Over the last couple days, some Page administrators have been noticing incorrect counts for the number of people who like their Facebook Page. Facebook has confirmed that this is a bug, and is working to fix it today.

According to a Facebook spokesperson, “There was a bug that caused an accounting error for the number of people who like a Page. We are working hard to fix this bug and restore the counts as quickly as possible. No fans or data was lost, and news feed distribution has not been affected.”

We’ll let you know as Facebook makes progress on fixing the issue.

Social game developer CrowdStar’s new city-builder, Hello City, is getting a special promotion today from Facebook, that features Credits. Users who go to their Games Dashboard will see a gray box at the top of the page, that says “Earn 5 free Facebook Credits.”

If the user clicks “Continue” they’ll get the option to install the game, and receive the virtual currency. Facebook is providing an advertising offer for Credits — and for CrowdStar — through incentivizing users to play. Once players get the currency, they’ll be able to buy virtual goods within Hello City (or any other game that uses Credits), and CrowdStar will be paid its 70% portion by Facebook.

It’s the latest move by Facebook to try to promote its virtual currency, even as some developers have resisted it. They’ve complained that between the 30% fee, and non-explicit costs like breakage and lack of control, they are losing a significant amount of revenue that they had previously expected. Tests like this show how Facebook is trying to get more users comfortable using and buying Credits — the company believes it can help offset the cost to developers by bringing in new paying users. Credits, Facebook has previously said, is going to in some form be the only virtual currency on its site.

We asked Facebook about the promotion:

As part of our ongoing efforts to educate people about Facebook Credits, we’re working with CrowdStar to promote Hello City, a city building simulation game that makes it easy to get started with Credits quickly. Through recent updates, such as making the Credits balance more prominent on the right side of application pages, and marketing and seeding programs, our intent is to acquaint people with Credits and create more opportunities for game developers.

CrowdStar, Facebook’s designated Credits testing partner, has previously participated in a number of other Credits promotions. When its Happy Island simulation game launched in December, it was the first of any Facebook app from a major developer to exclusively feature Credits. Facebook has more recently advertised CrowdStar and Credits in sponsored ad inventory elsewhere on its site, and featured CrowdStar games (and, again, Credits) on the right-hand column of the games dashboard.

[Editor's Note: Facebook has been experimenting with Credits, its in-house virtual currency, for years. But now the company is looking at ways to get all developers on its platform using Credits (while it takes a 30% fee for the service). And given Facebook's ambitions for the currency already, many people in the industry are wondering what Credits might become in the future. A "PayPal killer?" In other words, a payment wallet that can be used for any transaction across the web, if not in physical locations?  That description makes for easy headlines, and there are reasons it could happen, as panelists at our Inside Social Apps looked at in April.

The debate has emerged on question-and-answer service Quora, after a user posed the question: Can Facebook Credits replace PayPal one day, why or why not? Former PayPal (and Facebook) leaders have weighed in on both sides. We're republishing David Sacks' response, but you should read what Lee Hower, Yishan Wong, Eric Jackson and other Quora users have to say, as well.]

I don’t think so. Here’s why:

PayPal is the low-cost provider in the industry. The main reason is that roughly half of its payments are funded from a PayPal balance or bank account instead of a credit card, virtually eliminating funding costs for those transactions. Funding costs (because of credit card interchange fees) are by far the biggest portion of the expense of processing a payment.

This funding mix was extremely difficult to achieve. It required us to drive a huge percentage of users to (1) add and verify their bank account so it could be used as a funding source, and (2) keep money in their PayPal account so it could be recycled within the system. A bank account was only verified by transferring to it two small payments (less than $1) that together constituted a 4-digit PIN. Waiting for the PIN took several days so this was a multi-step/multi-day process. It still amazes me that so many users completed it; however, we systematically created benefits for becoming “PayPal Verified”.

PayPal also incentivized balances through money-market interest rates and a PayPal debit card that made the PayPal account liquid at any ATM. Finally, anyone could receive payments through PayPal, which meant that ordinary buyers could accumulate a balance; although P2P payments seem easy, they are actually extremely risky and require special fraud detection systems. All of these features would be extremely difficult for Facebook to replicate; even if they did, it’s not clear users would have the same incentive to verify their accounts.

