Freewheeling question-and-answer site Formspring announced an $11.5 million second round of funding last night, led by Redpoint Ventures with Baseline Ventures participating. It also released its new “Respond” button that websites can embed to ask users questions about their content. The announcements follow tumultuous year of rising and falling traffic on Facebook and off of it. Our readers will note that the company’s name keeps appearing in our weekly AppData leaderboard posts, so here’s a closer look at the company’s Facebook integration and resulting traffic.

First, for those not familiar, the site lets users ask and answer basically any question, ranging from “What would be the best thing about being a vampire?” to “What are you doing right now?” When you log in, Formspring has a list of questions for you to answer (or delete) and you can always ask your own questions, too. It’s more like a well-designed Yahoo Answers and less of a knowledge-base question-and-answers site like Quora.

Overall, the company’s traffic has fallen from a high of 30-some million earlier in 2010 to a slowly rising 22.3 million today, according to Quantcast. On the Facebook side, Formspring originally offered a tab with questions and answers that users could put on their personal profiles. That visibility helped the company grow to a peak of 5.29 million monthly active users, according to our AppData tracking service, and may have played an important part in its site growth as well.

But Facebook removed personal profile tabs (but not Page tabs, of course) in a process that started in August and went through October, which may have driven the company’s Facebook numbers down to a low of 2.91 million as of October 13th or so. As you can see from the second graph, below, Formspring’s personal profile tabs appear to have disappeared entirely around the end of August — if you try to use the Facebook app today, you’ll see the message, above.

But Formspring spent much of the last year tweaking its core site interface, and adding easier ways for users to sign in with Facebook, find Facebook friends, and share questions back to Facebook. The result of all that work, from what we can see, is a roller coaster traffic pattern that currently seems to have flattened at around 3.90 million monthly actives as of today.

Its daily active user numbers look better. After recovering from its October low, the site has averaged around 800,000 daily actives on Facebook. Following a slight lull over the holidays, the company is now hitting its highest daily actives yet, bringing in more than 1 million yesterday.

So that’s what’s been happening with traffic. Now here’s a brief look at how the Facebook integration looks today.

After you log in with Facebook Connect, any Facebook friends you have on the site are shown to you as people you can potentially follow — following people on Formspring is anonymous. Users can login with Facebook Connect and also integrate Formspring into MySpace, Twitter, Blogger, Tumblr and WordPress.

You can answer the questions and select to publish to whichever social networks you’ve authorized. Once you check the boxes, for Facebook and Twitter for example, you click “Save Answer” and the answer appears in your Facebook stream or as a tweet on Twitter. To be clear, every time you answer a question or ask a question, it appears in your stream.

You can’t invite specific people to share with, but you can blast to all your friends/followers by posting to your stream. You can tell people to “Ask me anything” or post that you’re having fun with Formspring, or to create an account or follow you.  And when your friends do see it in the stream, it’s easy to see the questions (which are bolded) but not the answers (which are in light gray underneath). Other apps usually highlight users’ interactions with an app to interest their friends, not so the case here where the emphasis is more on the questions than user answers.

Formspring’s Respond button is the company’s version of a social plugin. Similar to Facebook’s Like button, it increases engagement and creates a link back to the publisher, in this case from the user’s Formspring profile. Facebook is proving how being integrated into third-party websites can entrench a web service, which can help protect it from competition. Part of the company’s new funding could be used to expand this social plugin program.

Facebook is testing a new Memorable Stories sidebar module which shows users four of their old status updates and when they were posted. The module is sometimes displayed in the right sidebar when users click “View Post” on a news feed or wall story. In some cases, users can click on the post’s timestamp to view the original post, complete with Likes, comments, and an additional set of Memorable Stories. In other cases, clicking through a post returns an error.

Memorable Stories breaks from the typical reverse chronological ordering of Facebook content and instead helps users consume a succesion of their best posts from across the years, and increasing time-on-site.

The feature doesn’t just show updates which received multiple Likes and comments, but rather pulls a random assortment of old status updates. In that way it’s more like flipping to a page of an old diary than a collection of your most popular or relevant posts. Users can click an ‘x’ next to stories to remove one and see another.

