Prototype, a new game for Xbox 360 and PlayStation 3 set to launch June 9th, has utilized Facebook Connect in one of the most innovative and clever ways since the technology became available. When you visit prototype-experience.com, and you authorize the site to connect with your Facebook account, you will be served up a personalized trailer previewing the game, which grabs pictures and basic profile information from your Facebook profile.

The game’s main character, Alex Mercer, is a shapeshifter — someone who can assume the form of another being or animal. As he notes in the preview, he can “become anyone.”

In the trailer, that anyone is you.

As Mercer narrates his story, set amidst a backdrop of a reddened and gray New York City, pictures of you and your friends come across the screen as he talks about consuming identities and memories. Your profile information, such as where you’re from or what you do, flash up on the screen in fluttering images.

Even if you’re not heavily into video games, you should find this trailer compelling. Intense music and disorienting glimpses into familiar information contained in your Facebook profile makes the trailer engaging, if not eerie. By the end of it, I felt like I’d be going to see this story in theaters, begging the question if other areas of the entertainment business couldn’t learn something from this Connect implementation.

After you complete the trailer, you will be asked a couple questions about the game, which enters you into a contest to win an Xbox and free Prototype games. According to the site, you must enable Facebook Connect in order to participate in the contest. Of course, in typical Connect fashion, the game can then publish information into your News Feed that will help increase the game’s presence with your Facebook friends.

This implementation of Connect has stirred interest at the Electronic Entertainment Expo (E3) down in Los Angeles, where making games more social (via Facebook) has the been the topic of many conversations and announcements.  Monday, Microsoft announced that Xbox Live, an online service based on the popular console, will integrate with Facebook Connect. Yesterday, a similar announcement followed for the Nintendo DSi.

Conclusion

The trailer crashed my browser the first time, but you should expect some technical glitches when companies try something this innovative and on the bleeding edge. In many ways, this use of Connect has everything you want: Personalized experience for the user, the always-attractive use of prizes and contests, and the ability to increase the awareness of the product by reaching more users (their Facebook friends). We’ll be watching to see if more companies in the entertainment space mimic Prototype’s efforts here.

Google dominated the business and technology press yesterday after it revealed the existence of Wave, a web-based application built upon email that enables users to share notes, pictures, blogs, videos and other bits of dynamic content in real-time. If successful, Wave would make Google’s core products and the web in general inherently more social, which begs the question: What does that mean for Facebook?

Overall, it might be too early to tell, but Facebook should keep an eye on where the technology is headed for a few reasons.

One is the design similarities. As an application, Wave embraces the “stream” design that Facebook has already implemented for its 200 million users. Apps focused on streams of shared content are based on the idea that information should flow to you. The Facebook News Feed and home page have been restructured to work in this format, representing a departure from past iterations of the site’s design that relied more heavily on users visiting their friends’ profiles. Under Facebook’s stream design, the content your friends share on Facebook flows to your fingertips.

Wave will do this, too. But it won’t just be your Facebook friends — it can be everyone in your address book, making it potentially very powerful.

But since Wave won’t be available until later this year, Facebook will enjoy even more time to have their users adjust to this way of consuming content on its platform. One of Facebook’s most powerful assets is that users have already uploaded years of pictures, notes and videos. This trove of content has made Facebook not only their primary communications mechanism, but their digital scrapbook as well. It’s unlikely that, overnight, they would move to their Gmail (or Wave) account to control all that information.

But Facebook shouldn’t dismiss Wave as hype, either. It appears to have immediate upsides for both developers and consumers. For developers, Wave is very open. They can add functionality to it, integrating it with other websites and applications. For consumers, Wave seems to marry social features (like an event invitation) with the robust messaging capabilities that you’d see in Gmail or instant messaging clients.

It also doesn’t require that users be loyal to one particular web tool or service for their content creation; they could use many of them. This, of course, could make Facebook look more “closed off,” since many of Facebook’s core applications (i.e. photos, notes, videos) are proprietary.

Conclusion

Rather than be adversarial, Facebook might examine how its site could work alongside Wave rather than compete with it. To date, Facebook’s large user-base remains loyal. They might conclude that Facebook and Google serve different purposes in their daily Web diets, as they currently do today.

While marketers understand it’s important to build a presence on Facebook by creating custom applications and pages to interact with customers, sometimes they (rightly) hesitate to make a substantial investment if they can’t track the success of those initiatives.

