Latest Facebook Changes Spark More Privacy Debate  – Recent product changes by Facebook have drawn a range of privacy critics… that phrase is timeless at this point. The company has, in one way or another, tried to be more open with user data in the past few years. Politicians, privacy groups and others have consistently criticized this effort.

But in the news now: Facebook asked all users to match their personal profile interests to publicly accessible Pages, it introduced new ways for third-parties to access some user data without explicit prior user permission, and it allowed developers to store data for longer than 24 hours.

The criticism is coming from US senators and Facebook’s own former chief privacy officer — who is running to be California’s next attorney general – not just from sitting attorney generals and privacy groups. They want Facebook to provide users with more control over how their data is shared, although the exact demand depends on the critic.

Do the headlines matter? CNET’s Caroline McCarthy reports that “we’ve heard from insiders that the nature of the recent concern from D.C. lawmakers has indeed made Facebook nervous. The company knew that they’d be coming into the Beltway’s crosshairs but they were not expecting the immediate force so soon after this month’s F8 conference.”

Politicians and privacy groups have the incentive to use perceived privacy issues to promote their own interests. Sometimes, when they criticize companies like Facebook, this is what they’re really doing. Sometimes they’re also right. One key question is how Facebook users are reacting, and there’s no clear answer on that yet. Another other key question is if this political indignation will translate to new legislation and enforcement efforts around protecting user privacy.

HTML5 Could Be Coming to Facebook Considers HTML5 – The company tells TechCrunch that supporting HTML5, a forthcoming and high-powered web language markup, is something it would consider “for the future.” Rumors began to circulate this week that it had already enabled HTML5 video. But, it turns out the videos were being encoded with an h.264 format, just like they are on an iPad and iPhone.

Amazon’s Kindle to Add Facebook Integration – Amazon’s Kindle 2.5 e-reader is set to include Facebook and Twitter integrations when it’s released in late May. The device is currently in beta, but adds social network sharing to its functions, allowing users to share book passages on Facebook and Twitter.

AOL’s AIM Incorporates Facebook – AOL’s AIM users have surpassed the 1 million mark since the company enabled people to chat with their Facebook friends on the service in February. More than 1 million people have done so via Facebook Connect, about 5% of AIM’s 21 million monthly users.

The service also enabled people to sign into AIM with a Facebook login, a feature that will soon be available on the AIM iPad app, which is the second most popular social network app after Twitterific.

Starbucks Introduces Facebook Payments - Starbucks debuted a Facebook application today allowing customers to manage their Starbucks cards right on Facebook. The app allows users to register/unregister cards, check their balance, reload them, reload a friend’s card as a gift and edit profile information.

LiveWorld Upgrades Moderation Tools – LiveWorld added new moderation tools this week capable of moderating hundreds of Facebook posts every hour to keep spam and objectionable content from Facebook Pages. The company already moderates more than 2 million posts a month and with the company’s new moderation solution suite, Page administrators can work more quickly than by using just Facebook alone; see our past coverage for more.

Arizona Catches Fire on Facebook – After the passage of a controversial immigration law this week Facebook has been used once again for political ends as people from both sides of the debate rallied on the service. Governor Jan Brewer took to her official Page, while others launched Pages to boycott Arizona, support Arizona, support the state’s tourism industry, etc. For example, the group 1 MILLION Strong AGAINST the Arizona Immigration Law SB1070 has about 995,000 members and a Page called Stand With Arizona (and Against Illegal Immigration) has 61,000 fans; both were created shortly after the law passed last Friday.

Cost-per-impression (CPM) advertisers on Facebook have recently been told by the company that they may see fewer click-throughs on their ads due to pending changes in its performance advertising system.

In a letter sent out to advertisers on the system earlier today, Facebook also said that advertisers bidding for ad inventory on the site may soon see more clicks. We asked for more details. The company isn’t saying what the specific changes are, only that factors like ad placement on the site will remain unaffected.

CPM advertisers on Facebook bid for campaigns using a specific dollar amount; they set a budget for an ad, and money is taken out of it every time the ad is shown. The other option on Facebook is Cost Per Click (CPC). Advertisers are only charged when users click on their ads.