With time, Facebook may improve the feature by changing it to only show posts with Likes. It could also apply natural language processing to attempt to weed out posts with negative sentiment.

So far we’ve only seen Memorable Stories from as far back as 2008, though Facebook has clearly saved all of our content since you can download a copy. Apparently, the module can display status updates a user had removed from their wall, which some may have thought meant they had deleted. This could irk some users who wanted to permanently retract a a previous statement

Memorable Stories will be enjoyable for most, though some might not want to be reminded of more difficult times by seeing status updates they posted while stressed, depressed, or angry, or even from happy times that have since passed.

Facebook’s Photo Memories sidebar module would often show images of a user’s old romantic partners, leading to hurt feelings and strong negative feedback on the feature. Facebook responded by changing Photo Memories so it wouldn’t display photos of people users were previously listed as in a relationship with. It will be interesting to see if some users have similar negative reaction to Memorable Stories about how in love they were with a past partner, or how tough it was when they lost their job.

Memorable Stories addresses the issue that the most recent content on Facebook is not always the most compelling. By processing Likes, comments and tags to determine a post’s relevancy, Memorable Stories could show the best of your entire life on Facebook, just as the news feed does for your past week.

[Thanks to Brittany Darwell and Imogen for the tips.]

Small social network Tagged appears for the first time on this week’s AppData list of fastest-growing Facebook apps by daily active users. The app is the latest example of a Connect integration, which we’ve also seen larger players like MySpace do.

	Name	DAU	Gain	Gain,%
1.	CityVille	18,591,715	+1,620,113	+10%
2.	Marketplace	996,978	+428,876	+75%
3.	Causes	1,250,533	+328,041	+36%
4.	Windows Live Messenger	12,032,329	+293,998	+3%
5.	Millionaire City	2,678,013	+198,868	+8%
6.	寵物戰爭	235,763	+161,834	+219%
7.	Tagged	195,691	+136,798	+232%
8.	Formspring	1,029,000	+133,563	+15%
9.	Texas HoldEm Poker	6,981,466	+132,997	+2%
10.	Café World	3,428,097	+132,895	+4%
11.	แฮปปี้คนเลี้ยงหม	689,945	+123,055	+22%
12.	HTC Sense	3,905,124	+103,385	+3%
13.	Horoscopes	3,344,276	+96,998	+3%
14.	Country Life	808,712	+95,114	+13%
15.	Phrases	1,599,421	+93,010	+6%
16.	Spotify	964,627	+89,524	+10%
17.	Auto Club	90,553	+86,669	+2,231%
18.	It Girl	1,000,207	+86,215	+9%
19.	Friends photomontage	90,005	+84,234	+1,460%
20.	Status Shuffle	938,234	+80,328	+9%

CityVille once again leads the list, with 1.6 million new DAU. Last week, we suggested that the game might have finished its DAU growth, but it has bounced back for once more week. However, its gains in both MAU and DAU have slowed down significantly at this point.

Marketplace has also done well in the past couple weeks. The Facebook classified ad service has seen its ups and downs over the past year, but definitely more of the latter of late; its DAU is currently higher than it was for almost all of 2010.

Coming to Tagged again, the social network is not the only example of Connect integration on the list. Windows Live Messenger, of course, is the biggest, but Formspring, which just took a large $11.5 million funding round, also uses Connect alongside its platform app. And HTC Sense is a Connect app for both Android and Windows-based smartphones by HTC.

There’s just one more app we haven’t seen before on this week’s list: Auto Club, at number 17. The auto-fan app is just a gallery of cars, with a “Vote” button and pre-ticked “Post to my wall” button; users can vote once every ten minutes.

In an interesting tie between government and Facebook, users will soon be able to receive AMBER (America’s Missing Broadcast Emergency Response) Alerts on the site about children abducted in their area. The deal is made possible through a partnership between the company and the National Center for Missing & Exploited Children. It’s another sign that web services like Facebook and Twitter are becoming the fastest ways to disseminate information to the largest number of people.

