Facebook has acquired Octazen, a small startup most known for its contact importer software, GigaOm’s Liz Gannes reports. Facebook’s Larry Yu characterized the move as a “talent acquisition,” saying the company’s two employees have joined Facebook as engineers.

Although it may sound boring, contact importing has actually played a very important part in Facebook’s growth over the last five years. Contact importers are software tools that allow you to provide login credentials for an email service like Gmail or Hotmail, and automatically import the names and email addresses of people you’ve communicated with in the past.

Facebook has used contact importers to make it easier to find friends already on the site, and invite new friends to join, heavily promoting its contact importer on the home page to promote growth. Some startups have also been known for behaving more aggressively and using contact importers to automatically spam all imported contacts.

Before now, Octazen licensed its software to customers interested in adding an out-of-the-box contact importer that worked well across a number of email providers. It’s likely that Facebook was using and iterating on the Octazen code so heavily that they decided to bring the team in house.

Facebook tells us Octazen will remain based in Malaysia, making them the first Facebook employees based in Asia full time. However, Facebook says, “This won’t become an office… It’s just a talent acquisition and they’ll be considered remote workers since we’ve opted to let them remain in Malaysia.”

In the latest of Facebook’s many new efforts to promote Credits, the company appears to be giving special prominence to applications that exclusively use the virtual currency. Here’s what’s happening.

In the redesigned version of the home page, there are new Games and Applications dashboards, both of which are accessible from the home page. And there’s a “Featured” section in the Games dashboard. It has previously, from what we’ve seen, shown a pretty random variety of applications.

But now it’s only showing, from what we’ve seen, games from CrowdStar, who is the only developer we know of that’s exclusively using Credits. And, next to each featured CrowdStar game, there’s a new Facebook Credits branded logo.

Here’s what Facebook tells us:

The applications in the “featured” section of the Games Dashboard currently include those that are testing Facebook Credits, to help users easily identify where they can interact with Facebook Credits, and better acquaint them with these applications. Selection process for the Games Dashboard will likely evolve over time.

The result is that this section will help Credits-only games advertise to millions of users — although it’s not clear how games that provide Credits as one of several currency options will be treated. By providing a virality and retention bonus via the Featured section, Facebook is incentivizing developers to switch to Credits.

In fact, the first sign of this move appeared last August, in test screenshots for the new redesign. From our analysis of Credits in December:

What’s more, as certain test screenshots have appeared to show, Facebook can make Credits — including the purchase process — an obvious and seamless part of the overall site experience. For example, the screenshot at the top of this post shows the number of credits you have within the top navigation bar on the site. It’s possible that Facebook makes Credits optional, but appealing, using site placement to encourage adoption. You can imagine a portion of the app store that features apps that use Credits, for example, as you can see in the screenshot below.

Facebook has separate plans for the Applications page’s “Featured” section, though. From the company:

The applications in the “featured” section of the Applications Dashboard include some of the most popular and engaging on the site, based on editorial selection by the Facebook team. This section provides an additional way for users to quickly find interesting applications. The remaining sections of the dashboards are populated with applications based on what you and your friends are interacting with.

We’ll be following how Facebook continues to roll out Credits.

Police departments around the United States have begun to incorporate Facebook into their policing efforts, using the network to serve a variety of needs. Pages created to find missing persons have rendered useful information and tips on police pages or the pages of criminal elements have led to arrests.

As we previously reported, there are many ways for a municipal entity to help their constituencies on Facebook, such as posting events and providing useful information in an accessible way. A few police departments we spoke to said that they use Facebook to serve very specific needs online, and in doing so, are able to complement the work they’re doing in the real world.

Most departments had a similar format for their pages: the Walls had press release-type information, the photos consisted of suspect mug shots and officers involved in community events, and either the notes or blog tabs included additional information.

Greenfield, Indiana’s police page has 676 fans and posts lots of press releases, photos of police in the community, links to other police agencies in the state and also posts surveillance footage asking the public to help identify the people in the videos.

