Inside Facebook

Facebook said 350 million of its 800 million monthly active users access the service through mobile devices today in an update today to its statistics page. The last time it spoke about this number was back in March, when it said it had 250 million monthly active mobile users.

Our app tracking service AppData does record actives for Facebook’s different smartphone apps. Since Facebook is likely one of the most, if not the most, popular smartphone app in the world excluding China, its growth can be used as a proxy for developers interested in the market size of each platform.

We went through our service AppData to compile the following figures. The iPhone app is adding about 250,000 users per week to reach nearly 90.1 million monthly active users. Growth has slowed in recent weeks in likely anticipation of the iPhone 5, which may make its debut in October.

Facebook for Android is showing five times as high a growth rate as iOS with nearly 1.5 million users becoming monthly active users every single week.

> Continue reading on Inside Mobile Apps.

Facebook introduces platform changes today that will help it diversify beyond social gaming and add new user acquisition points for developers. Here are four key changes happening now:

1) Facebook is making a serious effort to diversify the platform beyond gaming and marketing by expanding the kinds of structured behavior users can share.

Facebook has long had a conflicted relationship with the fact that the most mature verticals on the platform have been social gaming and marketing. The platform has spawned companies like Zynga, which was founded just four years ago and went on to earn $279 million in revenue in the second quarter of this year.

But the platform has yet to produce a third-party business of similar size in another industry even though Facebook chief executive Mark Zuckerberg has repeated in multiple events that he believes that social networking will revolutionize every industry from the ground up.

Today, the company is expanding the range of structured actions users can take on the platform. Users can now “Watch,” “Listen,” “Cook,” or “Run,” among numerous other types of behavior. It adds more granularity to the “Like,” button, and will ideally fuel the growth of many types of apps beyond gaming. The company showed off a number of examples apps like “Social Cooking” and the Spotify integration, where users can catalogue what they’ve cooked or what music they’ve listened to.

The question is whether adding a social layer and stronger viral distribution on Facebook will help make these long-troubled industries like music and media more financially viable. Spotify chief executive Daniel Ek did say on-stage today at the developer conference that Facebook-integrated users were more likely to pay for the service, but didn’t specify by how much.

2) Graph Rank adds interests to the social graph, matching users with the types of news feed stories like music, cooking or movie-themed ones that are most likely to engage them.

Facebook is adding another layer of sophistication to the Open Graph today that will match news feed stories with users based on their interests. So users who are likely to click on music-themed stories, will probably see more music-related activity in their news feed. It appears to build on platform changes the company introduced within the last year that matched gaming activity with users who play games.

3) Facebook will make it easier for developers to get users to continuously share their activity on the network.

Since the company’s botched launch of Beacon four years ago, Facebook has struggled with how to boost sharing activity in a way that respects the privacy of users. As the company has matured and attracted more mainstream users, it’s had to learn how and when to push online social mores without damaging its brand too much.

Today, the company is doing a careful pendulum swing back toward more continuous sharing by letting users give third-party apps the ability to constantly stream their activity. Users maintain control because they can toggle on or off the ability of third-party apps to share their behavior. The news feed is also far more sophisticated now and can filter out activity that’s uninteresting so users don’t have to worry about bombarding their friends. But there is still potential for abuse.

4) Developers can focus on three user acquisition points on the platform: timeline, news feed and the ticker.   

With timeline and ticker, Facebook introduces two new user acquisition points for developers this week. One is the ticker, which shares activity on the network with more emphasis on how recently it was published. The second is the news feed which appears to be relatively unchanged from before in that developers need to get their users to share updates that can easily attract likes and comments for higher rank.

The third — the Timeline — is probably the most difficult to break into. A third-party app would have to produce a news feed story that attracts enough engagement that it might count as the best update from a given month or year of a user’s life.

Ticker: Low barriers to access, but likely a lower clickthrough rate. Ticker was introduced last week and shows a live feed of user activity from across the web. Facebook vice president Mike Schroepfer said during a press question-and-answer session at the developer conference today that the company will continually to tweak the ticker for more engaging activity. So there is some filtering for engagement, but less than what would be seen on the news feed.

News Feed: Similar to before. High barriers to access. An item would need to have high EdgeRank (e.g. a user would see an item if the update itself attracted many likes or comments or if it was from a friend they often interact with on Facebook).

Timeline: High barriers to access. Timeline is a new profile view that lets people see a visual history of a user’s life. To see something in Timeline, the news feed story would have to be the most engaging from a given month or year in a user’s life or they’d have to intentionally curate it into their Timeline.

Or a user could add an application to their timeline, akin to what “Boxes” used to do in letting users feature applications on their profile page until it was removed last year.