The partnership could pave the way for Facebook becoming a medium for disseminating other types of emergency information, such as warnings about natural disasters, product recalls, violent crime, and national security.

Facebook will reveal more details about the program at a press conference being held tomorrow in Virginia on the fifteenth anniversary of the death of Amber Hagerman, whose abduction was the impetus for the AMBER Alert. The bulletins, which are traditionally distributed via television, radio, and through roadside signs, started being sent to AOL users who requested them in 2002. AMBER Alerts are available via SMS, and the Ontario, Canada Provincial Police set up a Facebook app last year to help inform locals about abductions.

The bulletins have reportedly helped save 525 children to date. Facebook previously worked with the U.K.’s Child Exploitation and Online Protection Center to offer an allowing people to report child predators and other inappropriate behavior on Facebook

Notifications of nearby abductions could potentially be shown as Facebook home page prompts or inserted into the news feeds of users, and could be opt-in or op-out. The news feed would be a particularly effective medium because the bulletins would be visible across different interfaces, such as mobile phones. Since AMBER Alerts often include details about the appearance and vehicles of suspected abductors, getting this information to users outside of their homes is important.

Since so many people are connected to the site, check it frequently, and it can be used to widely forward information, Facebook could become an important way of distributing emergency bulletins. There are some reports that students in lock down across the University of Texas at Austin campus used Facebook to pass along up-to-date safety information during a September 2010 shooting. In the future, it’s possible that governments and other institutions might call on Facebook to help warn people of impending tsunamis or tornados, tainted food products, fleeing suspects in violent crimes, or even terrorist attacks. If news of celebrity deaths can spread so fast, its reasonable to hope Facebook’s viral nature could also serve the public good.

Facebook recently reached an agreement with state and local agencies regarding how the government would interact with the site. The deal facilitates the creation of Pages for these agencies that could distribute community information, and also demonstrates Facebook’s willingness to cooperate with officials. The press conference with implementation details for the Facebook AMBER Alerts will be streamed at 10:30am EST on the Facebook Washington DC Page’s Livesteam app.

Update: Facebook has launched 53 AMBER Alert Pages for the United States and its territories that will distribute bulletins via the news feed. Facebook will contribute 50 million ad impressions toward promoting these Pages.

Over the past year, Facebook has steadily worked to make Credits the only payments option on its platform, but has given few specifics details on what it’s doing during the transition. Below, we take a fresh look at Facebook, its top developers and the platform providers to help clear up where Credits will go in 2011.

Although it has never said so explicitly and publicly, Facebook has required, one by one, all major developers to sign five-year agreements agreeing to use Credits exclusively. That’s instead of the direct credit card payments, third-party offer walls, game cards, and other payment options that have until now been the main ways to buy virtual currency for social games and apps on the platform.

Facebook’s initial plan was to fully transition to Credits by the end of 2010, but the results might not be obvious today. For example, the two largest games on the platform — CityVille and FarmVille — show an offer wall, game cards, and a variety of other non-Credits payment methods.

> Continue reading on Inside Social Games.

After releasing a very short list of ad providers that it has approved to work with developers on the platform last month, Facebook has added seven more names in the past week or so. Readers will recognize many of them as having been active on Facebook for years.

The newly-listed companies:

• Applifier
• AdJug
• CPX Interactive
• MATOMY
• SVnetwork
• TrialPay
• WildTangent

For those who haven’t been following, Facebook made the list to create another checkpoint for ad quality. In past years, it has not policed who provided what kind of ads on the platform as tightly, and many service providers competed to generate the highest revenues for developers regardless of quality. The result was a lot of misleading advertising in applications, whether in the forms of banners, offers or other promotions.

Facebook has been steadily upping the requirements for who can provide ads, banning some unscrupulous ad networks over the course of 2009, and increasing scrutiny of all providers and developers after a round of hard-hitting media coverage of the offers business in social games in the fall of that year. It introduced a range of new restrictions and transparency requirements over the course of the 2010.

