Inside Facebook » Facebook

This week’s headlines from across Inside Network

Kathleen De Vere — Sun, 12 Feb 2012 21:24:43 +0000

A roundup of all the news Inside Network brought you from Feb. 6 to Feb. 12.

Inside Mobile Apps

Tracking the convergence of mobile apps, social platforms and virtual goods.

Monday, Feb. 6

Tuesday, Feb. 7

Wednesday, Feb. 8

Spice Invaders for iOS provides freemium, social spin on tower defense
Emerging free iOS apps: Ski On Neon, Ninja Farm and Hamlet! HD
DeNA shares rally 8.4% as company forecasts rebound in virtual currency revenue
With six recent launches and 60M downloads, Pocket Gems looks to hold onto the top
Google’s AdMob eliminates minimum bids and targeting fees in move toward AdWords-style auctions
New this week on the Inside Network Job Board: Plumbee, Mobile Deluxe, Atari and more
More executive shuffling at EA with departure of CFO Eric Brown
DeNA’s Ngmoco, maker of the Android gaming network Mobage, sees layoffs amid restructuring
Liveblogging Inside Social Apps: Acquiring Users on iOS and Android

Thursday, Feb. 9

Friday, Feb. 10

Saturday, Feb. 11

New this week on the Inside Network Job Board: Atari, Plumbee, Mobile Deluxe and more

Inside Social Games

Covering all the latest developments at the intersection of games and social platforms.

Monday, Feb. 6

Tuesday, Feb. 7

Wednesday, Feb. 8

Thursday, Feb. 9

Friday, Feb. 10

Saturday, Feb. 11

New this week on the Inside Network Job Board: XMG, FunCom, King.com and more

Inside Facebook

Tracking Facebook and the Facebook platform for developers and marketers.

Monday, Feb. 6

Tuesday, Feb. 7

Wednesday, Feb. 8

Thursday, Feb. 9

Friday, Feb. 10

Saturday, Feb. 11

New this week on the Inside Network Job Board: Atari, GREE, Lolgames, more

Facebook IPO filing includes $100M discrepancy

Kim-Mai Cutler — Sat, 11 Feb 2012 01:00:39 +0000

There is a $100 million discrepancy between what Facebook earned in payments revenue and what it paid out to developers, according to revenue figures in its IPO filing last week.

In the filing it says, “In 2011, our Platform developers received more than $1.4 billion from transactions enabled by our Payments infrastructure.”

But based on the company’s $557 million in payments revenue last year and its 30 percent share of transactions on the platform, Facebook should have paid out $1.3 billion at most. There is at least a $100 million discrepancy here. A company spokesperson declined to comment.

There are a number of possibilities:

Facebook may have comped free Credits for some developers.
There may have been initial problems with fraud in the early months of Credits, which the company may have also comped for developers.
Certain developers may have gotten a more favorable revenue share.
Facebook started doing promotions on Credits with 80 percent discounts last November.

Read the full analysis of this issue on our sister site, Inside Social Games.

Facebook tests ‘Add to Map’ prompt on place pages

Brittany Darwell — Fri, 10 Feb 2012 23:56:41 +0000

Some users are seeing an “Add to Map” button in the top corner of Facebook pages associated with an address.

The feature encourages users to make a post that will show on their map and Timeline. Users can set indicate that they visited a place in the past and tag friends they were with. With features and prompts like this, Facebook can get users to fill in their Timelines and provide more information that can later be used to make recommendations or target ads. This is also in line with Facebook’s strategy of making location a core part of its product, not a separate check-in feature as it initially debuted.

Many businesses will benefit as more people share where they’ve been. Having users see that a friend or several friends have been to a place can be very valuable. With time, Facebook is likely to play a larger role in providing social recommendations for people to discover new places and decide where to go.

See the following screenshots for a look at how “Add to Map” works. When users click the Add to Map button, a publisher window pops up. Users can write a post, set the date, tag friends and select who can see the post.

“Add to Map” changes to “Mapped” and users can click to see the post on their map.

The post shows up on the map as other location posts do.

And the action is mentioned in the recent activity section of the user’s Timeline.