Facebook didn’t confirm any new growth numbers this morning at its developer conference, but did say that it saw at least a half-billion users access the site in a single day last week.

The most recent statistics from Facebook in June said that the company had more than 750 million monthly actives. (However, in a spoof at the beginning of the conference, SNL actor Andy Samberg, who was pretending to be Facebook chief executive Mark Zuckerberg, did show a chart suggesting the site has more than 800 million actives.)

Facebook has long said that at least half of its monthly actives log in on any given day. So if it has more than 800 million monthly actives (or people who have logged in at least once in the last 30 days), it wouldn’t be surprising to see more than 400 million users log in on any given day.

Beluga                                             Facebook Messenger

Yesterday’s launch of a standalone Facebook messaging app was the culmination of five months of work, which turned a fledgling app from a team of three former Google engineers and turned it into one that could interface with the daily messaging needs of the social network’s 750 million users.

We talked with Lucy Zhang, who co-founded the startup Facebook acquired to build Messenger, about how she took their original app Beluga and turned it into one that could handle messaging volume for a much larger user base. Messenger has become iOS’ top free app overnight through word-of-mouth.

Earlier this year, Zhang and her co-founders Ben Davenport and Jon Perlow launched a group messaging client called Beluga that seamlessly interlaced chat over push notifications and SMS on Android and iOS. It had thoughtfully designed hooks into the Facebook platform that helped it grow virally on the social network — which is difficult for a mobile app to do considering that there aren’t really effective viral channels on iOS.

Facebook snapped up the team in March before they could seriously consider a Series A round and the Beluga team set out to build a standalone counterpart for the social network.

That’s unusual because Facebook typically picks up a small team of engineers or product managers, puts them through engineering bootcamp and then does some matchmaking to pair them internally with a product team that fits their interests and skills. This often means the acquired company has to abandon whatever they were working on before as an independent startup.

In Beluga’s case, the three co-founders had pretty strong feelings about what they wanted from the get go. From what it sounds like, the decision to go with a standalone Facebook Messenger app was not as top-down as many of the company’s product choices are.

“When we talked to Facebook about the acquisition, one of the things we made clear was that we thought it was very important to create a fast messaging client that was dedicated to messaging,” Zhang said. “It happened that they were very aligned with what we wanted. Mark Zuckerberg wanted to make this a reality.”

>> Read on Inside Mobile Apps.

Android may now be bigger than iOS in terms of mobile subscribers in the U.S. But in so far as app developers are concerned, iPads and iPods are still handing Apple’s platform the lead in terms of unique users.

We periodically look at active usage of Facebook’s various smartphone clients to get some insight into market sizing on top of the statistics that Nielsen, Comscore and companies themselves like Apple and Google publicly report. Not every smartphone user downloads or actively uses Facebook. Nor does the social network have perfect geographic reach as it’s banned or still growing rapidly in some regions of the world.

But Facebook is one of the most broadly accessed smartphone apps in the world and so it provides a window into how many smartphone users are willing to download apps on each platform. The company most recently said it had more than 250 million monthly active users on mobile devices in March. 

So let’s take a look:

iOS-Android Gap Is Narrowing Rapidly

Regarding the iOS-Android horserace, Apple’s platforms is still ahead of Google’s but by a narrower margin than when we looked at it six months ago. Facebook for iPhone has just under 86 million monthly active users to Android’s 54.2 million. Six months ago, it was 63 million Facebook for iPhone monthly active users to 25.3 million Android ones. The Android client is adding 1.8 million more monthly active users a week while iOS is growing at a rate of 1 million per week. The Android app is also stickier with a bigger DAU/MAU ratio (or the fraction of monthly actives that access the app every day).

The difference between these figures and what Nielsen is reporting probably has to do with the addition of iPod Touch and iPad users. Even as Comscore has said in the past that Android has more U.S. mobile subscribers than iOS does, it also reported in April that iOS had a 59 percent larger reach in the U.S. than Android did because of these extra devices.

Regarding both companies’ official numbers, Apple said two weeks ago that it has cumulatively sold 222 million iOS devices. Google said it had seen 135 million Android device activations during its earnings call the week before.

> Continue reading on Inside Mobile Apps.

Mark Zuckerberg confirmed that Facebook had surpassed 750 million monthly active users today at a product launch in Palo Alto.

He said the company had declined to announce it earlier because it’s become focused on other metrics, including how actively users are sharing information.

“Hopefully, we’ll get to a billion at some point,” he said. “I think people generally think that’s going to happen at some point.”

