2009 will be remembered as the year that casual gaming stormed social platforms and changed the way millions of people socialized with friends online. With an up-to-$400 million acquisition of Playfish by Electronic Arts, hundreds of millions of dollars in venture investments, and some of the highest engagement numbers that online entertainment has ever seen, social games are now impacting businesses across the media landscape. It’s become clear that there are substantial opportunities for social game developers with virtual goods revenue models, but the market is still evolving rapidly.

Get the Annual Membership Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD* OR Buy Single Report: $995 $795 USD* * Pre-order discount ends January 25, 2010. All pre-ordered reports will be delivered on January 26, 2010.

That’s why I’m excited to announce today a new exclusive original research report with co-author Charles Hudson in our Inside Virtual Goods series that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2010. It will be released on Tuesday, January 26, but is available for discount pre-order now.

How big is the market, and where will social gaming go in 2010? How will existing players fare as Facebook shifts the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The Future of Social Gaming 2010 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2010 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2010 gives you an inside view of the future at this critical juncture in the intersection of social networking and online games.

We have compiled months of original research from dozens of top executives and entrepreneurs from all parts of the social gaming ecosystem to produce eye-opening source data and analysis that is not available anywhere else. At over 80 pages, Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of what’s shaping up to be a very fundamentally strong and profitable industry.

What We Cover

1. Emerging Social Game Development and Studio Models – There is an emerging consensus around how social game developers are choosing to organize themselves for game development. How do small, medium, and large developers organize their teams? What do development cycle times for original titles and “expansion packs” look like? What is the role of testing and metrics in the development process?
2. Social Game Design and Mechanics – The emergence of a few key game genres with proven mechanics and monetization have spawned dozens of fast followers. Understand how publishers are continuing to innovate as we head into 2010.
3. Monetization Data and Payment Trends – Now that developers have proven the virtual goods model, what are ARPUs really like for different game genres? What is the lifetime value of users, and how long do players stick around? We take an in depth look at monetization methods and rates, and shed light on where payments are headed in the coming quarters. One more note on monetization  – you may be wondering about everything you’ve heard about offers and alternative payments for virtual goods. We cover:
   • The offers ‘scandal’ and what will it mean going into 2010
   • Changes that advertisers and payments companies have – and haven’t – made
   • How both direct and alternate payment methods are most likely to grow or contract in the coming year.
4. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past two and a half years, so have the ways that developers acquire and retain new users. How have user acquisition costs changed, and what do Facebook’s changes spell for the future of the marketing funnel? We take an in depth look at data and trends.
5. Facebook’s Platform Changes, Credits, and What’s In Store for the Future – Just when social game developers were settling in, Facebook announced major adjustments that will dramatically alter the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? In addition, as Facebook rolls out its much-discussed Credits currency, how will monetization and the payments landscape be affected? Finally, will we see another dominant platform emerge? Our overview covers these developments, their impact on the industry, and what else is in store.

What you get

In addition to our deep dive into key aspects of the social gaming ecosystem, the report also offers extended coverage on:

• A brief history on the evolution and growth of this space in the US, including a description of all key players and how they rose to the top.
• Total social gaming market size estimates for 2010, including estimates on the “big three” developers.
• Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2010.

See the full table of contents below:

Table of Contents

Section I: Overview

1. The Evolution of Social Gaming

• What is Social Gaming?
• Why do Social Games Work?
• A Brief History of the Major Eras in Social Gaming
  • Era I – The Virality Era
  • Era II – The Emergence of Paid Distribution
  • Era III – Rise of the Big 3 and the Network Model

2. Social Game Development and Design Processes

• Studio Composition
  • Small Developers
  • Medium and Large Developers
• Platform Services
• Development Cycle Time
  • Expansion Packs
  • True Serial
• Developing Franchise Titles
• Role of Testing and Metrics
• Multi-platform Development

3. Social Game Design and Game Mechanics

• Emergence of Key Genres
• Fast Followers vs Innovators
• Templates / Engines
• Intellectual Property
• Barriers to Entry