This list is even more definitive. Facebook first requires ad providers to sign on to its site policies (against practices like running deceptive ads); then, once a given provider is listed, Facebook still holds developers accountable for the provider’s ongoing compliance with the policies, which we briefly reviewed here. Our coverage of the other ones more recently added, here.

With Facebook’s recent substantial fundraising round and the emerging possibility of an initial public offering in 2012, Facebook’s growth and business success will impact even more individuals, businesses, and institutions throughout the coming year. While the company remains private with details of its traffic distribution, and monetization, it’s clear that Facebook today implies more opportunity, and accompanying risk, than ever before.

Inside Facebook Gold is Inside Network’s business intelligence service that supplies monthly data on Facebook’s growth outlook through a comprehensive data feed service and expert analysis.

The January 2011 edition of Inside Facebook Gold includes:

• Global Data Feed Service, a comprehensive data CSV supplying vital stats on Facebook’s audience size, demographic distribution, advertising business, and global language distribution.
• Facebook Monthly Growth Report, an analytical review of audience change by country markets, and demographic and linguistic groups, with focused reporting on the company’s growing international platform ecosystem.
• Facebook Global Monitor, 100 pages of leaderboards and charts covering audience change in 160 Facebook country markets.
• DealWatch, a summary and analysis of all the funding and acquisition events, major hires, and partnerships that have taken place in the Facebook business ecosystem, and in social games and payments.

Inside Facebook Gold is a data and intelligence service designed for analysts seeking to understand and maximize opportunities in the Facebook ecosystem, and presents data on key indicators ranging from the site’s traffic growth to its advertising business and its robust applications platform.

Download the January 2011 intelligence suite at Inside Facebook Gold.

We had a good mix of different Pages on our list of the Top 20 fastest growing Facebook Pages this week — everything from football (soccer) to games to TV and movies to National Geographic. Growth on our list is measured by the number of Likes added since last week using our PageData tool, which counts the number of Likes added to a Page daily. It took between 374,000 and 734,500 new Likes to make the list this week.

Top Gainers This Week

	Name	Fans	Gain	Gain, %
1.	Texas Hold’em Poker	32,533,978	+734,541	+2.31
2.	Harry Potter	14,910,288	+579,861	+4.05
3.	Rihanna	20,992,197	+568,448	+2.78
4.	Black Eyed Peas	9,486,139	+563,940	+6.32
5.	Shakira	18,200,532	+496,424	+2.80
6.	Shrek	6,418,858	+495,384	+8.36
7.	Justin Bieber	18,236,230	+444,099	+2.50
8.	Eminem	25,422,168	+443,451	+1.78
9.	Linkin Park	20,532,960	+441,483	+2.20
10.	Lady Gaga	26,198,738	+421,424	+1.63
11.	Call of Duty: Black Ops	3,606,915	+421,359	+13.23
12.	The Simpsons	18,264,856	+412,566	+2.31
13.	MTV	13,828,854	+409,999	+3.06
14.	Ricardo Kakà	4,525,550	+401,131	+9.73
15.	Michael Jackson	26,668,824	+400,343	+1.52
16.	Cristiano Ronaldo	17,780,471	+400,307	+2.30
17.	National Geographic	4,372,936	+394,899	+9.93
18.	Manchester United	7,441,549	+385,563	+5.46
19.	AKON	14,815,554	+378,759	+2.62
20.	Facebook	31,790,949	+374,063	+1.19

First on our list was Zynga’s Texas Hold’em Poker which added 734,500 Likes to land at 32.5 million by the end of the week after steady growth. Another game’s Facebook Page, Call of Duty: Black Ops, took the number 11 spot on our list this week after adding 421,400 Likes to land at 3.6 million, also with steady growth.

A few movies’ Pages were also on the list. “Harry Potter” took second place with 579,900 new Likes, coming in just under 15 million. “Shrek” added 495,400 Likes to reach 6.4 million; the Page has been promoting the buy for the DVD/Blu Ray set of films.

Making up almost half of our list were musicians.