Police in Salinas, California recently posted a lot of information about a deceased police officer, but also posted about downed power lines, solicited tips and reminded people to sign up for text message emergency notifications. The page has 914 fans.

Shelby, Ohio’s Police Department Facebook page has 1,150 Facebook fans and a population 9,300; it appears a significant portion of the residents are fans. The result is a really community-oriented page where locals ask questions about problems with their neighbors or power company employees and the police department answers them.

This department takes the idea of a Facebook conversation to the next level by really engaging in tit-for-tat exchanges. A good example is a discussion about a new police facility that began on January 7 and has 31 posts to date in which practically every comment made by a resident garnered a response from the page’s admin.

It’s interesting to note that a few of the big police departments we looked at, Dallas with 2,800 fans and Chicago with 7,900, had pages that were active with status updates. But because the content was all generalized and the comments were disabled, they seemed just as impersonal as the police’s web sites.

Smaller departments, on the other hand, seemed to create pages more in-touch with their residents for providing very specific and useful information, such as weather warnings or school closure notices.

The Alachua County Sheriff’s Department in Gainesville, Florida set up a Facebook page last spring after informal surveys at the University of Florida showed that, while many of the 80,000 students there may not watch the local news or read the local paper, almost all were on Facebook, said Public Information Office Stephen Maynard; the page currently has 514 fans.

Law enforcement needs to be able to disseminate information and for the Alachua Sheriff’s Department that meant going to Facebook, he tells us, noting that other social networks like Twitter and YouTube were also popular but Facebook was “the big one.” The idea here wasn’t to create a dialogue, so as to avoid negative or obscene feedback Maynard said, but rather to be able to broadcast information, one-way, to the public.

The Massillon Police Department in Ohio took a different approach to their Facebook page when they launched three weeks ago, currently with 1,675 fans. With a population of 32,600 as per the Census Bureau, Massillon’s Police Department created a much more conversational page by consistently engaging local people on a local level, giving them information about weather advisories, school closures, people with warrants out for their arrest and lots of other local content.

But, said officer and page administrator Brian Muntean, that’s the point.

“I thought that would be a good way to open up communication between the public and our police department,” said Officer Muntean. “A lot of people just feel more comfortable posting on the Wall than talking on the phone.”

While setting up the page he found that people tended to check Facebook more often than the newspaper and so it was the perfect place to share mug shots and other pertinent information. So far his hunch has paid off as three people whose warrants were posted on the page have turned themselves in — including a mother who cajoled her son to turn himself in after seeing his warrant on Facebook.

Facebook gives his department more control over information than releasing it through traditional media, Muntean said, which is why more departments are likely to start using the social network in the future. The Facebook page has proven, in three short weeks, to be an effective tool to communicate with the public; a recent poll he posted about an Ohio traffic law received 50-plus comments in six minutes.

“I try to use it as an educational tool,” Muntean says of the Facebook page, “It makes peoples’ lives a little easier and safer.”

More than 3.5 million events are created each month on Facebook, and the average Facebook user is invited to 3 of them per month. So if you’re one of the millions who uses Facebook Events to share your plans, or Facebook Birthdays to keep track of friends birthdays, then you should check out fbCal.

Built by calendar aggregation company Mixin, the free service lets you automatically synchronize this Facebook information to a variety of other calendar services, including Google Calendar, Apple’s iCal (including directly in the iPhone), Microsoft Outlook, Mozilla Sunbird, and Lotus Notes.

Once you complete the syncing process, you’ll be able to see calendar entries for events and birthdays from Facebook within any of these programs.

Facebook itself lets you subscribe to individual events, which is a good option if you want to only add individual events. It has previously also let you do a bulk export of events so you can track upcoming ones automatically, albeit not with granular features that fbcal offers. However, while the bulk exporter option is still available for use by developers on the platform, and live for people who have previously set it up, it is no longer visible on the Events page. It used to be, but seems to have disappeared with the redesign earlier this month (we have an email in to Facebook about that and we’ll update when we hear back).