4. Monetization

1. How do social games monetize?
   • Virtual Goods
     1. Functional Virtual Goods
     2. Decorative Virtual Goods
     3. Consumables
   • Advertising
     1. Sponsorships
     2. White Label Games
     3. Branded Virtual Goods
2. Monetization Rates
   • How do social game developers manage their businesses?
     1. Social RPGs
     2. Farm Games
     3. Pet Games
     4. Aquarium Games
     5. Poker Games
     6. Flirting Games
     7. Arcade Games
   • Monetization rates of key social game genres
   • How has monetization changed over the last year?
3. Consumer Demographics
4. Payments Breakdown
   • Understanding Offers and the Offer Controversy
     1. The Offer Controversy
     2. Offers in Social Games
     3. Increased Competition
   • Mobile and Alternative Direct Payments
     1. Large Payment Platforms
     2. Direct Payments vs Offers
     3. Direct Payments Breakdown in Social Games
   • Direct Payments
     1. Mobile Payments
     2. Pre-Paid Cards
     3. New Payment Providers
5. Lifetime Value of Social Game Players (LTV) – What do we know?
   • How long do players stick around?
   • When in their lifecycle do users monetize best?
   • Seasonality and monetization lifecycles in social games
   • Banner advertising’s role

5. Customer Acquisition and Marketing

• The Rise, Fall, and Re-rise of Viral Acquisition
• Cross Promotion
• Paid Acquisition
  • Facebook Ads
  • Third-party Facebook Platform Ad Networks
• Network Strategy and Economies of Scale

6. 2010 Market Size and Top Developers Revenue Estimates

• 2010 Social Gaming Market Size
• Top Developer Revenue Estimates
  • Zynga
  • Playfish
  • Playdom
  • Crowdstar

Section II: The Future

1. Facebook Platform Changes and the Relationship Between Facebook and Application Developers

• Impact of Platform Changes
• Developers and Advertising Spend

2. What does the emergence of the big 3 mean for small and medium sized developers?

• Marketing and Customer Acquisition
• The CrowdStar Example
• Can an independent developer dominate a category?

3. Facebook Credits, Offers, and the Changing Monetization Landscape

• Impact of Facebook Credits
• Offers and Performance Advertising
• Role of Alternative Payment Systems

4. Off-Network Games with Facebook Connect

• Intersection of Social and Mobile
• Open Internet – Farmville.com and Facebook Connect

5. Will Another Platform Other Than Facebook Emerge?

• MySpace
• Twitter
• Global Social Networks
• Global Portals
• Search Engine Application Platforms

6. Investment Landscape

• Venture Capital
• M&A and IPO Landscape

7. Competitive Response in the Broader Media and Games Industry

• Casual game developers
• Console Games Companies
• Casual MMOs and Virtual Worlds
• Diversified Media Companies

More Data, More Actionable Insights

In 2009, social games began to show what kind of value can be created on top of social networks. 2010 will be an even more important year.

Social gaming, powered by virtual goods, is this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

• A detailed overview of the current state of the industry
• Specific estimates on market size by segment
• Diagnosis of key opportunities and issues by segment

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends January 25, 2010. All pre-ordered reports will be delivered on January 26, 2010.

Although the report will not be released until next Tuesday, January 26, we are offering a special pre-order discount for those who purchase now. A one year subscription is $1,995 until January 26, at which point the price will go to US $2,495. The one year subscription includes three quarterly updates on key developments in the space.

Or, you can download just this report. The pre-order price is $795 until January 26, at which point the price will go to US $995.

Despite heavy competition, iHeart has become the third largest app on Facebook and made developer Mmkay the seventh largest app developer by monthly active users, according to AppData, with 29.5 million people. What isn’t fully visible is how the developer managed to top heavy competition and become one of the most popular apps.

Well, we can’t underestimate the importance of heart-giving for people — it’s one of the classic themes for the many simple poking and gifting apps on the platform. Perhaps the simplicity was a draw? The app is mostly white space, a list of friends and a counter of how many hearts you can give out. This is in contrast to its competition. Give A Heart, Heart4U and Hearts & Flowers for Friends by Kari are all cluttered with ads and flash apps and options, iHeart is just bare.

The app also encourages heart-giving in bulk with your “beats per minute” raising as you use the app more. You can also put the app on your Facebook profile to speed up the process for others to give, and get, a variety of hearts. The app has also added a feature to gift people you may have forgotten during your last heart deliveries. The app also manages to hide about 170 different heart styles, far and away the largest selection of any heart-giving app.

With up to 24 hearts available to be given in a single day (and with a single click too)  the app has the potential to reach hundreds of friends quickly.

We’ll be keeping an eye on the app to see where it goes from here.