The announcement suggest that Facebook’s growth, at least in terms of raw monthly actives, is continuing at a linear, not exponential, pace. The company has been growing at just under 50 million monthly actives every two months since late 2009. It last said it was at 500 million monthly actives a year ago.

Zuckerberg said he believes social networking is moving into a different era — one that is more predicated on the strength of connections rather than the quantity of users or ubiquity of the technology.

“Social networking is at an inflection point,” he said. “Mostly it was about connecting people and there was still this question about whether social networking was going to be this widespread, ubiquitous service in the world. That chapter is more or less done at this point.”

With Zynga’s IPO filing on Friday, we finally got some numbers to bear out what had been common, but unproven, industry knowledge: that Zynga had been able to overcome handing 30 percent of its revenue to Facebook and weakening virality on the platform by monetizing its existing user base better.

The company appears to have more than doubled average revenue per user across a number of metrics from the first quarter a year ago. So caveat to these figures first: they aren’t perfect estimates since Zynga broke out revenue on a quarterly basis, but showed uniques and actives on a monthly or daily basis. Nor do we have any ARPU figures for individual games, because Zynga did not break out revenue per title in its filing.

But it looks like Zynga boosted monthly ARPU (or average revenue per user) to $0.33 in the first quarter of this year from $0.14 in the same time period a year earlier. We get this figure by dividing reported revenues for that quarter by the number of monthly actives, then dividing again by three for individual months in the quarter.

> Continue reading on Inside Social Games.

Since launching its first native iPhone app in 2008, Facebook has taken an all-in-one approach to building mobile apps with most major features of the site accessible in a single application.

But it looks like that may be about to change with leaked photos of a forthcoming photo-sharing app obtained by TechCrunch, which would push the social network into a competitive, but nascent field of apps like Instagram, PicPlz, Path and Color.

Designing apps around a feature or single behavior represents a sea change in thinking for the company. It’s a recognition that making users do two clicks into the app to access messages, chat or photos introduces too much friction and that apps built around a pared-down set of actions done in 30 seconds or less perform the best. This contrasts with what the company has done in the last few years in trying to put as much of the website’s functionality into its mobile apps as possible.

>> Continue reading on Inside Mobile Apps.

Even though Facebook likely has around 700 million users now, it actually isn’t often that we hear the social network is a major driver for user acquisition in mobile gaming — at least compared to FreeAppADay or having an inside connection to Apple.

But a veteran team from the social gaming world is trying to disprove this with its first app Mob Empire, a Foursquare-meets-Mafia Wars game. CrowdMob, which was co-founded by LOLapps’ former creative director Damon Grow, Alex Han and Matt Moore, is among a handful of startups that are trying to build location-enabled mobile games that are genuinely social.

The app, which the company has intentionally kept quiet about since its April 1 launch, pits friends and strangers against each other in a quest to gain control of venues in their city. The game has a modest number of users at the moment with just over 17,000 Facebook monthly actives on AppData, but that’s because the company hasn’t really publicized it to date. Grow said the company is focused on getting engagement of existing users up and ensuring the back-end can scale before marketing or promoting the title.

> Continue reading on Inside Mobile Apps.

Tagging was arguably the feature that made Facebook the biggest photo site in the world and seeded the idea for creating the platform.

Now the company has finally won a patent for it.

Nearly five years after the company originally filed for the invention, the U.S. Patent and Trademark Office gave Facebook a patent protecting the ability to select a region in a piece of media (like a photo or video) and associate people or other entities with it. Mark Zuckerberg, longtime designer-turned-product architect Aaron Sittig and former Facebook engineer Scott Marlette were credited as inventors.

Zuckerberg has long talked about photo tagging as the innovation that helped him and other early Facebook employees initially conceive of the idea for the platform. The company did a competitive analysis of all other photo products out on the web and while Facebook didn’t offer features like high resolution or printing, it still outcompeted rivals simply because it centered its product around people, and not around technical capabilities. Last year the company said it was seeing more than 100 million photo uploads a day. It has not updated that statistic since.

Because of photo tagging’s initial success, the company started thinking about other products and verticals that could be reinvented around social behavior. When it became clear that with limited engineering resources, the company wouldn’t be able to create every single possible idea on top of the social graph, it opened up the ability for other third-party developers to do so.

The company won one other patent in the last month too: the ability to give gifts in a social networking environment. This one was credited to Jared Morgenstern, who is a product manager on the games team. Gifts were ultimately deprecated in 2010, but virtual goods have become an indirect source of revenue for the company through its currency Credits.

Facebook also applied for four search-related patents in the last month that control how results are shown to users based on their social proximity to the information or how often they access it. All of those patents are credited to Christopher Lunt, Nicholas Galbreath and Jeffrey Winner.