As a result, Facebook will have higher funding costs than PayPal, which will prevent it from challenging PayPal on the basis of price. For many companies, like social gaming sites and apps on Facebook’s platform, this won’t matter. They will gladly pay more for the additional conversion that Facebook payments will generate. This is because their margin on each incremental transaction is 100%. On the other hand, price-sensitive e-commerce sites with thin margins will want to use the cheapest payment provider. If your margin is only 10%, for example, then saving a couple of points on payment processing increases your profits by 20%.

Here’s how I see the market breaking down: Facebook will charge a premium fee for delivering additional convenience, distribution, and conversion to merchants. This will win over the virtual goods market. But merchants with thin margins (e.g. sellers of physical goods) will prefer to stick with the low-cost leader for the majority of their payments.

David Sacks was the original Chief Operating Officer and product leader of PayPal. He is now the founder/CEO of Yammer, a leader in enterprise microblogging.

As Facebook races towards 500 million users and $1 billion in revenue this year, the company has begun to hire increasingly more employees to fill the offices the company has begun to open in places like Austin, Texas and India, among others. We thought it would be useful to look at who was hired at the company in the past week or so.

Here’s a list we complied using data from LinkedIn, in alphabetical order people joining the Facebook team:

• Jimena Almendares: An MBA intern at Facebook; formerly worked as a product marketing intern at Eventbrite, senior strategy consultant at Capgemini Consulting Ernst & Young, and was a partner at JV Especialistas en Comercio Internacional.
• Audrey Bonneville: Marketing communications manager at Facebook, formerly worked as a Marcom & CRM manager at Microsoft, CRM Manager at MSN Finance and was responsible for marketing at Fidélisation at Maximiles.
• Charles Dowd: Manager of platform operations – EMEA at Facebook. Co-founder of ticket truck, worked as an adviser at Edenbee Limited and was an executive at Travelonomy.
• Justin Edmund: Product designer intern at Facebook, formerly a computer consultant at Carnegie Mellon University.
• Ezwan Aizat Abdullah Faiz: Software engineer at Facebook. Was a head developer at UreakaLabs, previously worked as a software engineer for QuebConnect and YouthSays.
• Alberto Fittarelli: Fraud specialist at Facebook, formerly of PayPal as: a risk management analyst in the AUP department, a compliance analyst and a project team member of “Agent Insight.”
• Karen Gaeta: HRIS coordinator, formerly worked as a staffing representative at Brocade, an HRIS analyst at Foundry Networks and a senior human resources administrator at Credence Systems.
• Scott Hartley: Facebook summer associate who worked as a researcher at Harvard Law School, research assistant at the United Nations and as a product specialist at Google.
• Dhiraj Kumar: Strategist of global customer marketing, previously vice president of client service and telecom practice at The Nielsen Company, senior consultant at Deloitte Consulting and a product development manager at UTSarcom.
• Trace Przybylowicz: Account manager; worked at Saatchi & Saatchi as an account supervisor and account executive, and also as an account executive at Campbell-Ewald.
• Fawad Rehoie: A network engineer who previously held a similar position at Yahoo! Search Marketing (in a senior position), Yahoo! and Exodous Communications.
• Andrew Vandever: Site reliability operations technician who previously he worked as a technical trainer at One Course Source, an information systems technician at Fry’s Electronics and a technical advisor at Action Impact Missions.
• Eric Wahlgren: Customer content manager, previously an assistant managing editor at AOL, managing editor at The Journal of Life Sciences an an editor at Red Herring.

Hong Kong-based SillyCube has launched a new photo-editing Facebook application called CutePhoto. Even though it’s in an older and crowded genre, it manages to stand out for its ease of use and color.

From slimmed down, Photoshop’esque tools, to any number of brilliantly saturated graphics, SillyCube provides its users with a wide assortment of tools to turn their photographs into something quirky, epic, bizarre, or cute.

To be fair, such applications – be they on Facebook or around the web – that allow users to spice up their photos in one way or another have existed for some time. Typically speaking, they are exceedingly simple renditions of the robust and more complex Adobe products, often ported-over versions of simple web-based photo editors. CutePhoto does a pretty good job at letting users get creative. Unfortunately, at the same time, it does still suffer from a handful of obnoxious usability issues.

When starting up the app, users can choose to upload a photo from their computer, use a URL from the web, take a Facebook photo from a friend, or just start with the set of four default images CutePhoto gives you. Upon entering the editor window, it is possible to zoom and move the selected image as you see fit, as well as adjust its brightness and sharpness. Oddly enough, there appears to be no rotate tool.

Anyways, once you have the image the size and orientation you want, you can begin doctoring it in any number of ways. The most basic of these are 18 or so frames that consist of environments ranging from snow to jungles and from wrapping paper to music notes. It’s all well and good, but that’s hardly the interesting part of the app.