Instructions obviously vary for each program, and the company details them here. There are a few options to note for the calendar entires. You can choose to subscribe to various types of event statuses you’ve previously marked in Facebook, from “Attending” at the minimum to “Attending, Maybe attending, Not attending, Awaiting Reply” at the maximum. You can also subscribe to your Facebook calendar entries by RSS, if you prefer using Google Reader or another reader. Or you can download your existing entries directly — the problem with that option is that you won’t get the automatic updates from Facebook. FbCal provides the calendar in the iCalendar format (.ics), which is also used by other calendar applications beyond the ones we list here. Finally, among general features, you can set the time zone so the events match your calendar.

The birthday feature can also be useful, although it is a bit noisy if you have a lot of Facebook friends — a good addition would be a way to select the Facebook friends whose birthdays you want to remember.

We tried the service out with Apple’s iCal, and it worked very well. Click on the iCal logo for Events and the iCal desktop app loads, and asks you to subscribe to the Events calendar you’ve selected. Hit Subscribe and you’ll create a new Facebook Calendar (you can then choose a color, and other iCal options), then you’ll see your Facebook items auto-populated.

An Italian app leads this week’s AppData list of Facebook’s emerging apps still under a million monthly average users, and two other foreign-language apps aren’t far behind within the top 10. Though few foreign-language apps are among the largest, there seems to be an ever-growing crowd with a few hundred thousand or million users.

We’re also seeing a few holiday-themed apps popping up. Take a look:

	Name	MAU	Gain	Gain, %
1.	Video 4 You	481,961	+478,376	+99.26
2.	Lovers	716,742	+417,522	+58.25
3.	Send Glitter!	593,362	+320,966	+54.09
4.	World at War	951,116	+262,848	+27.64
5.	Demande à tes Amis	635,674	+238,503	+37.52
6.	6 waves Gaming Network	903,498	+180,505	+19.98
7.	Friendship Gifts Special	289,267	+137,426	+47.51
8.	開心農場 2	680,743	+136,774	+20.09
9.	Happy Chinese New Year	355,105	+135,117	+38.05
10.	St. Patrick’s Day (renamed)	980,374	+126,230	+12.88
11.	Mahjongg Dimensions	205,238	+124,941	+60.88
12.	A Special Bouquet Greeting!	576,141	+123,995	+21.52
13.	Top Fish	606,527	+117,859	+19.43
14.	SuperPocus	401,640	+116,010	+28.88
15.	Bracket Challenge by Citizen Sports	165,709	+109,335	+65.98
16.	SCRABBLE	874,163	+104,402	+11.94
17.	Flowers for Friends	694,160	+101,584	+14.63
18.	Di la Verdad!	207,371	+96,696	+46.63
19.	FaceDouble Celebrity Look-alike Doppelganger	971,977	+92,680	+9.54
20.	MyHeritage Celebrity Look-alikes	261,672	+89,712	+34.28

Video 4 You, at the top of the list, is an Italian app used to dedicate YouTube videos to friends — a gifting app, essentially. It has gained all of its half million users during the single week since it was released.

Lovers, at number two, has been out a bit longer, but gained almost as many users in a single week as Video 4 You. This looks at first like a standard poking app, but there may be a bit more to it. “Soon,” says the app’s description, “Lovers will also allow you to be in multiple relationships at once.” If only it were so simple!

Next up is Send Glitter!, which is indeed a straightforward poking app. It has actually been around since 2008, too, with relatively low user numbers for some time. Why the sudden pop in growth? If the reviews on its page are to be believed, the app is auto-posting without user permission.

We mentioned the 6 waves Gaming Network when it appeared on this list last week; this app should perhaps be categorized with the games, because it’s just a directory of the developer 6 waves’ many games. At this point, the app actually has over a million users; Facebook’s recent slow updating left it listed here.

Finally, there are the holiday-themed apps we mentioned above: Happy Chinese New Year and St. Patrick’s Day (renamed). The Chinese New Year was a week ago, so the former will probably disappear quickly, while St. Patrick’s is several weeks ahead, so there’s still time for themed apps around that holiday to grow.