Compete, the first of the big web measurement firms to publish their monthly traffic analysis every month, has released December results for Facebook. The data shows the service reaching 132 million unique visitors, the  highest number yet and up from 128 million in November.

This roughly matches with the growth Facebook saw over the course of last year. However, comScore and Quantcast show the service with around 100 million monthly unique visitors for November, while Compete showed a far higher number for that month (as it has before). One reason for this might be that Compete is counting people who use Facebook Connect on other sites every month, but do not go to Facebook.com itself, as we’ve previously noted. It’s not clear how large this group of people actually is.

Another data point: Facebook’s advertiser tool showed the service had nearly 103 million monthly active users in the US at the end of December, growth of around 4 million people from November. The advertiser tool is usually a month late in reporting data. So, when the other web measurement firms release their December data, we expect to see numbers somewhere above 100 million but well below 132 million.

Other potential data points on Facebook’s December traffic: Google Trends shows a monthly increase in US and worldwide searches for “facebook;”  Hitwise reported especially big spurts around Christmas and New Year’s.

Vietnam was, until this past fall, like most other countries in the booming region: Its citizens were moving on to Facebook. Whether due to the games, photo sharing, status updates, privacy, or other features, the country’s Facebook user base had begun growing fast when the crowd-sourced Vietnamese translation of the service went live earlier last year.

But all that has changed in the last couple of months, and numerous reports suggest the country’s single-party psuedo-Communist government is the reason.

As of June of 2009, Vietnam had nearly 73,000 monthly active users, according to our Global Monitor report. As of early November, it had nearly 1.1 million, and it was beginning to match the Facebook growth rates of other Asian countries like Malaysia, Thailand, the Philippines, Taiwain, Singapore and Indonesia.

But starting in October, according to an Associated Press report, the site began having performance problems. Note: The AP article is no longer hosted on Google and Yahoo, for whatever reason, so we’re linking to one of the spam blogs that picked it up at the time.

It describes what sounds like purposeful censorship on the part of the government:

“[T]echnicians at two of Vietnam’s largest internet service providers said they had been swamped with calls from customers complaining they could not access Facebook during the last week. A technician at Vietnam Data Corp. said government officials had ordered his firm to block access to Facebook and that VDC instituted a block on the site on November 11. He declined to give his name because he was not authorised to speak to the media. However, Vu Hoang Lien, the firm’s top executive, said he was unaware of any such order.

Subsequent reports have indicated more of the same.

Traffic has meanwhile been falling fast. By early December, it had dropped to 1 million monthly active users, according to our report, which relies on data from Facebook’s advertising tool. As of January 1, the country was down to 810,000 monthly active users, according to the latest Global Monitor.

The government continues to deny that it is trying to block Facebook. Dang Anh Tuan, of Vietnam’s Ministry of Information and Communications, told CNN a couple weeks ago that ”we don’t have a policy to block Facebook.” However, the report says “he acknowledged that Facebook activities are a concern to the agency and that its use by Vietnam’s netizens were monitored.” Facebook itself told CNN that there are no Vietnam downtime issues on its end.

So the Vietnamese government is not yet being as obvious as its northern neighbor China, which completely blocks Facebook. But the traffic declines show that whatever is actually going on is getting similar results.

[Map via the U.S. Department of State.]

With more than 350 million monthly active users around the world, Facebook has a lot of users who want to make new friends. And now the company is testing out a feature to make friending a little more meaningful. Once you mark “ignore” on a friend request, you’ll see a new option in addition to being able to report the person for abuse or spam: “Mark that you don’t know” them.

Facebook has never shown friend rejections; rather, the person who made the friend request just never gets a confirmation. Some people don’t seem to get the hint, though, and make multiple friend requests to people they never get friend confirmations from. The new appears to make it so that the recipient can block future requests from the person. Like the long-time option of blocking all application notifications from a friend, it’s another way to reduce the social spam generated by poor etiquette on social networks.

Facebook doesn’t say exactly what happens when somebody gets marked as not known. “Our security team is currently just testing this feature to help inform certain limits on friend requests and combat spam,” a spokesperson told us.

Like a spammy app, it sounds like Facebook has some sort of limit it is testing out on how many friend requests a user can send over a given time. Also, the site is becoming a larger target for automated spam and phishing attacks, and one tactic is for spammers and scammers to set up fake profiles and friend people — this points to another use for the “mark you don’t know.” If used by enough people, it could help alert Facebook to problem profiles early on before they can cause too much damage.