In general, CPM performance advertising can be less expensive because it is not as directly tied to monetizable user behavior. So, CPM advertisers on Facebook who have quietly and inexpensively optimized their ad creative for clicks appear to be the ones affected by this change.

The letter, via All Facebook.

Upcoming system change:

As you know, we continuously work to make our ads system more accurate in order to further improve the effectiveness of your advertising campaigns. Among other ongoing improvements, we are refining our ads delivery system to better reflect the goals of our advertisers. This change will take place over the next few weeks and, assuming current bids remain unchanged, will mean that:

• CPC advertisers (advertisers who have chosen to bid “cost-per-click”) may receive more clicks.
• CPM advertisers (advertisers who have chosen to bid “cost per thousand impressions”) will continue to receive impressions but may receive less clicks.

Do I need to do anything?

As a CPM advertiser, you are indicating to our system that it’s more important that your ad is seen by your audience rather than clicked i.e. you have chosen to pay for impressions, not clicks. If your main objective is to increase awareness of your business with an ad impression, there is no need for action. However, if your most important objective is to drive clicks on your ads, you should change your bids from CPM to CPC.

For companies interested in learning how to take advantage of Facebook’s performance advertising system, be sure to check out our Facebook Marketing Bible.

Buried in Facebook’s many announcements and changes at its f8 developer conference last week was a couple slight modifications to its mobile documentation. The company added support for an open standard that allows secure data-sharing, called OAuth, and it changed some phrasing around the iPhone SDK.

OAuth, or Open Authorization, lets users share private information like photos and friend lists from one site to another without having to share their username and passwords. Facebook implemented the 2.0 version of the standard together its Open Graph API and social plugins launches, so apps can securely identify Facebook users and request their permission to access specific types of personal data. The company had been pointing to the OAuth move for months.

As the mobile documentation now says, OAuth 2.0 is also live for mobile developers looking to use Facebook in their mobile web sites and applications.

The other update in the docs is due to the fact that Facebook is also getting rid of the “Connect” brand to avoid market confusion. It has renamed “Connect for iPhone SDK” to the “iPhone SDK.”

Musical artists are now brands. Declining physical album sales have pushed artists and their teams to think more holistically. Smart musicians are moving away from making a quick buck off of piece-meal Mp3 sales, instead looking to foster institutional allegiance from their fans, facilitating the sales of higher-priced items like concert tickets, apparel, keepsake-laden box sets and even super-premium personal experiences with the artists themselves.

Facebook Pages have the potential to deliver this deep connection with fans because they can provide a seamless on-site experience for Facebook users. They allow people to publicly come together to share their feelings for the things they love. Below, we detail how musicians are using a key part of Pages to promote themselves: the horizontal navigation tabs for third-party applications and other features at the top of each Page.

But first we should note that Pages will continue to grow in value along with Facebook’s own user base and other products. True, the company just launched the Open Graph API and social plugins, designed as ways to take many features you’ll see on the site to everywhere else on the web. Pages are a key part of this plan, though. They’re public, so fans can find them through searches on Facebook or through web search engine results. And because Pages are hosted on Facebook, they also create a seamless experience for users — Pages can publish updates to fans’ news feeds, for example, and get people to click through to the Page instead of having to go to a different site off of Facebook. The value of Pages is analogous to how users enjoy using social games and other apps on Facebook even though they can access many of the same features through developers’ implementations of Facebook Connect (now the Open Graph) on other sites.

Facebook may have launched the Open Graph last week, but it doubled down on the value of Pages when it introduced Community Pages earlier this month — a new type of Page that nobody owns, that doesn’t include some featurs, like publishing to fans’ streams. It followed up on this move by requiring all users to designate their existing interests, education history, and other information from their personal profiles as either Community Pages or as Official Pages. This comes home to musicians in a big way as lots of users who had written in the names of their favorite bands in their profiles suddenly were asked to “like” the official Pages for the bands.

We’re focusing on tabs on Pages, here, because they are a key way that Page owners can provide a customized and in-depth experience for users. We’ll look at full-service applications currently being used by musicians, such as  iLike’s “Music”, as well aswhat discussion board threads get the most posts, tabs with publishing capabilities and other developments in Pages.