Omniture, a company whose SiteCatalyst product allows marketers to monitor the performance of their brands on websites by tracking traffic metrics such as page views, referrals, and time spent on a page, should be able to help solve that issue. Today, Omniture launched App Measurement for Facebook. The new product allows marketers to see just how users interact with their Facebook applications.

Omniture’s App Measurement tool tracks metrics like:

1. Marketers will be able to understand which user demographic segments are adopting the application most vigorously.
2. Marketers can segment users by number of friends they have, or by the social activity performed.
3. Which users invited their friends to use an app.
4. What sections of the app Facebook users spend the most of their time.
5. How Facebook engagement leads to conversions.

Ideally, this product should allow marketers with no technical background to have an immediate analytics tool that shows a robust set of metrics of how their brands are doing on Facebook. There have been many analytics tools created by start-ups to monitor such activity, and developers have often built their own, but Omniture is one of the most mainstream players to get involved with Facebook analytics.

Omniture executives say the new addition to its SiteCatalyst product will demystify the questions many marketers might have about their Facebook efforts.

“The relatively young phenomenon of social media has forced marketers to rely on experimentation to tap into [its] potential,” Brett Error, CTO and executive vice president of products at Omniture, said in a statement.  ”The App Measurement for Facebook solution will deliver actionable insight concerning Facebook applications and help marketers develop data-driven social media marketing strategies.”

Conclusion

Overall, this appears to be a solid product that should help many companies understand the value of their Facebook efforts, and, by that same token, where they could use improvement. Companies often talk about the launch of their Facebook pages and apps, but not always about the results they yield. We hope such products will illuminate just where companies have enjoyed success and suffered failures on the platform, allowing everyone to learn from them.

While Facebook should work hard protect the social network from pieces of malware, such as the Koobface virus, users are ultimately responsible for any harm visited upon their account or computer. Theodore Karantsalis, of Miami Springs, Fla., learned that in a very public way this week, when he dropped a lawsuit he filed against Facebook for $70.50.

According to a report from CNET, Karantsalis alleged that Facebook failed to adequately protect users such as him from a virus, which he said caused his account to be temporarily suspended. When his account was restored, he claims he couldn’t get access to his pictures and a good portion of his existing friend list.

Facebook, for its part, didn’t budge to his demands. A Facebook spokesperson confirmed in the CNET report that Facebook disabled the account and served up Karantsalis with a new password, which is standard practice for an infected account. But the company denied deleting any pictures or friends. More importantly, Facebook’s terms of service (in section 14) are very clear on the responsibility of users as it concerns viruses:

“WE TRY TO KEEP FACEBOOK UP, BUG-FREE, AND SAFE, BUT YOU USE IT AT YOUR OWN RISK. “WE DO NOT GUARANTEE THAT FACEBOOK WILL BE SAFE OR SECURE…WE WILL NOT BE LIABLE TO YOU FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS STATEMENT OR FACEBOOK, EVEN IF WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.”

Karantsalis, a librarian and “privacy advocate,” has a history of suing companies. He sued Sprint and Wells Fargo when his Sprint invoice was exposed to an online banker at Wells Fargo (a bank he didn’t use). For the Facebook suit, he claims he arrived at the $70.50 number by charging around 30 cents for each friend he had to add back to this account.

Conclusion

Facebook was smart to hold firm with this lawsuit, which sounded, at best, gimmicky. But we do think this news is important for the mere reason that the stakes for protecting Facebook’s users could increase as people start making more monetary transactions over the platform through Facebook credits (which Facebook says it will start testing soon).

It would be bad if anyone loses their entire Facebook portfolio of pictures (though that doesn’t appear like it actually happened in this case). But as Facebook works on new systems for monetization, it must be vigilant that viruses and resulting data leakage could affect users in a more dangerous way. In such a scenario, the blanket terms of service disclaimer won’t be as effective in the public eye (or court).

As Facebook expands its reach globally, international brands should appeal to local audiences with their public profile pages. At least, that’s the thinking of adidas, the German footwear maker, which launched a “Your Area” tab on its Facebook profile. It allows the 1.8 million fans of the adidas Facebook page to view content from their local countries where they buy sneakers and other products.

