14 currencies last June, this applied to both advertisers and credits-purchasing users. Facebook’s performance ad business has done well over the last year, and new payment options could enable it to grow even faster.

Meanwhile, Facebook has also been planning the expansion of Credits on its developer platform. It has been busy talking to big developers about implementing Credits as a payment option in their games. Already, CrowdStar’s new Happy Island game launched last month with Credits as its exclusive method of payment for virtual goods.

Some rumors have also suggested that Facebook will force all third-party developers to adopt Credits. We don’t know exactly how Credits will be introduced on Facebook’s platform — the company may use other tactics for favoring the currency, like promoting “Credits-enabled” apps in its application directory. This exact feature appeared in test screenshots (above) that surfaced last fall.

We are more certain of something else, which is that developers can expect to pay a transaction fee to Facebook of around 30%, similar to the cut Apple takes from developers who build apps for its iTunes App Store. This is probably one reason why the above posting says “[p]rojects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook’s business….”

So we’ll see what happens. Here’s more about the job, from the posting:

• Respond to contacts from users and advertisers regarding a variety of payment or billing issues
• Gather and synthesize relevant data, suggesting improvements in the tools and techniques to help scale the team
• Collaborate with engineering and product teams to drive projects to completion
• Prototype and test new tools with engineering teams
• Respond/represent chargebacks related to user and advertiser charges
• Assist broader Online Operations team in optimizing Facebook’s revenue channels
• Mentor junior teammates in daily roles and continuing professional growth

[Images via Jesse Stay.]

Context Optional’s latest app, Stop Me from Spending!, launched yesterday, is designed to help users gain a better understanding of the economy with tips while helping them set financial goals and avoid spending “temptations.”

The app was created by San Francisco-based Context Optional in collaboration with Youth Radio (Youth Media International) as part of a public media initiative backed by the Corporation for Public Broadcasting meant to educate people about the economy.

Stop Me from Spending! includes links to financial stories from Youth Radio — from information about investing to student loans to savings — and also a variety of other resources pointed to helping users understand the economy.

A user of the app has three different tools at their disposal: the Temptation Converter, the Goal Tracker and Tips on being financially savvy.

The Temptation Converter is an interesting tool because it transforms a desire to spend into a visual element, which is then posted to your wall, so that your Facebook friends can make comments, potentially helping you avoid unnecessary spending.

After typing in what you want, how much it costs, what category it falls under (entertainment, for example) and uploading a picture, the app allows you to post the result to your profile or the profiles of your Facebook friends.

Goal Tracker is another tool the app offers, visually assisting the user plan and attain financial goals. The user enters a financial goal, such as building up your savings, then they users lists the stops needed to achieve this goal, such as put money away each week or not eating at restaurants so often.

The resulting visual diagram allows the user to see their financial goals in a diagram format which evolves visually as you begin to complete steps towards your financial goals.

Finally, an entire section of Stop Me from Spending! is dedicated to educating the user on a variety of financial issues with radio stories from Youth Radio, financial games and various educational financial information.

Facebook has made a quiet update to its popular iPhone application today. For any device owner trying to get the most out of the service, it is worth downloading.

One part of the update is the option to receive push notifications — pop-up windows or sounds — when people do any of the following: send you messages, post to your wall, request or confirm your friendship, tag you in a photo, invite you to events or otherwise comment on anything related to you. The web interface already lets you decide whether or not to receive email updates for each of these features, as well as others; the push interface basically mimics those options.

The other part of the update is the ability to sync the profile photo and URL of your Facebook friends with your iPhone contact list. The app appears to match the names of Facebook friends with the names of your iPhone contacts. The URL for each friends’ profile appears as a link within their address book entry that, when clicked on, opens their Facebook profile within the Facebook iPhone app. This is an easy way to get information about your friends’ latest activities before calling them. Within the sync interface, Facebook also interestingly asks users to “make sure your friends are comfortable with any use you make of their information” even though the Facebook terms of service and privacy policies already provide for this sort of usage.

However, at this time there’s no way to export your Facebook friends’ phone numbers or email addresses to your iPhone contacts. But, as before, the Facebook app friend list shows you people who have provided their phone numbers, and clicking through will let you call those numbers using your phone.

Notably, some third-party iPhone apps, like PhoneBook, have already let you pair your Facebook friend’s photos with their entries in the iPhone address book. From what we’ve seen, the Facebook app replaces the photos and other data from those apps with its own.

And, judging from user comments in the iTunes App Store, iPod Touch users have not been able to access the new version of the app. It’s not clear if that’s a bug or what. The number of touch Facebook users appeared to grow considerably over the holidays as third-party studies indicated people received the device for Christmas then went and downloaded the Facebook app to use over their WiFi connections. On our end, we saw the app grow significantly, starting on Christmas and continuing up until now.

It now has 23.5 million monthly active users, nearly half of whom use it every day, making the app one of the most heavily used on Facebook’s platform. Today’s update is its biggest since the 3.0 version release earlier this summer; the last release included the additions of versions in Chinese and Japanese. Still to come, according to the app’s previous roadmap, is the addition of site-wide searches that you can save.