Friends Exposed has seen some of the fastest growth of any title released in the past two months. It’s now the 20th app on the app leaderboard and has made developer Topzy the 17th highest ranked developer according to AppData.

That success is clear, but how it got those numbers is less so. Developer Topzy has three apps on Facebook: Friends Statistics is their oldest title, released in November 2008, while How well do you know your friends? is their newest released this month. However, with 14.24 million monthly active users (MAU) using their apps and 14.2 million of them using Friends Exposed, the title is by far and away their biggest success.

FE saw a high of 16.57 million MAU on December 11th and has dropped slightly to 14.2 million as of January 9th.

The app works like a wall post director or a predetermined twitter post for friends. Users answer a question either about themselves or about a friend and the results are posted on both walls. Essentially, questions come in three varieties: Personal, towards a friend, or fill in with a friends name.

FE’s main competition is from Social Interview an app that started up in November 2009. However, SI has steadly fallen from a high 29.1 million users on December 11th to 17 million on January 9th. With SI being flash based many users probably got stuck on the idea thanks to Social Interview and have jumped to FE in preference to its speed. As of this writing, SI has 516,974 fans, but FE has 546,952 fans.

Users starting up FE for the first time will see a question next to a friends user photo and a box to put the answer. Simple. You can pick specific friends or question types too if you wish. Then, when the answer is posted to their wall, it is posted with the Friends Exposed graphic. This ease of use is almost certainly the cause of the app’s. Whereas other apps try to entertain you in the process, FE entertains you with the results.

FE’s wall-to-wall sharing system is similar to many Facebook applications like FarmVille, Travel Balloon and Give A Heart. What makes FE genius though, is that the title doesn’t require any playtime or a long questionnaires to fill out. It speeds up the process of sharing results to a considerably faster level.

If you post to five walls and five of their friends see it over the course of a few days ( a conservative number),  then FE has reached 25 people with just a minute of fun questions. FarmVille, for example, has grown in part by posting farm results on users’ walls and allowing others to view the results.

Its success has also brought controversy. On the apps main page, one user wrote, “NO ONE should have the right to post whatever they want on my page simply because it is a FB application.” Meanwhile most people agree with Rodrigo Paiz who said, “This distracts me from boredom for a while, plus it’s fun to think about creative answers to bug my friends.”

The new year is producing plenty of movement within our weekly list of the top 20 applications by monthly active users (MAU). The past week saw popular holiday applications sliding from their top spots, headed for an obscurity that will likely last until Valentine’s day.

In the meantime, others are doing well — although overall growth numbers are significantly lower than last week, when Blingee Book had shot to the top with over eight million new users (this week it’s number nine). Several games have taken over top spots, along with a mix of other apps. Here’s the list. For those not familiar, it shows how many new MAU the top 20 apps have gained in the past 7 days.

	Name	MAU	Gain	Gain, %
1.	Pillow Fight	12,081,145	+2,488,511	+20.60
2.	Tiki Farm	3,631,691	+2,023,720	+55.72
3.	Entrevista tus Amigos	5,510,036	+1,759,883	+31.94
4.	Graffiti	5,110,907	+1,723,350	+33.72
5.	Happy Island	7,516,717	+1,649,209	+21.94
6.	Zoo World	12,044,503	+1,548,891	+12.86
7.	Dante’s Inferno	3,895,226	+1,356,560	+34.83
8.	Blingee Book	10,294,302	+1,263,565	+12.27
9.	Quiz Planet!	12,943,152	+1,263,012	+9.76
10.	Happy New Year 2010 by Kari	5,935,394	+1,185,262	+19.97
11.	Causes	23,623,043	+1,162,283	+4.92
12.	Texas HoldEm Poker	23,581,467	+1,097,176	+4.65
13.	Facebook for iPhone	24,083,433	+954,205	+3.96
14.	My Year In Photos	3,671,533	+804,207	+21.90
15.	My Year In Status	7,230,636	+780,306	+10.79
16.	Who Missed You today?	1,974,586	+762,488	+38.62
17.	Music	10,424,510	+737,819	+7.08
18.	@Smiles	5,659,494	+707,615	+12.50
19.	Country Life	6,693,223	+676,886	+10.11
20.	Zoosk	6,578,825	+627,047	+9.53

One shift worth noting is that Petville, Zynga’s latest game, has dropped off the list and into negative territory, at least in terms of MAU. We’ll be talking a bit more about that over at Inside Social Games. Here are some details on the top five apps:

Pillow Fight — This app began its rise just before Christmas, and has risen to the top from number three last week. It’s along the lines of your standard “poke” application, but with plenty of additions: Rankings, points and currency (coins), and a selection of 312 different pillows sorted by category. The top player, believe it or not, has over 42,000 wins under his belt, and others are in hot pursuit. The title is up 20.6 percent to over 12 million MAU.