Music Streaming

iLike‘s “Music” still dominates the music streaming Facebook app market, despite being bought by MySpace in August 2009, and weathering a drop to 11,854,238 monthly active users (artists and listeners) from 12,400,000 since we profiled the app at the beginning of the March. Allowing artists to display a music player, tour dates, bulletins, links, tag clouds, Twitter updates, comments and more, it has been installed on almost every one of the Top 200 musician Pages according to PageData.

Competitor RootMusic‘s BandPage app, which provides a suite of applets for a variety of musician Page needs, has only 6,046 monthly active users, though all of these are artists. Jason Mraz’s BandPage tab includes a music player powered by SoundCloud alongside his Twitter updates. Involver‘s premium service offers custom music players as well as free Page tabs that display Twitter and RSS feeds. Their “Music” tab for Alicia Keys displays a music player, purchase links and a comment input with an option to publish comments to a user’s feed. However, in a testament to it’s ubiquity, both Jason Mraz and Alicia Keys also have iLike’s app installed. With no competitor offering the same diversity and quality of services for free, iLike is set to maintain its supremacy for the foreseeable future.

Email / Mobile List Sign-Ups

By collecting additional contact information from their fans through a sign-up form, musicians can augment their Facebook campaigns with mass e-mails and mobile promotions. Mozes, a leading service providing mobile engagement tools such as mass promotional text messaging, powers the mobile sign-up of many leading musician pages such as Rihanna and Kings of Leon. Email sign-ups are predominantly handled through an integration of a widget, often developed by an artist’s record label. Jack Johnson, in a tab powered by Oniracom, baits users with a free mp3 but then requires an email address to which to send the file.

Tabs which offer downloads, especially of rare b-sides or live recordings, in exchange for contact information are a great choice for musicians because they entice both hardcore and new listeners with something exclusive, and help establish the artist on the fan’s hard drive, not just their web browser.

Events

When fans RSVP to Page hosted events, the action does not bring up the opt in / opt out publishing option, instead quietly posting a link to the event to the fan’s feed. This has led many top musicians including Coldplay and Shakira to create separate Facebook events for each of their concerts to drum up awareness and gain exposure for their Pages. Some artists we examined like Disney Channel starlet Selena Gomez maximize the potential of the publishing functionality of events by also listing their film premiers, television appearances, album release dates, and any other event with a defined start time. As users are accustomed to RSVP’ing, receiving an average of event 3 invitations a month, and as Facebook becomes a ubiquitous element of event promotion, expect musician Pages to increasingly rely on events to bring in new fans.

Live Chat

Live chats allow musicians to webcast video of themselves responding to questions which fans pose through a text-based chat room interface. They provide vivid, intimate pseudo face-to-face interaction with fans that is cheap in terms of dollars and an artist’s time. Ustream‘s free and powerful Facebook application is the only live chat platform we found on PageData’s chart of top musician Pages. Ustream tabs feature a banner prompting users to “Click here to become a fan and RSVP for the next webcast!”, and a comment box which fans use to talk to the artists but which also publishes their comments to their feed.

Miley Cyrus’ Page hosts a Ustream tab branded around her new film, which it runs a trailer for when Miley isn’t actively chatting. Raising their profile through newsworthy broadcasts like Lil Wayne saying goodbye to fans before going to jail, and their release of a premium desktop client, Ustream is poised to dramatically increase their prominence in the engagement tab field.

Merchandise Stores

As the end goal of all of these engagement tools is sell high-margin items, artists are starting to host or at least initiate the purchase experience on Facebook. The “Shop Marley” tab on Bob Marley’s Page offers affiliate links to iTunes and Amazon for his music, as well as links to  of his numerous musically-inclined children.

Pink Floyd’s “Store” tab, powered by Live Nation’s Music Today, directs users who click on a “Dark Side of the Moon Shower Curtain” straight from Facebook to an online shopping cart, one-upping Facebook stores like country artist Taylor Swift’s, which only links products to the homepage of her website’s store.