The page will target 13 countries with the Your Area tab, including the U.S, China, and several throughout Europe. While the features adidas packed into the new tab mirror that of normal profiles (such as “videos” and “news feed”), it makes the profile more interactive and engaging.

A list of the features include:

1. A News Feed with local content, featuring links, events and promotions.
2. A photo and video viewer, featuring adidas products (and the people who use them).
3. “adidas buzz,” a twitter feed about adidas products in your local area, including some promotions.
4. A link to the adidas store finder.

The page also helps local stores target their specific fans. Local adidas managers, for example, can feature products and post content to the page. They can also tag new products, and provide liks to the adidas e-store.

Conclusion

We applaud adidas’ approach to making its Facebook page more personal and localized. E-commerce sites on the public Web have suffered internationally because they often lack a local touch. Companies would be foolish to make the same mistake on Facebook, especially given how much more personal the user experience is on the site.

The only thing we might change is adidas’ version of “local,” especially as it concerns some of the bigger countries. If you live in the United States (say, in San Francisco), adidas news from New York or Austin doesn’t feel like “Your Area.” It would also be nice if the page automatically detected the viewers’ Facebook language setting instead of requiring the user to choose.

To date, Facebook’s 200 million active users upload about 850 million photos and eight million videos per month, according to the company. While most users don’t consider the burdens of hosting that much information, Facebook’s leaders and investors surely are, if a report from Data Center Knowledge provides any indication of how much it costs to run the site.

According to the analysis, Facebook spends between $20 million to $25 million alone on the space that houses its servers. That figure does not include the cost of equipment (mostly servers) used to host the data.

DCK’s estimate will further fuel speculation about the rate at which Facebook is spending its cash, which has led the company to seek additional financing. The site was able to make its estimate because Facebook leases the data center space; it doesn’t own it. Facebook’s data center landlords (Digital Realty Trust and DuPont Fabros) made the information public through quarterly earnings statements and SEC filings that DCK obtained.

The $25 million price tag includes Facebook’s main data center spaces in Silicon Valley (where it has two), Virginia and Santa Clara, Calif. More established technology heavyweights Google and Microsoft own their main data center properties. What’s perhaps more striking about the report is that the estimate doesn’t account for all of Facebook’s back-end costs:

[The report] doesn’t include Facebook’s investments in server and storage hardware, which is substantial. Some reports say the company spent $30 million on servers in 2007 and another $60 million in 2009. There’s also the cost of electricity to power the servers, which is not included in the data center lease.

Conclusion

While this report isn’t foolproof, it makes some educated guesses about just how much money it takes to support Facebook’s operations. Soon, Facebook may need more capital in order to keep things moving – be it through an IPO or additional funding.

While we recently examined early examples of retailers implementing Facebook Connect, leaders in the retail industry have also been experimenting with how best to utilize the Facebook Platform by building profile pages and accompanying applications. As a result, many marketers in the industry should pay close attention to the recent efforts of one heavyweight: Target. The $64 billion superstore launched an application on its Facebook profile that allows users to vote on a list of charities to whom Target should donate money.

The application supports the “Bullseye Gives” campaign (named after Target’s logo), and it falls in line with the company’s philanthropic efforts. In the announcement, Target noted that it donates five percent of its income a year “to support education, social services, the arts, and volunteerism,” which works out to more than $3 million a week. With the Facebook app, users may choose from the following charities:

1. American Red Cross
2. Breast Cancer Research Foundation
3. Feeding America
4. HandsOn Network/Points of Light Institute
5. Kids In Need Foundation
6. Operation Gratitude
7. Parent Teacher Association
8. National Park Foundation
9. St. Jude Children’s Research Hospital®
10. The Salvation Army

Before users submit a vote, they can click on the charities’ Facebook profiles to help make their decision. Once users vote, they have the option to publish that action back to their Facebook profile.

After voting, the app displays the results of how each charity is fairing. The voting will end on May 25, 2009, and $3 million will be distributed to the charities as relative to what percentage of the vote they capture.

The application links to Target’s community outreach site, which gives users information about how they can get involved with charities in their local communities by volunteering, allowing Facebook voters “to find local causes that matter to them most.”

Conclusion

To date, the application has garnered more than 75,000 votes. Considering the efforts of retailers to gain Facebook traction remains in a nascent stage, this must be looked upon as a successful campaign. That said, Target shouldn’t stop with this application. It should seek to use Facebook Connect to allow customers to use their Facebook identity to interact with products and share their thoughts on those products with friends, as we saw with Jansport and other retailers last month.

