As new acquisitions churn the social games industry, developers continue on with new games ranging from fight filled flora to locals of a more tropical destination. Here are the headlines from Inside Social Games.

Monday, February 22nd, 2010

• Zynga and Slide Hold Down This Week’s List of Top Facebook Games by Monthly Active Users
• Merscom Makes a Tower Defense Facebook Game for “The Crazies” Movie
• Facebook Sponsored Ads Show Games that Use Its Credits Virtual Currency
• Killing Time in Peace with Absolute Solitaire on Facebook

Tuesday, February 23rd, 2010

• Ngmoco Raises $25M Third Round, Makes Small Acquisitions, Plans More Free-to-Play iPhone Games
• Conduit Labs’ Music Pets Amps Up the Facebook Pet-Caring Genre
• WildTangent Introduces Its Incentivized Advertising Services to Social Games
• Tiki Resort: Playdom’s Latest Facebook Game Brings the Amusement Theme to Tropical Islands

Wednesday, February 24th, 2010

• Happy Island, MindJolt, and Yet More Zynga on This Week’s Top Facebook Gainers by Daily Active Users
• Emily’s Girl Talk – An iPhone Game for Young Women
• More Details on Inside Social Apps 2010 – Coming April 20th in San Francisco
• Hi5 Beefs Up Social Games Platform with Purchase of Big Six
• Selling Digital Goods: Stay Safe and Reap the Rewards

Thursday, February 25th, 2010

• Japanese Developer C.A. Mobile Gets Into Facebook with Bingo Derby
• PopCap Brings Plants vs. Zombies to the iPhone with Gusto
• 10 Potential iPad Games and Concepts to Build (Plus Bubble Ghost)

Friday, February 26th, 2010

• Gambling Madness, Islands and Mahjongg on This Week’s List of Emerging Facebook Games
• 5 Tips for Using Discount Pricing to Maximize Revenue in Social Games
• Social Gaming Roundup: Hello Kitty Fundraiser, gWallet, Playfish, Hi5, and More

Facebook Interested in Loopt? – TechCrunch reported this week that Facebook has been doing background checks on Loopt, a mobile check-in service, as is usually the case when companies consider an acquisition. Neither Loopt nor Facebook would comment, but MG Siegler points out that Facebook has been behind others in adopting location features. Facebook’s own TOS started including location language a few months ago, and we expect Facebook to roll out location based services later this year.

Fortune 500 Companies Flock to Social Media – Communications firm Burson-Marstellar published a study on social media marketing, the Global Social Media Check-Up, in which they surveyed the 100 largest Fortune 500 companies, finding that 79 of them use at least one social media platform.

Among corporate blogs, Twitter, Facebook and YouTube, Twitter was the most used with 65% of the companies using an account, 54% had a Facebook fan Page, 50% a YouTube channel, and 33% had corporate blogs; 20% used all four platforms.

On an interesting regional note, the study found that 69% of U.S. companies had fan Pages on Facebook, but only 40% did in Asia and 50% of companies in Asia had corporate blogs, but only 34% in the U.S.

Google News Redesign – Google News is testing out a new design that includes trending topics on the left, new personalization options, and most recently, different sharing options. Google seems to be testing a design where stories may be shared via email, Google Reader or Facebook, according to TechCrunch, but not with Buzz.

Facebook Emails Sent to Wrong People During Code Push – The Wall Street Journal reported this week that one of their editors received about 100 Facebook messages not intended for him during a glitch that Facebook told them was the result of a bug in the company’s “regular code push.” Everything from mundane messages to one couple’s “explicit” chat landed in web editor Zach Seward’s inbox after a while he was unable to access his account and the messages were subsequently removed from the social networking site. Facebook emailed the Journal and stated, “a bug caused some misrouting to a small number of users for a short period of time.”

PayPal Plans App Store – PayPal is set to open an applications store later this year in hopes that developers can help the company deepen its relationship with external programmers while planning its expansion into mobile payment transactions. Osama Bedier, Vice President of Platform Business Unit and Emerging Technologies at PayPal said the app store represents part of the company’s strategy to “lure external developers after the company opened its payments platform late last year.”

PayPal hopes to expand into smart phone payments and beyond online commerce, which makes up only 4% of retail spending in the U.S. The hope is that, eventually, customers can do things like use PayPal on their phones at the grocery store or while pumping gas.

Pentagon Oks Facebook – The Pentagon ruled Friday that social networking would be allowed for the military, for everyone from ground troops to military higher-ups. The Department of Defense had been reviewing the issue for seven months and decided that social networks were useful for recruiting and public relations, although they allowed commanders the ability to cut off access, temporarily, in the case of security concerns.