Tiki Farm — Playdom released this game in mid-December, and it has expanded fairly steadily since. Last week it was only number 19, but its growth picked up slightly thereafter. This is a Farmville-style game, but with an island theme; a volcano takes up about a third of your beginning farm, and the graphics are a bit more cartoonish. Up 55 percent to 3.6 million MAU.

Entrevista tus Amigos — Or, translated from Spanish, “Ask a Friend”. Ask them what? Pretty much anything, but if all you speak is English, you might not fit in with the userbase, which also appears to include a large number of Filipino speakers. Virality is built in to the app; to use it, you have to ask a question, and if you get an answer it gains a new user. Besides letting you ask friends questions, Entrevista also has a “Question of the Day” for all users to answer.

It’s built by Mappdev, which also has a less successful English version called, what else, Ask a Friend. The app rose 31.9 percent to 5.5 million MAU.

Graffiti — This app, which allows you to draw on friends’ walls, was hardly growing at all before the end of last week. There’s no clear sign yet of why it has picked up the pace, but four days of growth served to spike Graffiti up 33.7 percent to 5.1 million MAU.

Happy Island — There are some pretty clear thematic similarities between this Crowdstar game and Tiki Farm, above, but the game itself is more of a theme park builder, with tiny animated tourists wandering back and forth between the shops and attractions you build. Like Tiki Farm, this game was also released in mid-December, and actually has more total users; it’s up 21.9 percent to 7.5 million MAU.

One to keep an eye on for next week: Zoosk, a dating application that made the bottom slot this time. Dating apps haven’t done terribly well on Facebook so far, but Zoosk just took $30 million in early December, so it has plenty of cash to spend on acquiring users.

Check out the top headlines and insights this week fromInside Social Games – tracking all the latest developments at the intersection of games and social platforms.

Monday, January 4th, 2010

• Existing Apps Stay Big on Our First Weekly Top 20 Facebook Games List of 2010
• The Top 25 Facebook Games for December, 2009 – A Mixed End to a Big Year
• The Oregon Trail Brings a Classic Game to the iPhone
• The Top 25 MySpace Games for December, 2009

Tuesday, January 5th, 2010

• Zynga’s December Trademark Spree Shows Potential New Titles
• Playing New Hands with Facebook Game Broadway Poker
• CrowdStar Now Second-Largest Social Game Developer on Facebook, by Daily Actives
• What Does Google’s New Phone Mean for Social Games?

Wednesday, January 6th, 2010

• Train Sets Come to Facebook with TrainSetGo
• Strong Growth, Farming Surprises, Among This Week’s Facebook Games with the Most New Daily Actives
• Viximo Gets New CEO, Partners and Traffic
• The Early Social Game Winners and Losers After Facebook’s Platform Changes

Thursday, January 7th, 2010

• Become an Augmented Shooter with iPhone Application GunMan
• IFB: Facebook is Building a New Payment Operations Team
• Advertising Network Traffic Marketplace Gets Into Social Offers and Ads

Friday, January 8th, 2010

• Chinese Developer Boyaa Flatters Pet Society with Happy Baby Facebook Game
• FarmVille Gifting App Number One on This Week’s Top 20 Emerging Facebook Games
• Ninja Saga: A Solid Facebook Game in the Naruto Ninja Genre
• Social Gaming Roundup: Saving the World, WoW in China, Mystery Fundings and More

Causes App Now Runs the Facebook Charity Gift Shop – Facebook app Causes, which helps charities gain supporters on the service, now powers the Facebook Charity Gift Shop. The change made this week means users may send gifts to friends’ profiles and the proceeds will go to charity. For example, “Your purchase of a Healthy Baby Kit Gift will help the International Rescue Committee provide a baby delivery kit with a warm blanket for a child born in a crisis zone.” As of Friday, Causes had more than 23 million monthly active users.