Facebook has been busy working on its Credits virtual currency plans lately — but what exactly is it doing? Developers have told us conflicting answers. Some say that the company is going to force every application to use Credits as the sole virtual currency, while others say that Facebook has not made any such decision. We’re also hearing conflicting reports on how profitable Credits are turning out to be so far. Note: Most developers we spoke with asked to remain anonymous in order to preserve their relationship with Facebook.

Meanwhile, Facebook itself sees Credits as being in the very early stages, and it has not made long-term decisions about how the virtual currency will be implemented.

The company has been testing Credits in its gift store since 2008, and with third-party applications in May of last year. But Credits have only been showing up widely since last fall, around when we were hearing that the company was talking to big developers about implemention.

Now, clearly, Credits is on the move. Facebook began hiring for a “brand-new” payments operation team in the last few months. The latest home page redesign includes a new left-hand navigation showing dashboards for applications and games, and both the Apps and Games pages show users their total Credits balance. A link to users’ Credits balance now also appears in the top right-hand “Account” dropdown menu.

More and more big developers have begun offering Credits as a payment option partly, it appears, as a result of encouragement from Facebook. Zynga is now running the currency in some of its smaller games, including Pirates: Rule the Caribbean. Playdom has it live in Tiki Farm and (lil)Green Patch. SGN does with (fluff)friends. Playfish has one of the biggest implementations, with Credits live in Restaurant City. Slide has most recently introduced the payments option, to SPP Ranch, Top Fish and Superpocus.

CrowdStar, which saw game-changing growth last fall, has gone the greatest lengths to integrate Credits. The latest game, Happy Island, launched using it exclusively last December — the first big one to, that we know of — and the company has since replaced other payment services with Credits on all of its applications, including its biggest hit, Happy Aquarium.

Do Credits Bring in More Money?

For anyone with a Facebook app that relies on virtual goods, Credits is a big deal. First, Facebook is taking a 30% cut of the revenue, something that we’ve understood to be the case since last May. This is the percentage that Apple takes from developers on its iTunes App Store, but more than the few percentage points that some third-party payment providers, like PayPal, usually charge (though fees with some payment methods, like mobile payments, can actually be higher). Credits is essentially a new virtual currency layered on top of payment services, as the partnership today between Facebook and PayPal illustrates. So the cost to developers is clear. But what about the benefits?

The idea behind Credits – that a platform-level currency backed by the trusted Facebook name should decrease payment friction and increase spending – is very sound. For CrowdStar, Credits is already as profitable as other currencies the company has used, the company tells us. While many developers, especially big social game developers, have made big investments in their own virtual currency systems over the last couple of years, CrowdStar introduced Credits as it has grown in the last months. Executive chairman Peter Relan tells us that his company has had to figure out how to best implement Credits, “but once you get over the hump, it’s great, and just as profitable” as other options — meaning even with Facebook taking a cut.

However, some developers have told us that Credits are bringing in 5% to 10% more revenue than third-party payment options, not enough to offset the 30% cut. When Facebook’s cut is included, one developer said it was seeing revenue decreases of around 20%.

Implementing Credits comes with many considerations for developers. Demand for currencies, for many games, is generated in part through the currency being specific to the app. Users will need to start thinking about game-specific currencies equaling Credits within the game experience. This can create an additional layer of complexity for them to navigate when they’re deciding to make a purchase, as Ngmoco’s Jason Oberfest explains. This means developers active on multiple platforms may have to customize Facebook applications for Credits while using other currencies for the same games elsewhere — a big deal for companies like Ngmoco, which builds games on Facebook and uses Facebook Connect in some games on mobile devices.

It’s Still Early

CrowdStar’s experience is promising, but developers are still wrestling with the long-term results.

As a product, Credits is still under development. A payments resolution feature only went live in January, and many other components of the system are still being worked on, developers say. Facebook’s goal, for now, appears to be to gather more data on how well Credits work, and figure what needs to be improved before it makes bigger decisions.