Discussions Boards

By hosting a forum where users can interact with each other and voice their opinions, Pages like that of Britney Spears and Lady Gaga draw fans back by providing a sense of community in addition to more formal content. While enabling Facebook’s native “Discussions” app is simple, getting enticing threads started can be difficult. Some threads we came across that routinely had more than one thousand replies and could be replicated for any musician’s discussion tab include “game” threads where users choose which of two songs they like better, name the title of a song based on a snippet of lyrics, or unscramble a jumbled song title and then leave a new question for the next poster; “favorite” threads where users cite their favorite song, lyric or band member, and “ID” threads which ask where fans from or which fan is the oldest/youngest.

The Jonas Brothers have by far the most active message board with over 181,734 threads, (compared to Lady Gaga’s 3325 or Justin Bieber’s 16,870) in part because their fan community has adopted writing fan fiction about the group. Musicians and their community managers should be weary of fraudulent threads which claim to contain personal contact information for the artists like this thread we found that claims to have Justin Bieber’s phone number, as they can leave honest fans feeling burned.

Publishing Tabs and Conclusion

The key to increasing fan numbers are tabs which produce stories so compelling that fans want to publish the content to their feeds. By determining what resonates with their core fan base, be it a humorous picture, a challenge to play a game, or an opportunity to win a contest, Pages can turn supporters into evangelists.

The significant influence of these publishing tabs is evident by the inclusion of some lesser known artists in PageData’s Top Musicians chart. The Beatles have 2,455,609 fans despite an almost tab-less Page, but David Guetta, a dance music producer who only recently broke into the mainstream has racked up 2,550,103 fans for his Page. His innovative tab called “Your Memories” by Lucid Online bundles a music player for Guetta’s new single “Memories” with a comment box which asks “What crazy s**t did you do last night?”. When a user’s response is posted to the tab, they are asked to publish the comment plus a link to Guetta’s Page to their feed. By riffing on the hedonistic nature of his fan base, Guetta has used this publishing tab to gain 223,782 new fans in the last month, pushing him ahead of superstars like Justin Timberlake and U2.

As tabs like music players and sign-ups become standard, musicians who can consistently come up with creative new promotional tabs with publishing capabilities like Guetta’s will be those claiming more fans than their popularity warrants.

This week’s list of emerging Facebook apps still under a million monthly users is led off by Battle Punks, a game that’s unusual for its 3D graphics. But we’ll save talking about the games for our sister blog Inside Social Games. There’s actually a far more interesting app beneath Punks: f8 Live, which was created solely for last week’s f8 developer conference.

We were at f8, and the event was definitely packed — but the crowd was still only a couple thousand people. The online attendance, though, appears to have been an order of magnitude larger, and users have kept streaming in for information about the conference, a week after it ended.

Is the app important? Of course not, but it does tell us something: that Facebook itself has become a topic of popular conversation. Developer conferences would put most people to sleep, but two hundred thousand seem to have felt compelled to visit the app alone to check this one out.

Anyway, here’s the full AppData list of 20 growing apps:

	Name	MAU	Gain	Gain, %
1.	Battle Punks	547,576	+341,034	+165.12
2.	f8 Live	196,417	+187,309	+2,056.53
3.	Write In Pictures	561,648	+180,869	+47.50
4.	天書奇談 2.0	571,875	+148,616	+35.11
5.	Dailymotion Videos	533,307	+147,748	+38.32
6.	Name Analyzer	164,229	+137,884	+523.38
7.	My Tribe	530,249	+112,698	+26.99
8.	( Fupa Games ) – Arcade Blitz	216,178	+105,655	+95.60
9.	¡Teclas Machucadas!	431,658	+100,045	+30.17
10.	Pet Forest Online	340,316	+94,661	+38.53
11.	Do you really know me?	607,016	+94,169	+18.36
12.	Funfari	266,804	+92,052	+52.68
13.	Friend of the Day!	537,117	+89,000	+19.86
14.	Love Test 2010	166,850	+87,583	+110.49
15.	Dumbville	180,362	+86,331	+91.81
16.	NanoStar Siege	178,808	+84,857	+90.32
17.	Evony	411,056	+81,174	+24.61
18.	Lords Online	265,298	+76,965	+40.87
19.	TinierMe	351,984	+76,029	+27.55
20.	Football Mania	192,763	+74,544	+63.06

Write In Pictures is an app for writing on friends’ walls in colorful, illustrated letters. We’re not sure, but it seems to be related to Name Analyzer, at number six, which breaks down your name into a flowery anagram.