There are actually six categories of random graphics that can be used to decorate an image. Selections include plants, animals, party items, environmental stuff, hats, and various symbols. Unfortunately, the graphics themselves cannot be altered (i.e. color), but they can still be scaled and rotated. They’ll even crop automatically if placed partially outside a frame. Moreover, there is a large enough selection that any modification beyond this is not really needed. Sadly, while this is all well and good, but the noted tools are the conduit for some major usability complaints.

As it stands, once a decoration is chosen, it sticks to your mouse pointer until you plant it down. Once you have put it down, while holding the left mouse button, you can rotate or scale the object (it is worth noting that rotation and scale are only done based on the center point of a graphic) by moving the mouse up and down or left and right respectively. It’s a little awkward, to say the least, but then again, that might be due to years of using Photoshop. That said, that’s not the big issue: The problem, is no matter where we look, we can’t seem to find a means to move, or re-alter a graphic that’s been added to the photo.

Currently, the only thing that is possible, is to click an eraser tool, delete the graphic, and try again until you get it the way you want. In many cases, this will not be an enormous issue for users, but when we tried to align our mighty sword with the paw of Polumbus, the Polar Bear King, it took a few, annoying, tries.

Beyond this issues, everything else seems to work out alright. Users can use a pen tool, with any number of simple brush sizes and an entire color wheel of hues to choose from, giving them unlimited potential. However, and most importantly, to anyone who has used an editor of any sort, CutePhoto retains the almighty undo button.

Once a photo has been completed, users then have the option of either saving it to their computer or uploading it to their gallery within the app. From here, they can save it to an album, set it as a profile picture, post on their own or a friend’s wall, or even put it up publicly within CutePhoto’s Photo Wall.

As a matter of fact, despite being new, the Photo Wall already has any number of very cute and many amusing altered images for people to look at. Moreover, anyone is able to take a peek and “Like” them. Granted, it’s just a default Facebook feature, but it is nice to see how many people like your creations.

Despite some usability issues, CutePhoto is still a pretty cool Facebook app. It has enough variety to allow for a good amount of creativity, and is simple enough to allow the majority of users to create decent quality stuff without drastically limiting the overall possibilities. With any luck, some of the issues of selecting placed graphics and the awkward rotation and scaling mechanics will get cleaned up, but all in all, CutePhoto is an application with few complaints.

Only four non-game apps grace this week’s list of emerging Facebook apps, defined as those still under a million monthly active users. As is usually the case, that’s not because of a total lack of creative apps — several interesting ones are listed in lower rankings — but because this is a particularly good week for new games.

Here’s the AppData list of 20 apps:

	Name	MAU	Gain	Gain, %
1.	EA SPORTS FIFA Superstars	703,339	+648,046	+1,172.02
2.	The Hardest Game of the World	312,682	+287,601	+1,146.69
3.	Crazy Cow Music Quiz	592,367	+282,532	+91.19
4.	Fashion World	246,580	+245,547	+23,770.28
5.	Gossip	262,204	+242,740	+1,247.12
6.	Baking Life	811,925	+230,582	+39.66
7.	Mahjong	504,143	+196,944	+64.11
8.	- Clicks Racer Challenge	292,827	+157,271	+116.02
9.	Temple of Mahjong 2	466,699	+157,098	+50.74
10.	Cute and Sexy	399,054	+156,197	+64.32
11.	Funfari	637,704	+146,126	+29.73
12.	Drinks for All!	678,268	+142,949	+26.70
13.	COLLAPSE!	892,149	+141,787	+18.90
14.	Millionaire City	281,694	+140,989	+100.20
15.	Bubble Popp 2	377,717	+137,065	+56.96
16.	Good and Evil	804,658	+125,308	+18.45
17.	Who Loves You More	191,862	+122,389	+176.17
18.	Classic Word Games	341,749	+116,830	+51.94
19.	Sweet World	320,479	+111,975	+53.70
20.	Age of Champions	600,773	+108,297	+21.99

EA SPORTS FIFA Superstars places at number one with by far the most significant growth. For those who have somehow escaped the marketing blitz — mainly those of us in the United States — the reason behind Superstars’ steroidal growth is the kickoff today of the World Cup, the premier yearly event for the world’s billions of soccer fans (plus whatever advertising and promotion EA has been doing for the game).