Blogging Inside Social Apps: Social Game Marketing and Performance Advertising on Facebook

Brittany Darwell — Fri, 10 Feb 2012 18:09:06 +0000

Analytics and Open Graph were big topics of discussion during the “Social Game Marketing and Performance Advertising on Facebook” panel at the Inside Social Apps Conference in San Francisco on Thursday.

Ifeelgoods Co-founder and VP of Business Development Suchit Dash, AdParlor CEO and Co-founder Hussein Fazal, Kontagent CEO and Co-Founder Jeff Tseng and TBG Digital CEO Simon Mansell joined moderator AJ Glasser for the talk.

The panelists addressed the issue of game developers focusing on cost per install rather than more long term return on investment. Tseng, of analytics provider Kontagent, said it’s more important to optimize lifetime value over acquisition cost. Mansell, of Facebook ad agency TBG Digital, said many developers aren’t tracking ROI by segment, which makes it more difficult to optimize campaigns properly. Fazal, of AdParlor, said his company stresses analytics.

“We don’t like to work with a client unless they have analytics in place,” he said. “They don’t understand the value that we create because they’re not looking at the right numbers.”

Fazal and Mansell said it is too early to know what to make of Facebook’s beta test allowing advertisers to target by Open Graph activity. For example, an ad can be directed to people who read a book or watched a show.

“Our clients are quite excited to target around the play action,” Mansell said, but he noted that the API documentation on the issue is unclear. “I have a 121-person advertising company and it’s confusing for me. I’m hoping Facebook will make that more simple.”

Mansell and Fazal agreed that Open Graph does not yet have enough scale to understand how it might be an improvement over targeting by interest.

“First actions need to pick up,” Fazal said. “Developers need to create more actions.”

Fazal said Facebook should also give third-party ad providers access to pages and apps so they can better track how ads perform. He’s also frustrated with Facebook policy that prevents his company AdParlor from working with Tseng’s analytics company Kontagent to get data about user activity in apps.

“Facebook needs to leverage us [third-party partners] as much as possible,” Fazal said. “They’re understaffed for the amount of business that they’re doing.”

Mansell said he wants to see Facebook support the Open Graph verb “play” they way it has with “read,” “watch” and “listen.”

“That [playing games] is what a lot of people are going to Facebook to do,” Mansell said. “For Facebook to get users used to different verbs would be good.”

Blogging Inside Social Apps: The Future of Mobile App Discovery on Facebook

Brittany Darwell — Fri, 10 Feb 2012 00:14:24 +0000

Ondrejka emphasized the value of building HTML5 apps that users can access from any device and how integrating Open Graph will allow users to share their activity without interrupting gameplay.

Ondrejka revealed that half of Facebook’s mobile traffic comes through the mobile website and the other half comes from native applications. He said that the company spent much of 2011 improving its mobile touch site and integrating web technology in its native applications. For example, the iOS and Android apps now pull News Feed stories directly from m.facebook.com so Facebook’s engineers can push design and backend changes without a software update.

“The trend of wanting the web to work really well is something that’s happening,” Ondrejka said. “It’s incumbent on us to write good code, show good examples and make it easy to integrate.”

Although Ondrejka encouraged HTML5 development for cross-platform access, he acknowledged that some apps will require advanced capabilities that are only possible as native experiences. Still, Facebook’s distribution channels function the same for web and native apps.

“The important thing about our platform at this point is that we want all of these to integrate with Open Graph,” he said.

Because the company filed for an initial public offering last week, Ondrejka was unable to discuss possible plans for advertising apps within Facebook’s mobile experiences. He instead focused on the organic channels that are available to mobile developers: Open Graph activity in News Feed and Timeline, app bookmarks and requests.

Facebook apps can now publish continuously to Timeline and Ticker, which Ondrejka said will improve the gameplay experience. The strategy seems to be increase engagement by making games more enjoyable and organic discovery will follow.

“What Open Graph allows you to do is share in this non-interruptive way without saying ‘Hey, player, stop playing to issue a request’ I hope it opens up game design as broad as on other devices,” he said.

Ondrejka cited Pinterest and Washington Post Social Reader as good examples of how mobile apps can utilize Open Graph for discovery.