That’s why Slide’s involvement is especially notable. The company’s executives were PayPal founders. They have experience building a payments service from the ground up. We asked the company why it added Credits, after we saw its implementations. “We wanted to help Facebook build a Credits product that is first-rate,” executive Keith Rabois tells us.

Is “Mandatory” Even an Issue?

If Credits doesn’t end up matching the performance of existing payment options (or at least come close to doing so) for most developers, then we obviously expect the service to roll out much more slowly over the coming year. Let’s look at the other possibilities.

If Facebook somehow makes Credits mandatory as the only virtual currency on the platform, and it doesn’t work as well as third party services currently do for many developers, that would obviously have negative effects on the Platform. Smaller developers would struggle, and maybe sell to larger rivals for lower prices than they’d otherwise be able to command, or look even harder at alternative social platforms, from MySpace to Twitter, Yahoo, Google Buzz, Android, iPhone (if those last two count) and any others that emerge. Still, no developers we spoke to expect other platforms to approach the value of Facebook for their businesses.

Facebook may not have to make Credits mandatory in order to accomplish its goals. If CrowdStar’s results are a good indicator of what is to come, developers will just move to using Credits as their sole currency system by their own will.

Since Facebook first mentioned it was thinking about offering a virtual currency, back in 2007, developers have speculated about the company’s ultimate plans. Last year, Facebook’s efforts to monetize the platform kicked in, with the steady development of Credits as well as developer use of its performance advertising system. But the ongoing speculation is just that, says Dan Levy, the director of the new Facebook payments operations team. Credits is in its very early stages, he tells us, results are looking good so far, and the company is as focused as it’s ever been on improving the developer platform.

For more on the evolving Facebook Platform monetization landscape, check out Inside Virtual Goods: The Future of Social Gaming 2010.

A few minutes ago, Facebook and PayPal formally announced a partnership that brings PayPal in as a first-class payment option for both advertising and Facebook Credits – the core e-commerce services within the Facebook ecosystem today. It’s an important step for both companies, and is a symbolic step in the direction Facebook is taking its business as it relates to payments.

As we wrote in “2009: The Year Facebook’s Platform Monetization Efforts Kicked In“:

It’s somewhat hard to remember now, but during much of the last couple years the tech press was heavily focused Facebook’s plans to build a “PayPal killing” payments service. The idea was basically that Facebook would monetize its platform by owning both the payments layer and the identity layer, eventually spreading its tentacles further throughout the web via Facebook Connect, which would serve as the underlying infrastructure for both an ad network and payments service in the future…

Ultimately, however, Facebook has shown so far that it wants to rely on payments partners to manage deposits, and we think that will continue next year, instead focusing mostly on its currency experience. Why? Basically, currency is a much higher margin business. While we believe identity is vital to payments, and Facebook is in an interesting position to expand its role as a more generic payments platform in the future, we don’t believe Facebook is likely to build up the global operations necessary to build out such a service soon.

Today, by integrating PayPal as a payments option for ads and Credits, Facebook is showing that it’s fine relying on third party payment service providers to handle deposits. While this doesn’t mean Facebook will never build out its own “PayPal competitor,” this move does show that Facebook is prioritizing the growth of dollars flowing into its virtual currency and advertising platforms before building out more of the payments layer itself.

Ultimately, this should definitely lead to smoother payments for Facebook advertisers and Credits buyers, and nice incremental revenue for PayPal. It wouldn’t be surprising to see more partnerships with other third party payment providers over the course of the year.

Of course, more users shifting to Facebook Credits will present challenges to current Facebook Platform payment providers. As we detail in Inside Virtual Goods: The Future of Social Gaming 2010, between the rapid growth of the social gaming market and Facebook’s move to play a more direct role in monetization, it’s certainly going to be an interesting year for the monetization landscape on the Platform.

Note: We’ll be going in depth on the future of the payments ecosystem on the Facebook Platform at Inside Social Apps 2010 on April 20th in San Francisco. Renata Dionello, Chief of Staff to the CEO at eBay and former Director of Consumer Business Development at PayPal, will be speaking.