Although Facebook has become a staple consumer application, businesses have grappled with how best to contend with it internally. Dogged by concerns of employee productivity, security and compliance, many companies have banned employees from using Facebook during the day, both on their work computers and corporate mobile devices.

Business technology vendors, including IBM and Microsoft, have tried to tailor their products to help companies bring their employees social networks in a secure manner. They provide internal social networks with Facebook-like functionality for employees to share expertise and collaborate on key projects. But industry analysts say those efforts have been hampered by poor adoption rates within enterprises. Because they are closed networks, they limit the ability for employees to communicate and share with customers and partners, making the value proposition much lower.

Another company, WorkLight, has taken a third approach that could serve as a compromise between closed social networks and a total Facebook ban. Worklight is essentially a server that companies buy. The server acts as “a bridge” between traditional corporate IT systems and consumer portals like Facebook. Since the information passes through the server, it protects company’s internal systems from attack and data leakage.

Inside Facebook caught up with David Lavenda, WorkLight’s vice president of marketing and product strategy, to find out how companies are enabling their employees to use Facebook to get work done.

IF: Why are companies that you speak with hesitant to let their employees use Facebook? Is it for security concerns?

Lavenda: While Facebook is an attractive venue for enterprise social networking, organizations need to be comfortable with, or find a way to deal with [some critical issues]. One is Safeguarding information on a consumer social network. A social network that is designed for the consumer market may not have the requisite qualifications that companies require of enterprise systems. To thwart possible Web 2.0 security risks, companies need to safeguard systems and users, and ensure employees can safely collaborate.

IF: Why would enterprise social networking work better on Facebook, opposed to buying an internal social network from one of the traditional business software vendors?

Lavenda: Unlike proprietary collaboration solutions, an enterprise social network nested on Facebook would benefit from the service’s popularity to spread among employees. This would obviate the need to aggressively promote new tools across the enterprise, as employees are already on the popular network. However, to ensure even those employees that are not signed on to the popular Facebook can collaborate within the same space, companies can use solutions such as WorkLight to allow them to securely collaborate on Facebook.

IF: We wonder if employees would find it it difficult to mix their personal and professional life on Facebook?

Lavenda: Privacy in a corporate setting — some people are uncomfortable about mixing their personal lives and their professional lives. Unless a clear delineation between the two can be created, people will be apprehensive about “buying in” to the enterprise usage. Again, this is something that WorkLight helps to solve.

IF: Can you explain how Worklight can be used to enable employees to communicate with customers and partners on the social network securely?

Lavenda: The WorkLight Application Platform connects with enterprise systems and applications on the one hand, and extends these applications via a host of consumer Web 2.0 services, such as Facebook on the other. Companies that use WorkLight can offer employees a secure overlay made available much like any other Facebook application.

WorkLight is, in essence, a secure app running within the Facebook window. It leverages the Facebook social graph (and combines it with the corporate directory ala LDAP or some other directory). Employees can use WorkLight to form groups with colleagues, share business insight, news and links, upload documents and diagrams, perform simple business tasks such as time reporting and purchase requisition approval.

Moreover, by leveraging WorkLight, companies can use Facebook to engage customers and partners. Customers can add a range of widgets on Facebook, such as account management, search and order widgets. Similarly, partners can track upcoming shipments, manage inventory levels and more.

IF:  Can you offer an example of how a company has utilized Worklight to get employees onto Facebook safely?

Lavenda: One of our customers is an international bank with employees spread across many geographical locations (the bank has branches in over 50 countries). It used WorkLight to connect its different teams and encourage collaboration between members. By leveraging Facebook’s social graph, the bank employees were able to connect with colleagues using a simple, intuitive tool which is linked back to its enterprise systems, corporate directories, and more.

For nearly a week now, Facebook has found itself in an uncomfortable position: It has had to defend the rights of Holocaust deniers who have set up incendiary group pages on the site. Today, Facebook announced that it had removed two of the pages, but the issue is likely to be revisited frequently in the future, exposing one of the grayest areas in Facebook’s Terms of Service.