Facebook shares climb 10% in private auction to $103B valuation

Kim-Mai Cutler — Thu, 09 Feb 2012 05:39:09 +0000

Facebook’s shares climbed 10 percent from a week ago in a private auction that valued the company at $103.4 billion. SharesPost, which arranges sales of shares in privately held companies, said it completed an auction of 150,000 shares of Class B stock today at a clearing price of $44. That’s up 10 percent from a week ago, where shares cleared at $40 with a $94 billion valuation.

Facebook may raise around $5 billion after filing for an initial public offering last week. While we don’t know what the ultimate market capitalization will be, the fact that the shares cleared at a valuation of more than $100 billion suggests that demand may be strong enough to push the company beyond the previously expected range of $75 to $100 billion.

A $103.4 billion valuation would give Facebook a PE ratio of more than 100 and put it at 27.9 times trailing twelve-month sales. Facebook had a net income of slightly more than $1 billion on revenue of $3.71 billion in 2011.

We based the valuation upon a fully diluted share count of around 2.35 billion, which is what Bloomberg used when it reported a similar auction a week ago that implied a $94 billion valuation.

They based it on 117.1 million of Class A shares, 1.76 billion of Class B shares and 380 million shares subject to restricted stock units that were outstanding at the end of last year. Facebook’s chief executive Mark Zuckerberg also plans to exercise his options and purchase 120 million in Class B shares. There are also 138.5 million shares that are issuable under other options. The share count during the actual initial public offering will likely shift a little from what is projected now.

Liveblogging Inside Social Apps: Social Apps for Marketers and Brands, Maximizing Audience Engagement

Brendan Irvine-Broque — Thu, 09 Feb 2012 02:03:23 +0000

We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference. The final panel of the day focused on how marketers and brands can use social apps to maximize audience engagement.

Joining moderator Josh Constine, of Techcrunch, were Context Optional CEO Kevin Barenblat, Buddy Media Senior VP Carla Bourque, Facebook Page Product Manager Russ Heddleston, Starz Media VP of Digital Media David Katz, Hearsay Social CEO and Starbucks Board Director Clara Shih.

All of the panelists agreed that building mobile experiences and applications is becoming increasingly important for brand marketers. Shih, of Hearsay Social, and Barenblat, of Context Optional, said that developing application experiences that involve the user being physically present at a retail store have potential for both marketers and developers. Bourque, of Buddy Media, said her company’s mobile focus was primarily on enabling social commerce at scale and driving conversions.

While panelists agreed that building applications for mobile will be increasingly important, their take on building Open Graph applications was mixed. Shih, of Hearsay Social noted that for lifestyle brands, Open Graph represents a significant opportunity because of its ability to connect identity to brands and products. For small or local brands and companies, or those outside of the lifestyle space, Open Graph might not be a good fit. The consensus was that developers and marketers should focus on testing new ideas and generating success at a small scale in order to demonstrate impact, and build upon that.

When asked about the future of page tab applications, and whether they will become mobile compatible at some point in the future, Heddleston, of Facebook, did not make any definitive statement. He reinforced the importance of mobile in Facebook’s overall strategy and noted, “We haven’t yet come out with a separate solution for tab applications for mobile, it’s something we’re looking into, and something that would make sense.”

The panelists discussed some of the factors that go into deciding whether businesses should develop custom applications for their page or work with platform templates. The general consensus was that custom development might not be cost-efficient for some companies, but business objectives should ultimately drive the decision. Shih, of Hearsay Social, said that she’s seen a 50-50 split among larger clients — half begin with a template from Hearsay’s app gallery and half are completely custom experiences developed by another digital agency.

As far as brand integration within existing apps, such as popular social games, the panelists emphasized how distribution and engagement are key things brands should look for before spending money on placement. Katz, of Starz Media, said he especially looks for examples of what an app developer has done before and wants to know that a company has delivered results for similar brands in the past.