Rihanna took third place with 568,400 new Likes and about 21 million total. The Black Eyed Peas follwed in fourth with 563,900 new Likes to reach 9.4 million; the Page advertised the band’s upcoming appearances. Shakira took fifth place with 496,400 new Likes, 18.2 million total, and promotions on the Page for her new single and accompanying artwork. Justin Bieber took the number 7 spot, mostly tweeting and updating as he usually does, especially contests and a recent Vanity Fair magazine cover. His Page added 444,000 Likes to climb to 18.2 million.

Eminem’s Page took eighth place after adding 443,500 Likes to reach 25.4 million; the Page posted his promotion for the Grammy awards recently. Linkin Park’s Page added 441,500 Likes to climb to 20.5 million; the band has been promoting its current tour. Lady Gaga’s Page took tenth place with 421,400 new Likes and 26.1 million total. Michael Jackson’s Page was next on the list at number 15, with 400,300 new Likes and 26.6 million total; holiday merchandising reportedly sold well, too. Finally, Akon took the number 19 spot, adding 378,800 LIkes to reach 14.8 million. The singer has a new phone app and is running a contest to give away a Lamborghini.

Elsewhere on the list were television shows. “The Simpsons” came in at number 12 with 412,600 new Likes, 18.2 million total and news of recent awards wins. MTV’s Page was next at number 13 with 410,000 new Likes, 13.8 million total and a pretty regular promotion of its programming.

Football (soccer) also was popular on our list this week. Perhaps this was partially due to some recent awards given by the governing body, FIFA. Two players were on the list, as well as a recently popular team, Manchester United. Ricardo Kaká took number 14 with 401,100 new Likes, 4.5 million total. Next was Cristiano Ronaldo at 16, who added 400,300 new Likes to reach 17.7 million. Finally Manchester United added 385,600 Likes to climb to 7.4 million; the Page has begun to tie in much more with its web site on the Wall.

A few outliers on the list were National Geographic at number 17, which added 394,900 Likes to grow to 4.3 million this week. The Page promotes stories and photos from the organization and added 336,400 Likes on January 6, probably a likely Page consolidation. Last but not least was Facebook’s own Page, which added 374,000 Likes to grow to 31.7 million and take the number 20 spot on our list.

Today, startup Pixable launches its addictive photo discovery and consumption Facebook app Photofeed. It arranges all the photos shared by your Facebook friends into a highly relevant stream based on Likes, comments, and tags. Photofeed’s recommendation engine produces a more enjoyable browsing experience than Facebook’s native Photos app, and could become 2011′s breakout application.

Founded in 2009 by two MIT business school graduates, the company developed apps that let users share mosaics and video slideshows of photos before concentrating on the bigger problem of improving photo consumption. The seventeen-person, eleven engineer team has secured $2.5 million in funding from Highland Capital to turn the 60 billion photos uploaded to Facebook a year into a photo browsing destination.

Photofeed provides instant gratification by dropping the news articles present in content repurposing apps like PostPost and Flipboard, and integrating content supplied by photo sharing apps like Instagram and PicPlz. While Facebook is good at displaying the latest content, the average user has access to tens or hundreds of thousands of photos and Photofeed is the way to discover the best of them.

Pixable gracefully onboards new users by hiding deeper features and immediately showing them the most compelling photos from their network via the “Popular of the week” category, and later through categories such as “Best of 2010″. An overlaid tutorial can be brought up on command to teach users how they can scroll through photos, leave feedback, and see who’s tagged. Large arrow buttons that only appear when hovered over offer an intuitive and unobtrusive navigation system.

Once users have clicked through a few dozen photos, Pixable introduces them to its sharing feature that lets users post statistics about which of their friends have commented on, uploaded, or are tagged in the most photos. Users want to share these interesting facts that are accompanied by a link back to the app, creating a organic viral growth mechanism for Photofeed.

To bolster retention, users can follow their friends and be notified via email when they upload new photos, but to preserve the anonymous browsing experience of Facebook, users can choose whether they want that friend notified that they’re being followed. These sharing and reengagement tactics are apparently quite effective, as Photofeed’s beta reportedly grew from a few thousand to 100,000 users in two weeks, foreshadowing its potential explosion in popularity.