天書奇 談2.0 is a game based on Chinese mythology although, oddly, it isn’t categorized as a game. Beneath it is Dailymotion Videos, based on the popular French website, which has been attracting a mainly European user base to its video sharing service.

Skipping down to number 13, Friend of the Day!, like Write In Pictures, doesn’t list a developer but appears to be related to another app: Lover of the Day, which is headed toward two million MAU. Both apps pick out a random friend who is dubbed, respectively, your friend or lover of the day. Simple, but apparently effective.

A year and a half after graduating from Facebook’s second fbFund competition, GroupCard has been acquired by pre-paid card provider InComm. The latter company stocks cards in retail stores across the US and other countries, allowing users to buy the cards in order to obtain virtual currency in games, or access to other digital goods.

GroupCard was founded as a collaborative greeting card service, and afterward expanded to selling gift cards, including a deal with Apple to sell iTunes cards on Facebook. InComm’s interest in the startup is focused on that social gifting business, according to TechCrunch, which first reported the deal.

InComm appears to be one of those rare non-digital companies that gets the online world. Aside from jumping into the Facebook gift card business, the company’s VP of product development sat on our payments panel at the Inside Social Apps conference last week, where he likened selling cards at major retail locations to game mechanics. InComm also recently bought Zeevex, which sells virtual currency tokens through retail channels.

As for GroupCard, we ran an interview with CEO John Anderson after its graduation from fbFund, in which they talked about “spinning up the flywheel” to create momentum for the company. It would appear that the strategy was successful, although the degree is uncertain — the acquisition price wasn’t disclosed.

Facebook announced several big developments last week at the f8 conference in San Francisco, California and the Inside Network was there to bring you breaking and in-depth coverage of the event.

Check out our detailed analysis of the Open Graph’s new social plugins and API, below, along with news from conference sessions and related stories. For those who followed during the day, note that we’ve since been providing follow-up coverage on specific topics that came out of the conference, like our story on how to administer off-Facebook pages via the API from earlier today.

But first, an update to from Facebook. The plugins have made it to more than 50,000 websites in the week since they were launched, the company announced in a blog post yesterday.

Facebook launched the plugins with 75 partners — big names like CNN and Levi’s – but the other 50,000 sites have implemented the changes on their own. Company founder Mark Zuckerberg predicted the Like button plugin, in particular, could get a billion impressions in the first 24 hours after launch. It did.

General Coverage and News

• Live-Blogging Facebook’s f8 Developer Conference: The Open Graph Launches
• Facebook Removing 24 Hour Caching Policy on User Data for Developers
• Facebook Streamlines User Data Permissions Into a Single Dialog Box
• Facebook Eliminates Connect Brand Due to Market Confusion

The Open Graph

• Facebook Announces Open Graph API and 5 New Social Plugins at f8
• Facebook Recommendations Plugin to Make Website Content Socially Relevant
• New Facebook Activity Stream Plugin Brings Filtered Stream to Any Website
• With the Open Graph Protocol, Any URL Can Be Treated Just Like a Facebook Page
• Facebook’s “Kitchen Sink” Social Toolbar Not Out Yet, But Coming Soon
• Facebook Lets Developers Search Publicly Available Graph API Data
• New Details of Facebook’s Location Plans Appear in Open Graph Protocol Docs
• How to Programmatically Administer Off-Facebook Pages with the Open Graph API
• Developers Experiment with New Search, Aggregation Products Based on Facebook Data
• A Look At Facebook’s Three Instant Personalization Partners: Yelp, Pandora, Docs.com

Conference Sessions

• Facebook Announces “App2User” Liquidity Program for Merchants to Convert Rewards Points into Credits
• Facebook: We Want to Integrate 200 Credits Payment Options Worldwide
• Zuckerberg: “There’s Just Going to be One Currency that People Use” on Facebook Apps
• Facebook Overhauls Page and App Insights, Adds Domain Analytics Features and an API
• Facebook Searching For Ways to Break Into Mobile Apps
• Facebook f8 Panel: Where the iPhone is Lacking, Android May Succeed

Facebook may have gotten its start on college campuses, but the service has moved away to focus on building a generally useful product for the general public. The company got rid of features like Courses (which let you list your class course schedule) years ago in favor of letting developers build their own, for example. A few companies have been working on tools for colleges and universities, but a new competitor has gone live on Facebook’s platform: CampusBuddy.