Facebook Not #1 in Uptime, But #1 in Response – Facebook played second fiddle to Twitter’s uptime last week, and both got beaten by YouTube, according to AlertSite’s benchmarks from December 28, 2009 through January 3. Facebook had 97.22% availability, while Twitter clocked in at 97.97% and YouTube at 99.13%. However, Facebook beat everyone’s response time with 2.21 seconds.

Another Lawsuit Hits ConnectU Founders – Cameron and Tyler Winklevoss, the identical twins who alleged that Facebook founder Mark Zuckerberg stole their code and business plan, are being sued themselves by a former partner claiming the pair shut him out of their business.

Wayne Chang filed the suit December 21 in Suffolk County Superior Court in Massachusetts, naming defendants as the twins, their father Howard Winklevoss, business partner Divya Narendra and attorney Scott Mosko and his firm Finnegan, Henderson, Farabow, Garrett & Dunner.

For his troubles Chang is seeking a 15% stake in ConnectU, a 50% stake in the dissolve joint venture with the twins, i.e., part of their $65 million cash/stock from their case against Facebook.

FTC Didn’t Greenlight Facebook’s Privacy Policy – Federal Trade Commission Jon Leibowitz told The Washington Post this week that his agency is not “generally in the business of giving general advisory opinion in advance.” When it introduced major changes to its privacy features in early December, Facebook said that it had discussed its “privacy program” with the FTC and other regulators. The December changes prompted FTC complaints from a number of privacy organizations. Leibowitz now says that the complains are being reviewed and that online privacy is an FTC priority in the future. Facebook also clarified to The Post that the it didn’t specifically seek approval from the FTC for its December changes.

GOSO’s App for Auto Dealers Streams Inventory to Facebook – Social media marketer GOSO unveiled a new Facebook app this week that allows auto dealers to connect their inventory to their Facebook page. The  BMW of Minnetonka, Minnesota is the first dealership to use it. The app meshes inventory management with social media marketing, as well as allowing dealers to monitor buzz surrounding their products, according to GOSO.

AdNectar Reaches 2 Billion Virtual Goods – AdNectar, the Palo Alto-based word-of-mouth social network marketing service, announced this week that it reached a benchmark 2 billion virtual goods served from its platform and 10 million virtual goods have been sent between friends on social networks. The caveat is that this number is almost certainly a small fraction of the number of virtual goods served overall. AdNectar’s clients include Gillette, Nestle Toll House, Malibu Rum and Snapple/Dr. Pepper and often virtual goods for these companies spread virally; 1 million Malibu drinks sent in two weeks and more than a million Nestle cookies during a recent campaign. Engagement rates range from 2% to 6%, leading to a 16% rise in purchase intent for Nestle and a 9% increase in brand favorability for Malibu.

France Eyes Internet Ad Tax for Facebook, Google, Among Others – France, ever the culture lover, may be set to institute taxes on Internet advertising revenue for Google, Facebook, Microsoft, AOL and Yahoo!, according to a report commissioned by the culture ministry. Up to €20 million ($29 million USD) a year could be gleaned from the taxes to end the “endless enrichment without payback,” as one author, Jacques Toubon, wrote in the report. President Nicolas Sarkozy reported asked Budget Minister Eric Woerth to study the issue further. The tax would help finance artists and online cultural content.

Zoosk Signs onto TBG Facebook Advertising Tool – Zoosk, an online social dating community with more than 6 million monthly actives, signed on to use ONE Media Manager this week, an online display advertising campaign management system TBG developed to simplify and accelerate the social media advertising process.

Zoosk users can use Facebook Connect to combine their dating with social networking and now with ONE Media Manager Zoosk will be able to test and adapt different advertising strategies to different audiences. So far TBG has signed up 20 clients to the service and expects to double their business this year.

Bra Colors Take Over Facebook Status Updates – When women started posting random colors on their Facebook statuses — lavender, black, blue, etc. — many began wondering what the point was. A chain letter passed around between Facebook inboxes prompted women to post the colors of their bra on their statuses to raise awareness about breast cancer, although the success and the veracity of that campaign has been up for debate.

LivingSocial Scores $5 Million in December – LivingSocial closed a $5 million Series A-1 round on December 18, led by investors Grotech Ventures, Steve and Jean Case, as well as LivingSocial’s CEO Tim O’Shaughnessy. The additional funds, in conjunction with July 2008’s Series A round of $5 million, brings total funding to $10 million. Having grown a big base of users on Facebook, the company is set to continue expansion, particularly growing LivingSocial Deals group buying service.