Superstars isn’t the only game in town this week, though. Also worth checking out are Crazy Cow Music Quiz, a trivia game; Fashion World, which has players run a boutique; and Baking Life, which does the same in a bakery (with custom cupcakes!). Check out Inside Social Games for more coverage.

The most interesting app this week, though, may actually be Gossip, at number five. This is a sort of meta-game that involves competitively making up rumors (nasty or not) about your Facebook friends — which of course get shared around, driving up the app’s traffic. The only downside is that its interface is in French, limiting its use to English-language users.

The remaining non-game apps are Cute and Sexy, Drinks for All! and Who Loves You More, which are respectively a percentage generator, gifting app and profile analyzer. The common theme is that they’re all fairly simple, and nothing we haven’t seen before — although that’s not preventing significant growth for the whole group.

Smaller developers have been getting bought right and left this spring, and companies of all sizes are upping their bets on social gaming with new funding rounds.

The industry is well on its way to contribute $835 million to the $1.6 billion US virtual goods market this year.  And even though many developers’ traffic has been wracked by Facebook’s changes to its communication channels, there are still opportunities for investment, as leading social app investors told us recently.

This year, Inside Network held our first ever summit on these apps and games that are transforming how social platforms monetize and continue to engage users. Inside Social Apps 2010 featured speakers from many of the leading thinkers in the social gaming industry, from developers and publishers, to monetization companies and investors.

Maha Ibrahim, General Partner at Canaan Partners, spoke with Nick Lawler, Managing Director at Maverick Capital, Rick Thompson, Co-founder of Playdom, Tim Chang, Principal at Norwest Venture Partners and Atul Bagga, VP Equity Research at ThinkEquity on where their companies are anticipating the greatest investment opportunities, and what new players we might see debut on the social gaming landscape.

A clip of the highlights from this presentation:

Maha Ibrahim also spoke with us in an exclusive interview backstage about the specific vertical where she expects the biggest growth to happen. Ibrahim’s analysis falls in line with the trends we’re observing in global traffic stats and demographics data.

All signs point both to new advertising and marketing opportunities for brands and emerging, monetizable audiences for app developers.

Ibrahim’s full interview covers:

* Why she thinks payments — covering both new types of payments and international payments — will see the biggest growth in the coming year
* How payments and monetization companies can jumpstart their international growth using the aggregator strategy
* Her rule of thumb for developers seeking the most profitable markets outside of the US
* How payment vendors can still find opportunities in what seems otherwise to be a crowded market

The full interview is available through Inside Facebook Gold.

Facebook disclosed this week that more than 20 million videos are uploaded to the social networking site every month, helping to generate more than 2 billion video views over the same period.

The pace at which people are uploading videos to Facebook has started to grow a lot more quickly in 2010 than it did in 2009, which isn’t surprising considering that Facebook itself has quickly grown to what we believe is now around 500 million monthly active users.

NewTeeVee reported that in March of 2009 Facebook reported an average of 12 million video uploads a month, or 415,000 a day, and that about 40% of these came from webcams. Facebook said that 14 million videos were being uploaded every month, as of September last year. The number increased by 2 million in the span of six months in 2009,  and eight months later it increased by 8 million more uploads.

There’s also some comScore’s Video Metrix tracks online video views and found that 178 million U.S. users watched a video in April. Of these Google ranked first in the number of unique viewers (YouTube), followed by Yahoo!, Fox Interactive Media, Vevo and Facebook.

Facebook ranked fifth, with more than 41.1 million unique viewers watching an average of 5.6 videos. By way of comparison, Google/YouTube had more than 136.2 million unique viewers watching an average of 96 videos. However, Facebook beat out CBS Interactive with 39.2 million uniques watching an average of 8.1 videos, Hulu with 38.7 million uniques watching an average of 24.7 videos, Viacom with 38.4 million uniques watching an average of 10 videos and the Turner Network, 32.5 million unique visitors watching 9.4 videos on average.

Facebook users may be watching fewer videos per person because they are busy doing other things, like commenting on status updates, browsing friends’ photos, and playing games.

Whatever the case, it seems Facebook’s video uploads are growing much faster now than they have been. This is probably related to more than a quarter of Facebook’s users now accessing the service via mobile devices (devices that more frequently than ever come equipped with video cameras).

Microsoft search engine Bing has just launched a new social sub-site (http://www.bing.com/social), allowing users to search through Facebook Page updates and links publicly posted to personal profiles. These results are posted alongside tweets on the Social home page, which Microsoft hopes will become the new destination for social search. The new integration is part of a deal announced in October between the two companies.