Similar to competitors, it provides an application that can be included as a tab in a college or university’s Page, that comes with education-focused features.

The market here is still open. For whatever reason, universities have struggled to rack up fans and provide meaningful services on Facebook. According to our metrics tool PageData, the university with the largest Facebook fan base is Texas A&M, with about 174,000 fans — not a whole lot, considering that the school says annual enrollment is 48,000 students every year on its web site.

CampusBuddy has launched a free Facebook application aiming to give universities another tool to tap social networks for current students. The company already creates communities for students on its own web site, and lets users sign in with their Facebook identities; the Facebook app that launched last week essentially recreates the web site’s interface in a tab on a university’s Page. So far, our metrics tool AppData shows that the app has about 67,300 monthly active users to date, although it’s not clear how those users are distributed across Pages and the home site.

Universities like USC, UCLA, UC-Berkeley, Ohio State, Texas A&M and the University of Texas have signed up for the web site version of CampusBuddy. It allows students to set up a profile and interact with other users/students, find people in specific classes and majors, read user reviews of colleges and professors, see class and grade distributions, as well as other school data such as admissions and school statistics.

USC was the inaugural school to include CampusBuddy’s tab on its official Facebook Page, which amounts to a re-creation of the web site’s interface on the tab but allows users to search for CampusBuddy users from elementary, junior and high schools. The Facebook app includes ads for CampusBuddy’s other services, such as: paying for grade distributions, scholarship contests and buying textbooks (an external site).

Previously we wrote about another university-focused company, Inigral, which developed an education-themed app called Schools designed as a closed-system where potential or new students could get to know their universities better. Features included information and photos of clubs, groups, activities, dorms, majors, departments and lots of places for users to share information. In December, Schools had about 6,000 monthly active users and about a dozen universities had signed up.

Although universities have a lot to gain by creating a strong Facebook presence for current students and alumni, CampusBuddy’s tab provides basic interaction that its probably not useful for anyone but freshmen or people new to the school since admission, housing and fraternity/sorority stats are things acclimated students are likely to know. Features include a way for users to post questions in categories like housing or nightlife, post comments, and see what other students have registered for an account with CampusBuddy and also search majors/departments, professors and courses.

While there’s no doubt universities are scrambling for ways to make Facebook work for them — not only would it help them save money on alumni recruitment but also with fundraising — companies like CampusBuddy don’t appear to have solved that problem. There’s really nothing new with this app; it creates venues for users to add content, not any new content, but that user-generated content could be added to Facebook with the network’s current interface.

Another element is a type of game awarding users Honor Points for inviting friends, completing reviews or answering questions for “premium content,” but it isn’t promoted heavily. CampusBuddy users can use these points to:  gain recognition by attaching Honors Stars to their profiles, get “priority access” to new features and resources, be the first to see new official grade distributions before their release to everyone else, and access to “elite features” like lists of the easiest graded classes and best reviewed professors. Users can only receive points for inviting friends through the company’s web site.

In many ways CampusBuddy, like Inigral before it, have built features similar to Facebook’s own interface and not really added anything groundbreaking in terms of interactivity. Furthermore, while such programs have attracted thousands of users, the potential student-alumni pools amount to millions, many of whom have not come out in force for their alma maters on Facebook.

Another conundrum facing universities seeking to build communities on Facebook is the issue of privacy. Facebook has reset privacy control several times this year alone while universities have an interest in creating more closed communities, especially when it comes to insecure new students. Inigral’s interface was partly-public and partly-private, whereas CampusBuddy seems to be completely open, as those with no affiliation to USC can view and post information. This setup would make sense if schools were trying to build larger communities around their sports teams, the University of Texas for example has a huge football following even among people not affiliated with the institution, but CampusBuddy doesn’t state that as its goal.

As companies like CampusBuddy and Inigral continue to develop solutions for universities on Facebook it’s likely we’ll see some more configuring around Facebook’s privacy issues and more innovative ways for Facebook users to interact with the schools’ own web sites. In the interim USC’s running total of 35,000 students (not to mention alumni) is represented by 1,430 on the CampusBuddy Facebook app.