Facebook Shuts Suicide Machine Down – Facebook shut down the Web 2.0 Suicide Machine this week, sending a cease-and-desist letter as it did previously with the similar service Seppukoo, and also shutting down access to Facebook from Suicide Machine’s servers. The cease-and-desist letter was similar to the one Seppukoo received, in that it alleged that the Suicide Machine was violating policy for accessing Facebook users’ information without appropriate permissions. So far the service claims to have unfriended more than 58,000 people on about 900 deactivated accounts.

Former Google Manager New CEO of SocialMedia.com – Former Google AdSense Executive/Director of North American Sales Operations Kurt Abrahamson was named CEO of SocialMedia.com this week. He also served as COO of Jupiter Communications and President of Jupiter Media Metrix from 1994 to 2003, helping build that company’s business from 12 people to an international organization with 520 employees around the world. The change signals that SocialMedia.com is moving away from its social ad network and focusing on becoming an ad platform business for social networks, previously raising $10 million in two rounds to this end.

FBI Adds Widgets, Quizzes to Profile – The Federal Bureau of Investigation updated its Facebook page this week, adding a video widget, quiz and updating the FBI Most Wanted iPhone app. The video widget allows users to embed the FBI’s videos in their pages and blogs, the quiz allows users to determine what FBI career would best suit them and the iPhone app features the FBI’s most wanted list, as well as news about breaking crime stories and a geo-locator for their nearest office.

Flixster Acquires Rotten Tomatoes – Flixster, Inc. turned its partnership with movie review aggregator Rotten Tomatoes into a business deal this week, when it acquired Rotten Tomatoes. Now, the two companies claim to be able to reach 30 million monthly moviegoers through their primary sites, Facebook (where Flixster has long had the leading movies app) and other social networks, and iPhone, Blackberry and Android apps. The combined service provides a database of movies, user and critic reviews, trailers, videos, editorial content, showtimes, theater maps and online ticketing. Financial terms of the transaction were not disclosed.

Privacy Changes Leave Users Vulnerable to Marketers – Facebook’s new privacy policy has left its users potentially sharing more information about themselves than they likely realized, according to blogger Max Klein. He uploading a list of emails saved as a CSV file to Facebook, and found that you can match those email addresses with the publicly-available information provided by those users in their Facebook profiles.

[Leibowitz photo from FTC.gov]

Facebook today announced the creation of its Facebook Fellowship Program for Ph.D. students in the upcoming 2010-2011 school year. This is a way for students to get free hands-on experience and a way for Facebook to get some smart outside labor (and maybe, a way to find future hires?)

“Every day Facebook confronts among the most complex technical problems,” according to the new program’s new web site, “and we believe that close relationships with the academy will enable us to address many of these problems at a fundamental level and solve them.”

Specifically:

• Internet Economics: auction theory and algorithmic game theory relevant to online advertising auctions.
• Cloud Computing: storage, databases, and optimization for computing in a massively distributed environment.
• Social Computing: models, algorithms and systems around social networks, social media, social search and collaborative environments.
• Data Mining and Machine Learning: learning algorithms, feature generation, and evaluation methods to produce effective online and offline models of behavioral signals.
• Systems: Hardware, operating system, runtime, and language support for fast, scalable, efficient data centers.
• Information Retrieval: search algorithms, information extraction, question answering, cross-lingual retrieval and multimedia retrieval

Applicants to the fellowship can visit the Facebook page for more details, but should be full-time Ph.D. candidates involved in on-going research in Computer Science/Engineering, Electrical Engineering or System Architecture or related field. They must be nominated by a faculty member in addition to submitting a 1-2 page research summary applicable to Facebook, a CV and two letters of recommendation by the application deadline, February 15.

The five recipients will be notified by email by March 29.

What’s at stake is not only the prestige of having a Facebook Fellowship on your CV, but for notoriously impoverished graduate students the fellowship also includes: a $30,000 stipend over nine months, $5,000 in travel expenses, $5,000 for a personal computer and the opportunity to apply for a paid summer internship.

There’s no limit to how many students a university may nominate, non-U.S. citizens are eligible, the fellowship would begin at the start of the recipient’s academic year (August or September, usually) and Facebook said it would “strive to work with each participant” in issues related to intellectual property.

The program is meant to “extend our involvement and collaboration with the academic world,” according to Badros.