Facebook Critics’ Profiles Restored – Three Argentines involved with the production and distribution of a book critical of Facebook were restored access to their profiles last week after almost a month. The profiles of “Faceboom” author Juan Faerman and the book’s promoters Guillermo Otero and Fernanda Gaitan Broun were deactivated without any explanation shortly after the book launched in Europe and Faerman told Venturebeat that his emails to Facebook about his account went unanswered.

Incidentally, a 30,000-strong Facebook group created by fans of the book was deleted, too, Faerman said. Venturebeat said inquiries to Facebook about this issue were returned with the standard “we don’t comment on specific users’ profiles.”

Facebook has a new experiment running, that appears to be aimed at increasing engagement on the right-hand column of some pages. In the “Suggestions” box on the right-hand side of some pages, including the Games dashboard and photos, it is showing photos from your friends’ albums and notices about unread messages.

The box has previously shown suggested friends or Pages you might want to become a fan of. The introduction of content from your friends could make that part of the page more interesting — the only other content in the column is advertising. If users get more used to looking at Suggestions for interesting material, overall engagement for the feature could increase, and they might be more likely to notice and click on the ads.

Strangely, though, Facebook seems to be showing photos from many months ago. We’ll probably see a variety of content as the test progress.

Facebook has been busy filing patent applications for years, with the number coming to 35 as of October 26, 2008, when it submitted one for the “resource management of social network applications.” The United States Patent Office also awarded it a patent yesterday, for “dynamically providing a newsfeed about a user of a social network.” But the implications of the awarded patent — and the pending applications — are not clear.

Many commenters are concerned that Facebook is obtaining patents for concepts that it did not invent, and stifling innovation on the web as a result (read more about that on Techmeme). However, before jumping to any conclusions, one must first be aware of the convoluted history of social networking patents.

Friendster already owns or has filed for more than a dozen of them. Four patents it has been awarded include “compatibility scoring of users in a social network,” “how people are connected on a social network,” “the process of friends encouraging each other to upload content,” and “ways for users to manage social-network friendships.” If these concepts sound familiar, it’s because they are quite common to web sites — Friendster did not clearly invent them, despite the decision of the United States Patent Office. Regardless, whatever patents Facebook might obtain, Friendster appears to have a legal edge in terms of social networking intellectual property.

Thing is, Friendster has never tried to enforce these patents against Facebook or any other social network, that we are aware of. One reason may be that the company doesn’t think it has a good shot at winning in court, because the patents are so broad.

Meanwhile, Facebook has been under regular attack over the years from other companies with patents related to social networking. In 2008, for example, it got hit with a lawsuit from Leader Technologies, a company that received a patent in 2002 that “relates to a method and system for the management and storage of electronic information.” Leader Technologies provides web conferencing software, but is not clearly competing directly against Facebook — so the move comes across as trollish. Last July, a judge appeared set to make Facebook reveal its source code as part of the case. From the heavily redacted court papers available on Justia, it appears the judge has since agreed to have the patent re-examined.

The fact that Facebook has been filing patents for years while it has been under attack suggests the company is trying to gain patents defensively, so that more companies don’t patent its innovations and then take it to court. This is basically what others in technology have done for years.

VentureBeat‘s Matt Marshall had a well-informed take on the social networking patent situation, back in 2006, when Friendster was awarded its first patent.

But if you look at the patent details, and consider precedent in this sector, it’s likely the patent will be used as a defensive tool — rather than as a predatory attempt to wring license fees from other companies. It focuses on things like the pathway of relationships, how they are displayed, and the determination of who is in your circle of friends. This isn’t surprising. Friendster applied for the patent three years ago, around the same time LinkedIn chief executive Reid Hoffman bought rights to another key social networking patent.

LinkedIn’s patent (No. 6175831), by contrast, focuses on databases of contacts, how contacts are defined, how you email those contacts, but says nothing about pathways of friendships. Basically, it covers all forms of “relationship confirmation.” At the time, Hoffman made clear his move was ”for protection” against a bigger player that might grab the patent, kill innovation and stain the industry with spam-like tactics that turn users off.

Hoffman’s patent covers a “method and apparatus for constructing a networking database and system.” It’d appear to put Friendster, Facebook and many other sites at risk.

Taking stock of the situation: there are many, very broad social network patents floating around. Some are in the hands of companies like Leader Technologies, who have proven they are willing to go to court to defend what they believe to be valuable intellectual property. Even if that intellectual property appears to be pretty bogus to both the trained and the untrained eye.