Update: CampusBuddy chief executive Mike Moradian tells us that the company has “boostrapped”its way to more than 260,000 monthly active users on Facebook by January (of a total of more than 700,000) with no outside funding.Although CampusBuddy just launched its tab feature on Facebook,Moradian tells us more products are in the works.

LivingSocial raised another $14 million this week, fresh after a round of $25 million fundraising last month, and a spokeswoman tells us the infusion will help it to continue to expand its Deals service — currently a primary revenue source for the company. Deals has been made popular in a big way by Facebook users. Through implementing the new Facebook plugins, the company hopes to grow even more.

LivingSocial Deals is a free service launched last summer inviting people to buy deals on restaurants, hotels, sporting events and spas in their areas via Facebook Connect, an iPhone app or their web site. Here’s how it works: Elect to buy a deal in your area and share it. If three of your friends buy it, too, you get one free. Then, if a critical mass of people in your area purchase the deal, all participants get a coupon to redeem the discount. What Deals offers users is a social experience of hunting for savings — you can not only get a great deal on a spa but you can do it with your friends — and since you can use Facebook Connect, you can integrate your cost cutting with your existing network of friends.

The service is available in 18 cities, including New York City, San Francisco, Austin, Seattle and Atlanta and Deals recently launched in Portland, Orange County, Charlotte and Philadelphia.

Deals is currently LivingSocial’s big moneymaker, company spokesperson Korina Buhler tells us, which is why the bulk of this capital is set to help launch the service in more cities in the U.S. “Everyday we get requests from users via Twitter, Facebook and email to bring our Deals program to their area, so, with this funding we are able to do that,” she tells us.

Facebook figures prominently in Deals, as many users are channeled from LivingSocial’s apps to Deals, allowing the company to build the customer base very quickly, Buhler explains. About half of Deals customers are logging in using their Facebook identity when they make a purchase — and that number has been growing.

The company’s new LivingSocial 365 was also recently outfitted to tap into the Open Graph API. LivingSocial 365 is a service that suggests interesting things for users to do in their city — integrated into Deals, so when like or comment on these activities they appear in the users’ news feed for their network to see.

This latest $14 million in funding comes from a Series C round of funding led by Lightspeed Venture Partners, in addition to U.S. Venture Partners, Grotech Ventures and Steve Case’s Revolution, LLC, money that will aid LivingSocial in expanding deals to dozens more U.S. cities this year. The back-to-back rounds of funding have happened as a competitor, Groupon, just raised a massive $135 million round of funding — the group coupon business has obviously gotten hot lately. For more on the market, check out this post by Lightspeed’s Jeremy Liew.

With the Open Graph protocol that Facebook announced at last week’s f8 conference, any URL can now be treated just like a Facebook Page. After you mark up your site with the right metadata and encourage users to start Liking your site, you can then publish updates to their Facebook News Feed just like as if your website were an on-Facebook.com Page.

But a good question is: exactly how does a website publish to the Facebook News Feed when it doesn’t exist as a Facebook Page in the first place? Well, the answer is two-fold:

1) First, Facebook said last week that all websites that mark themselves up with the right Open Graph metadata and <fb:admins> tag will actually get an admin interface just like that of Facebook Pages, from which they can publish status updates to fans. At that point, you’d simply have to head over to Facebook to publish status updates.

2) Second, Facebook has also made available a way to associate your Open Graph-enabled site with a Facebook application. By adding the following line to your pages, Facebook will connect your site to an application ID:

<meta property="fb:app_id" content="1234567"/>

Then you’ll need to get the Facebook ID for your page from its canonical URL:

curl 'https://graph.facebook.com/?ids=http://www.imdb.com/title/tt0117500/'

Once you have that ID for your URL, you can publish to users’ streams programmatically using the stream.publish API (though Facebook says a new method is coming “very shortly”).

Ultimately, Facebook hopes that by getting a lot of sites to adopt the Open Graph protocol, it can drive more engagement for publishers by getting them to adopt the News Feed as a more important form of user communication. If it succeeds, Facebook would then become an even more important layer of communications infrastructure as it serves more sites around the web in the same way that it has traditionally just served “Pages” on Facebook.com.