Bing Social is looking to become a social search destination by returning two types of Facebook results. Updates from official Pages are displayed in their entirety, including full text, URLs, and a link to the Page itself. This incentivizes Page owners to fill their updates with common search terms in order to show up in Bing’s results. However, this could lead to spammy Pages cluttering search results by constantly updating with the most popular words of the day, much the way Twitter spammers do.

The second type of Facebook results are URLs posted in personal profiles by users whose privacy settings share their status updates or links with “Everyone.”  In this case, Bing explains “No names or photos, or even the text in the update associated with the link are published – just the link in aggregate.” When you search you won’t actually see results for that term, but instead you’ll be shown URLs posted in the same update as the term alongside a headline or blurb about the link, or the number of users who have posted the link. This should keep privacy advocates happy while still providing value. However, the reliance of the feature on public updates lends a motive to Facebook’s “Recommended” privacy setting of sharing status updates and posts with everyone, which we think could be more than what many people want.

These functionalities combine with features from Bing’s Twitter integration to form the Bing Social home page. Upon landing, users are immediately shown tweets and Facebook updates about that day’s most popular topic. Users can refine results by timeframe or social media source, and can see keywords and people related to the topic. Trending topics are deduced from both Facebook and Twitter data, and explanations for their popularity are pulled from What the Trend. Bing’s results are not comprehensive, though. A search on Twitter returns many more results than appear in Bing’s stream, and copying a link from an official Page’s update into the social search engine doesn’t necessarily return any results. This makes Bing Social better for getting an impression than tracking down a specific tweet or update.

Even if the service is in beta, it’s not readily apparent how one navigates to the search engine without the URL. It’s scope is further limited because you can’t initiate a social search from the primary Bing search engine. While searching for [famous name] + “Twitter” from the Bing.com home page brings back tweets, adding “Facebook” to general Bing searches does not trigger a social search.

Overall, Bing Social’s greatest potential is in helping Facebook users to connect to new Pages. It could be especially powerful for directing users to Pages focused on their locality. While searching an issue of importance to their neighborhood, users might stumble upon the Pages of their city’s newspaper or a local government candidate who cares about the subject.

Bing has been stepping up its involvement with Facebook in other arenas as well, gaining 400,000 new fans for Bing’s Page through a promotion with FarmVille earlier this year, and helping Facebook power and improve its own search feature.

[Editor's Note: The following stats are excerpted from Inside Facebook Gold, our membership service tracking Facebook's business and growth around the world. Click here to learn more about our complete data and analysis offering.]

Growth rates for some of Latin America’s largest countries remained rock steady from April to May 2010, with one notable exception: Brazil. South America’s largest country fell to a mere hundred thousand new monthly active users, compared to the 632,520 it picked up in April, according to our Global Monitor report.

Brazil is one of several large countries worldwide that Facebook is finding difficult to crack — another being India, which also slowed down in May. For Facebook, these two are prime markets, with the largest populations available in their respective world regions. But that also means that other companies have tried harder to serve them; Google’s Orkut, for instance, is proving fairly tenacious in both Brazil and India.

Facebook is faring better in some of the other markets you can see below. Mexico, which has now ranked first for four months in a row and brought in 1.5 million new MAU in April, slowed a bit in May, falling to 1.2 million MAU. But with its overall penetration only recently having topped 10 percent, it’s unlikely this country is ready to slow on a longer term basis yet.

Colombia has also held onto its position, with almost identical growth of 782,200. It formed a bloc with two of Latin America’s other highest penetration countries in May: Argentina followed with 602,680 new users, and Venezuala brought in 340,480. All are headed for 30 percent penetration, a point they’ll cross before the end of this year if they keep up their current rates of gain.

Following that trio, growth was lower for most of the remaining countries you see below. Peru slowed the most dramatically, bringing in only a third of its April total with 122,300 new MAU. However, growth was particularly good in April, so what we’re seeing for May is a bit closer to the norm, with the exception of Brazil.

There are now 42.9 million Facebook users in South America, not counting those in central America and the Caribbean, who would add in almost 15 million more. Total penetration has topped 11 percent. As always, our stats are sourced from Facebook’s advertiser tool, which offers estimates that may run a few weeks or more behind.

The full Global Monitor report is only available through Inside Facebook Gold, our data membership service that also includes access to exclusive analysis. To sign up or get more information, please see Inside Facebook Gold at gold.insidenetwork.com/facebook.