Even though Facebook appears to be acting defensively, it has not said this is the plan. If it doesn’t intend to act like a patent troll, it should say so. For now, here’s its canned statement:

The launch of News Feed in 2006 was a pivotal moment in Facebook’s history and changed the way millions of people consumed and discovered information on the site. We’re humbled by the growth and adoption of News Feed over time and pleased with being awarded the patent.

The patent Facebook was awarded for its news feed does appear fairly broad, although not as broad as some commenters have supposed. The abstract from the filing:

A method for displaying a news feed in a social network environment is described. The method includes generating news items regarding activities associated with a user of a social network environment and attaching an informational link associated with at least one of the activities, to at least one of the news items, as well as limiting access to the news items to a predetermined set of viewers and assigning an order to the news items. The method further may further include displaying the news items in the assigned order to at least one viewing user of the predetermined set of viewers and dynamically limiting the number of news items displayed.

Patent attorney and blogger Brett Trout concludes that the patent is limited to a narrowly defined set of features that should leave most companies with some form of “news feed” in the clear. However, he cautions, the patent includes enough ambiguity that other companies should be paying attention.

We’ll continue to cover the real-world ramifications of social networking patents as they become evident.

Here’s a list of Facebook’s 33 other patents, as compiled by SEO by the Sea:

Systems and methods for dynamically generating a privacy summary

Systems and methods for dynamically generating segmented community flyers

Systems and methods for generating dynamic relationship-based content personalized for members of a web-based social network

Systems and methods for providing dynamically selected media content to a user of an electronic device in a social network environment

Systems and methods for measuring user affinity in a social network environment

System and method for tagging digital media

Mapping relationships between members in a social network

Systems and methods for generating a social timeline

System and method for automatic population of a contact file with contact content and expression content

System and method for curtailing objectionable behavior in a web-based social network

Digital file distribution in a social network system

System and method for determining a trust level in a social network environment

System and method for confirming an association in a web-based social network

System and method for giving gifts and displaying assets in a social network environment
Web-based social network badges

Platform for providing a social context to software applications

Systems and methods for keyword selection in a web-based social network

System and method for invitation targeting in a web-based social network

System and method for collectively giving gifts in a social network environment

Identification of and Countermeasures Against Forged Websites

Systems and methods for network authentication

Systems and methods for classified advertising in an authenticated web-based social network

Personalized platform for accessing internet applications

Systems and methods for providing privacy settings for applications associated with a user profile

System and methods for auction based polling

Providing Personalized Platform Application Content

Social Advertisements and Other Informational Messages on a Social Networking Website, and Advertising Model for Same

Communicating Information in a Social Networking Website About Activities from Another Domain

Targeting Advertisements in a Social Network

Dynamically Updating Privacy Settings in a Social Network

Sharing Digital Content On A Social Network

Community Translation On A Social Network

System, Method and Medium for Managing Information

[Illustration by Bob MacNeil via UC Berkeley.]

As a followup to our post a couple days ago, this morning Facebook has posted a few updates to the Developer Roadmap regarding upcoming changes to the ways Platform applications integrate with Facebook’s core “viral” communication channels.

First, Facebook has now given a specific hour for the deprecation of notifications: 10:00 AM US Pacific Time on Monday 1 March. We’re seeing a lot of developers blasting out notifications in one last go before Facebook turns off the channel.

Second, Facebook has pushed back the dates on changes to invitations and requests. Before this morning, Facebook’s roadmap said that changes to the ways users could access invitations and requests would be going live in February. However, now the timing for moving invitations to a new tab in the Inbox has been changed to “March,” and the timing for deprecating other requests has been changed to “Early/mid 2010″ (still 30 days after launching changes to the Share dialogs).

Facebook has often pushed back items on the Developer Roadmap since announcing it last fall, usually to give everyone involved more time to prepare. When the company only lists a month, and not a specific day, on the Roadmap, it can imply that the launch timing is softer (we could have been clearer about that in our last post, but we wouldn’t suggest assuming that will be the case in your product roadmaps).

Here’s the latest info from the Developer Wiki on Facebook’s plans for the changes to requests and invitations – and below, a mock of a potential implementation of invites in the Inbox.

Regarding Requests:

Today requests fall into two broad categories: “invite” requests (where a user can encourage their friend to check out an application), and “share” requests (when a user is sharing content within an app that is interesting). We’re going to separate these actions more clearly in the future.

Users will still be able to intentionally share stories into the stream.