Yesterday, Attorney Brian Cuban — the brother of Dallas Mavericks owner Mark Cuban — wrote an open letter to Facebook’s CEO Mark Zuckerberg, asking him to remove all the Holocaust denial sites. While these groups might stop short of explicitly encouraging violence against Jewish people, Cuban wrote, they nevertheless promote hateful speech and egregiously inaccurate information about one of the darkest incidents in modern history.

A key passage in Cuban’s letter:

The Holocaust Denial movement is nothing more than a pretext to allow the preaching of hatred against Jews and to recruit other like minded individuals to do the same.  Allowing these groups to flourish on Facebook under the guise of “open discussion”  does nothing more than help spread their message of hate.  Is this the kind of open discussion that Facebook wants to encourage?  Is this really where you want to draw your line?

The issue has dogged Facebook for a week now. It started with an earlier post by Cuban, in which he tried to make a legal case as to why the Holocaust denier groups violated laws in some European countries. Seeing as Facebook operates internationally (not just in the U.S.), Cuban argued the groups should be removed. In addition, because Facebook is a closed network that requires members to join, U.S. First Amendment rights don’t apply as vigorously as they do on the public Web.

Facebook hasn’t relished the task of defending the groups, which it called “offensive” in several interviews with the media. In a CNN article, Barry Schnitt, a Facebook spokesman, noted the company debates the issue of controversial groups frequently. While Facebook disagrees with the views expressed on the Holocaust denier pages, he said Facebook will not remove a page unless it promotes violence or threatens an individual, which is outlawed in Facebook’s terms of service. The idea, he says, is to facilitate an open dialogue across the social network.

“It’s a difficult decision to make. We have a lot of internal debate and we bring in experts to talk about it,” Schnitt said. “Just being offensive or objectionable doesn’t get it taken off Facebook. We want it [the site] to be a place where people can discuss all kinds of ideas, including controversial ones.”

CNET published a full-length Q&A with Schnitt that details the internal discussions Facebook has on these matters, and how the company approaches dealing with them.

Conclusion

The Holocaust represents one of the darkest moments in human history. We of course find a group that seeks to deny the existence of those awful events offensive, and we believe it offends Facebook as well.

But we also believe that, in the Facebook ecosystem, Facebook itself must act as a judicious governor that enforces a steady policy. As a company, Facebook is mostly comprised of technologists, engineers and marketers. As a result, we think its inclination to defer to U.S. laws of free speech make sense in the long run.

By having a consistent stance, Facebook won’t have to judge groups continually on an agonizing, case-by-case basis. As this incident revealed, holding firm to its terms of service won’t always be popular, but if you believe in the First Amendment, it’s ultimately the right thing to do.

As we chronicle our lives online with pictures, video and notes, the information should live on Facebook for our families to enjoy years into the future. At least, that’s the aim of Footnote.com. The site, which stores historical documents, recently launched a Facebook application called I Remember, which helps people build Facebook profiles for their loved ones who have passed away.

The application constructs profiles that look similar to that of a regular Facebook profile. It has four tabs: A Wall, Info, Photos and  ”Remembered By.” The info tab is even more interactive than it is for living Facebook members. It sports a “timeline,” where you can chronicle the significant events in a person’s life. It also features a “facts” box where you record vital information, such as birth, marriages, children and deaths.

The application makes what would be an otherwise static online obituary more social as well. Users can invite friends to contribute pictures and other pieces of content to the profile that help enrich the person’s memory.

The application touches on an inescapable issue for Internet users of all ages: If they die, what will happen to their identity and information on Facebook? The market has responded to that question with nascent start-ups. Legacy Locker, for example, launched a service that stores login and passwords, giving them to your friend or family member of choice in the event you pass away.

Conclusion

Despite its increased pervasiveness amidst older demographics, Facebook still has a young user base. Since many of their parents and grandparents who have passed away didn’t have Facebook, the ability for those users to make a profile in their memory should be viewed as an admirable endeavor.

That said, we see some potential problems with this service.

Assume, for a moment, that a mother passes away. If her children have never got along well, it might be difficult for them to agree how her presence should be memorialized on Facebook. Would Footnote.com remove a profile after a loved one complained about the content?

The app also fails to address how Facebook users can authorize their loved ones to access content from their own personal profiles. Creating an application (like Virtual Locker) that authorizes friends or family members to manage a profile after their death seems like a critical feature that Facebook itself, perhaps without the aid of third-party companies, should consider managing itself given the gravity of the task.