Pixable’s CEO and cofounder Inaki Berenguer believes the company’s biggest challenge will be maintaining the app’s swift navigation as demand surges. Berenguer says there’s no monetization model such as ads, printed products, or premium services in the roadmap. “The problem is so huge, our goal is to build a massive audience, 10 or 20 million, and then we’ll figure it out.”

Pixable Photofeed is a joy to use because it doesn’t let feature creep obscure the core value of the app. With so much industry concentration on how we take photos, it’s surprising to think no one else would translate the Pandora model into a way to consume them. By creating what is essentially a news feed dedicated to photo browsing, Pixable may be able to redirect the audience of the world’s most popular photo service.

Some users are seeing a prompt when they visit their Facebook Messages inbox allowing them to upgrade to the New Messages product launched in closed beta in November. The product automatically filters non-essential communications into an Other folder, allowing the main inbox to show only important messages. It also routes sent messages to whichever device or interface Facebook deems is the most convenient for the recipient, whether that’s Chat, Messages, SMS, or email. While initially only available to press and an early tester-base, it appears all users will soon be able to upgrade to New Messages.

At the product’s launch event, CEO Mark Zuckerberg explained that New Messages was built to facilitate modern communication which is simple, immediate, lightweight, and personal like SMS and instant messaging, opposed to more formal, asynchronous email. Though users get an @facebook.com email address, Facebook doesn’t expect users to shift things like payment receipts and newsletters there. Instead, the product reduces noise, eases cross-interface conversation, and creates a more comprehensive record of the communication users already perform. Users who don’t see the prompt to upgrade on their inbox can visit the New Messages about page to request an invitation. We expect a full rollout to occur in the next month or so, similar to how the profile redesign is now being pushed to all users.

The best part about New Messages is how it brings Chat into threaded, searchable conversation history. If someone sends you Message, but you’re online, you’ll see it as a Chat. If you send them back a Chat and they’ve already logged off, it will be routed to their New Messages inbox, and shown in the same thread as your previous Chat. This means you don’t have to worry about conversations breaking down because one person changed the interface through which they were communicating. Or if you accidentally close your last Facebook web interface window or head out the door, you’ll still be able to access those Chats from your phone in the form of Messages.

This system is similar to the interplay of Gchat and Gmail, and its adoption could pull users away from Google who use that company’s product for their reliability of delivery. The New Messages product also separates conversations by people rather than by interface, between which the lines are blurring as users increasingly use Chat, email, and Facebook Messages from their mobile device as well as the web. Other useful features of New Messages include forwarding and attachment support, and a one-click “Mark as Read/Unread” option.

The main problem with New Messages at present is the filtering of conversations. Event, Page, and Group updates are usually filtered properly into the Other inbox, leaving a high-signal, low-noise main inbox of one-to-one messages. However, Messages, including time-sensitive businesses communications, from people who aren’t your friend and don’t have mutual friends are filtered into the Other inbox as well. Without the red notification counter on your home page or gray counters on your Messages sidebar navigation link, it’s easy to forget that important Messages may be being filtered out.

For instance, I didn’t check my Other inbox for a few weeks and had multiple Messages from people who wanted to show me their soon-to-launch products. When Facebook sought to inform users of the five-day window to give feedback on proposed changes to its privacy terms via the Facebook Site Governance Page, that Message was also filtered out. Some users prefer to Message someone they’ve met before adding them as a friend, but these personal, social, one-to-one Messages might not reach their recipients until much later. Users can move a conversation between inboxes once it has started, but Facebook could address part of the problem by allowing users to opt to have the first Message from someone they aren’t connected to routed to their main inbox.

Overall, Messages will help most Facebook users. It anticipates the shift to using multiple devices and interfaces to conduct a single conversation. It also declutters the inbox by removing spammy and low-value Page and Event updates. Professionals who are frequently contacted by those they aren’t connected to will need to pay attention to their Other inbox. But for most, we advise upgrading or requesting an invitation to New Messages because it improves one of the core uses of Facebook — instant communication with friends.

[Note: it's currently unclear when Facebook shows counters for the Other inbox. This feature is still undergoing rapid development.]