To enable users to invite their friends to use an application, you will use invites which will be aggregated in a special filter within the Inbox. We will create a new API for this, which is still in development.

To enable users to share information with each other from within an application, you will use our improved Share dialogs (still in development), which will be sent via the Inbox.

The existing request functionality will be deprecated. Requests sent via the existing request forms will be displayed as invites (not as Inbox messages).

And here’s the Invitations mockup:

Our AppData list of top emerging Facebook apps (those still under a million users) is dominated this week by games. We find ourselves saying that quite often, but it’s true to an extraordinary degree this time around; there are only two differences between the list below and the one we’ve published over on Inside Social Games, where you can go to get your gaming data fix.

It certainly seems that the odds are on the side of developers who, if not actually making a game, at least classify their app as a game when it’s released. Facebook certainly isn’t very strict about its categories. See if you can pick out the non-game apps:

	Name	MAU	Gain	Gain, %
1.	Okey Oyna	615,426	+433,066	+70.37
2.	Roulette Madness	674,511	+426,778	+63.27
3.	Translations	371,412	+367,381	+98.91
4.	Capitales del mundo!	417,043	+345,884	+82.94
5.	Poker Madness	637,020	+284,849	+44.72
6.	Funflow	562,407	+252,157	+44.84
7.	VIP Challenge	356,940	+245,676	+68.83
8.	Bubble Island	507,703	+244,301	+48.12
9.	Tiki Resort	642,849	+242,850	+37.78
10.	Mahjongg Dimensions	400,042	+194,804	+48.70
11.	Enchanted Island	434,004	+188,209	+43.37
12.	Jewel Puzzle 2	308,492	+184,640	+59.85
13.	Collect Roses	494,110	+175,433	+35.50
14.	Jumping Dog	374,632	+168,264	+44.91
15.	SuperPocus	560,688	+159,048	+28.37
16.	快打之王	654,065	+155,261	+23.74
17.	Farkle 2	416,135	+153,051	+36.78
18.	Absolute Solitaire	245,845	+143,286	+58.28
19.	Fashion City	320,947	+136,587	+42.56
20.	Horoscope du Jour	325,347	+131,071	+40.29

Translations, of course, is very plainly not a game; it’s Facebook’s attempt to crowd-source the translation of its platform into all the world’s languages. But its appearance here appears to be based on some errors in Facebook’s reporting, rather than a sudden invasion of polyglots.

In keeping with the international theme, the next app is Capitales del mundo!, a Spanish-language app. Although it’s listed as a game and appears to have gaming elements, its true game appears to be forcing new users to allow it to post to their walls, hence the growth. According to user reviews, the app couldn’t even be bothered to list the correct world capitals, its advertised purpose.

Funflow, by King.com, has showed up three weeks in a row. It’s a catalogue app for the company’s games. Again, not a game itself, but not very far off. This type of app is becoming more common as web gaming companies with large portfolios move onto Facebook; the prototypical example is the quite large MindJolt Games.

Moving down past a number of pure games, we find Collect Roses, which has levels, but is otherwise just a gifting app. Users seem to enjoy it, though.

Finally, at the very end of the list we have Horoscope du Jour. Each day, of course, requires its own horoscope, although only 14 percent of users seem to come back for it. Still, that’s a pretty good percentage for this type of app. As you will have picked up from the name, it’s in French.

Third-party advertising networks have been running ads in Facebook applications for years. But between Facebook’s own self-serve advertising units, stricter platform rules and a host of new companies, the market has gotten more competitive. Today, one of the newer entrants, an established online advertising company called LifeStreet, has purchased the Facebook advertising network of one of the earlier ones, SocialCash.

Terms of the deal were not disclosed. SocialCash is planning to launch a new product, it says in the two companies’ press release, and wants to focus on that instead of its ad network. The company was one of the first to use Facebook user names and profile photos in advertisements on the site, but Facebook banned third parties from providing this kind of ad in a policy clarification last spring. It’s not clear how that affected its revenue, but we spoke to LifeStreet chief executive Mitchell Weisman this evening and he described SocialCash as a main competitor.

To be clear, for those not familiar, LifeStreet and other companies provide advertising within applications, but in the form of banners and other more traditional formats — these are not offers. The ads typically appear in applications besides games.

LifeStreet, which has had a web-wide advertising network for years, began pushing into Facebook in 2009. It made the service a focus in the second quarter, Weismann says, and has quickly grown that area of its business. Other online advertising networks have also been moving into Facebook. Those competitors include Adknowledge, which bought Facebook ad networks from Lookery and Social Media, and Traffic Marketplace, which recently began targeting application developers. We’ll be covering LifeStreet and other advertising networks in more detail, so stay tuned.