Facebook is partnering with eBay-owned PayPal, the two companies are announcing today, so that people can buy Facebook advertising and its virtual currency, Credits, using the online payment service.

Although some have speculated that Credits could become a PayPal rival, this partnership suggests that Facebook is going to continue building Credits as a virtual currency, and not as a payments service. The press release today says as much: “The goal of Facebook Credits is to give users a fast and easy way to buy virtual goods on Facebook, including items from the Facebook Gift Shop.” Other ways to buy items include mobile payments, via a partnership with Zong, and direct payments via credit cards.

The statement from Dan Levy, Facebook’s director of payment operations: “We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service. As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible.”

PayPal’s advantage is that it is a thoroughly-developed online payment service, popular abroad and with smaller businesses. It is also a mainstay option with offer walls and other payment interfaces within third-party games and other applications on Facebook.

Facebook had another strong month across Asia and the Middle East, growing by 8.5% in January to reach 73.5 million monthly active users. But as with other parts of the world, many smaller countries that grew first are now maxing out; with large portions of their online populaces on Facebook, there’s no room left to grow.

Meanwhile, big countries in Asia are surging. Even though some have millions of users already, they have a lot of room left to grow. We’re seeing the same trend in Europe and other parts of the world.

Out of the 10 countries in Asia that gained the most users last month, 3 also made the top 10 worldwide: Indonesia, India and The Philippines. All of these countries have 10% or less of the country currently on Facebook. India, where Facebook social gaming leader Zynga is opening up its first international office, has the lowest, with less than a 1% rate.

Of course, there’s the question of what the total opportunity is here for Facebook to grow. In many countries, many people have basically no access to the internet. The catch is that mobile devices are increasingly making it possible for the service to reach more people. In Indonesia, Facebook executive Chamath Palihapitiya recently explained, nearly every user is on Facebook via their phones. Overall, the company says 100 million of its 400 million users access the service via mobile every month. And, to push usage even higher, it is planning to introduce a very simple mobile site, called Zero, that will give people access while using a bare-bones data connection.

For many more details, check out our Global Monitor report. Note that we get our data from Facebook’s advertiser tool. Although it typically shows the same trends as third-party analytics services, this data also tends to lag behind other projections.

Facebook posted a couple of updates on the developer blog today about some new features recently added to the Platform APIs, including new FQL tables and new application privacy settings. Here’s a quick look at the most relevant parts, and what they mean for the developer community.

Per-Post Privacy Settings

Facebook’s new per-post privacy settings have now come to the Platform. Whenever an application prompts a user to publish a stream item, users will now have the ability to set the privacy settings as they would with any other stream story posted through the publisher. Facebook added a privacy parameter to the following three methods today, to compliment the settings found on the stream story prompts:

• stream.publish.
• video.upload.
• photos.createAlbum

It is interesting to note that this is the first time Facebook given applications the authority to pass privacy parameters on behalf of users. Of course, it is not without restrictions. Facebook’s updated privacy policy states, “Any non-default privacy setting must be intentionally chosen by the user. You may not set a custom privacy setting unless the user has proactively specified that they want this non-default setting.” Currently the privacy parameter is optional and any stories published without a privacy parameter specified will be made using the user’s default settings.

Developers are being asked to build the complex interface which customizes privacy themselves, which will likely prevent widespread use of these settings. Developers  may resort to offering a simple checkbox to “Publish to everyone” and omitting the more complicated scenarios which involve multiple API calls. In general, these updates are aimed at third party stream clients such as Seesmic or Digsby, and may not be immediately embraced by smaller developers looking to spread their content to as many users as possible.

FQL Updates

Facebook is adding four new FQL tables, as well as a new column of an already existing table. The new tables being added are:

• privacy: This table returns the user’s privacy settings for a video, note, link, photo, or photo album. See below for more details.
• like: This table returns a list of IDs of the users who like a video, note, link, photo, or photo album.
• developer: This table returns a list of application IDs for your user ID.
• permissions_info: This table returns more descriptive information about an extended permission.

You can now also query whether a user can upload to a given album before asking the API to do so, all via the album FQL table.