We’ve been covering Facebook’s experiments with its Credits virtual currency closely here on Inside Facebook over the last year. Today, Facebook has officially released some details about the payments terms of the program for the first time. Although Facebook isn’t giving developers a roadmap for what to expect in the future, it’s another step in Facebook’s gradual process of becoming the currency merchant of record for virtual goods transactions on the Facebook Platform.

Most important in today’s published terms is Facebook’s specific disclosure of the 30% revenue share it is taking for all Credits purchases — a percentage we’ve been hearing since last May. In other words, when a user purchases Facebook Credits in a game or application, 30% goes to Facebook, while 70% is delivered to the developer. Obviously, this is a higher fee than many other payment methods require, but Facebook wants to establish a high starting point to establish the value proposition with developers and turn this into a meaningful revenue stream over the long run. To get it started, Facebook’s going to have to prove out the results compared to the many third party virtual currency payment providers and aggregators operating on the platform with developers.

Facebook’s Ethan Beard says that Credits is still in a “closed beta” at this point, but developers can now express their interest to Facebook and request to join the companies that are already testing Credits, including Zynga, Playfish, Playdom, CrowdStar, Slide, RockYou, and 6waves. Beard says Facebook is “not against” testing Credits with smaller developers too, it’s just “more cost effective” to test with larger ones.

In addition to the release of the official payments terms, Beard says Facebook plans on launching several consumer marketing campaigns to make sure Credits is a success, including “user education, feeding Credits, and bulk discounting.” Just a few days ago, Facebook officially announced it would be integrating PayPal as a Credits payment option, and that implementation should be launching within the next few weeks.

Overall, 2010 is definitely proving to be the year that Facebook takes a more active role in the virtual goods ecosystem that has grown up on the Facebook Platform. For more data on the size and future of the market, see our recent research report: Inside Virtual Goods: The Future of Social Gaming 2010. We’ll of course continue tracking the market as it evolves.

Many developers have been upset in the past due to Facebook’s rapid Platform iteration pace. Specifically, when Facebook releases new bug fixes or features, developers are often caught needing to update the code on their live sites. While Facebook has had a beta site for some time (beta.facebook.com) which developers can use to test their code against upcoming changes, the updates and fixes were often a black box resulting in low testing rates.

Yesterday, Facebook released their new Migration Tool which essentially allows developers to toggle new features/fixes on and off at the throw of a switch. While all the features/fixes will go live eventually, this new tool gives developers control over exactly when their application receives the update during the transition window.

The best way to utilize this new migration tool is to have a copy of your application which developers can use to update and integrate new features and fixes. Then, once satisfied with the results, integrate the code into the live application and turn on the appropriate feature switches. Users will not experience downtime and the application will be up to date with the latest changes.

Although Facebook has US offices outside of its Palo Alto headquarters — in New York, Atlanta, Los Angeles, Chicago, Dallas, Detroit and Washington, D.C. — it is set to make its first big domestic employee expansion 0utside of Silicon Valley.

If Austin, Texas’s city council approves a part of an incentives package, Facebook will open up a 200-person office there in May.

The office will focus on customer service, developer support, sales support, inside sales and risk management, Facebook tells us, with hiring obligations outlined in the economic development agreement between Facebook, the city, and the state. The state-run Texas Enterprise Fund will invest $1.4 million to lure Facebook in, and Austin will provide another $200,000. 180 of the jobs would be local to Austin, with the average wage being $54,000, according to the Austin American Statesman.

While the deal isn’t entirely closed, sources suggest it is a sure thing.

“Facebook is investigating locations around the U.S. to establish an additional online sales and operations office,” Facebook chief operating officer Sheryl Sandberg says in statement a provided by the company. “Austin is among the cities under consideration because of the area’s many attractive attributes including a deep talent pool and strong leadership in Austin, Texas and in Washington.”

Austin is home to the University of Texas, the state’s capitol, and a variety of high technology companies. It has an educated and technology-focused workforce, and is considered one of the top tech hubs in the US — outside of Silicon Valley, of course.

Texas Governor Rick Perry, who is in the middle of an elections campaign, has published about the move already — via a Facebook note, of course. He says that along with the job creation, Facebook will bring in $3.1 million in capital investment.

In other recent domestic expansion news, Facebook has said it is plans to expand its head count this year — it currently sits somewhere around 1000 — including to an additional big new office in Palo Alto. It also recently began building a data center in Prineville, Oregon.