60 million monthly users engage with apps on Facebook mobile platform; average 5 times per month

Brendan Irvine-Broque — Thu, 09 Feb 2012 01:23:13 +0000

Facebook Director of Product Management Carl Sjogreen revealed that more than 60 million monthly users engage with mobile applications via Facebook, 320 million times per month since the mobile platform launched in October 2011. Sjogreen shared this statistic during a fireside chat with Founder of Inside Network Justin Smith at the Inside Social Apps conference in San Francisco.

[Update 2/9/12 12:47 p.m. - An earlier draft of this story was unclear that the 60 million users who engage with apps on Facebook's mobile application are monthly active users.]

This means that 60 million users navigate to either mobile web or native applications that integrated with Facebook each month, and these users engage with apps roughly five times per month. With 425 million monthly active users who access the social network via mobile, this also means that roughly 14 percent of Facebook’s mobile users engage with third-party apps directly from the mobile platform. The company has not offered numbers on how many of its 425 million mobile users have smartphone devices that are capable of running third-party Facebook apps.

When asked about the value proposition of HTML5 to application and app developers, Sjogreen said, “We don’t really care whether developers build for mobile web or native apps,” noting that in his view, the decision is not either-or. Instead, Sjogreen made the point that ”The people you want to play with trump whatever the platform the app is on. If your fundmental gameplay revolves around interacting with friends, then being cross platform is really important.”

Many developers face a dilemma. They can develop native apps for iOS and Android, which can include advanced functionality and graphics, but are often more costly and difficult to maintain. Alternatively, developers can build HTML5-compatible mobile web applications, which lack some of the advanced features of native apps, but can accessed on any platform, which significantly reduces development costs and enables all users to access their apps.

Sjogreen’s comments reinforce that Facebook will support all developers, but emphasizes cross-platform compatibility as an increasingly important factor to consider. This makes sense in the context of building social applications where users interact with friends across different platforms and devices. For app distribution and notifications through Facebook to work effectively for users, apps need to be accessible on whichever device an individual is using at the moment they receive a notification or see activity in News Feed or Ticker.

For more coverage of Sjogreen’s fireside chat from Inside Social Apps today, see our liveblog summary here.

Liveblogging Inside Social Apps: Facebook Platform Roadmap in 2012

Brittany Darwell — Wed, 08 Feb 2012 22:52:34 +0000

We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference. Founder of Inside Network Justin Smith sat down with Facebook Director of Product Management Carl Sjogreen for a fireside chat called “The Facebook Platform Roadmap in 2012.” With the company filing for an initial public offering last week, Sjogreen was unable to share too much about the future of monetization the platform, but he provided insight on the state of Open Graph, mobile and games on Facebook.

The following is a paraphrased transcript of the discussion.

Justin Smith: It’s been a few months since the announcements at f8. Take us through the new changes.

Carl Sjogreen: There are basically three major areas Open Graph, mobile and games. Open Graph sounds sort of abstract so it’s useful to talk about what the product is and how we built it. The point of Open Graph for the everyday user is to enrich Timeline. Facbeook is more interesting for you and for your frends if not just what you do on Facebook. OG has potential to

Justin: Historically apps that have monetized well have been games. Most of what we’ve seen in Timline/Ticker format have been media focused. Could you talk about your vision for the opportunities there?

Carl: At f8 we launched with dozens of partners with news, music, etc. What you’ve seen from Open Graph so far is a small part of the vision. In the past, a lot of time and energy for developers has been spent figuring out what are the channels and how do I use them? You needed to have a Ph.D in Facebook to be successful in building an app on the platform. We want people to build fun games, awesome social music applications, cool ways for people for learn about fashion from their friends. With Open Graph you just share the activity that’s happening in the application and that just sort of lights up the Facebook environment.

Justin: Over the past few years there have been a variety of iterations of distribution channels and notifications. Do you think it will be more oriented around Ticker in the future?

Carl: There definitely ways to optimize Open Graph distribution. How you generate stories, how they aggregate together. More sturctured information leads to more interesting stories. We want to move to a model where fundamentally the integration point in the app is to take the action and add it to Facebook in a structured way. Then we can take that structured data and create a more structured representation of the core activity within an application. Instead of making a post to News Feed and nowhere else. By connecting application activity with Facebook, we can turn on Ticker, Timeline and whatever we come up with next. We’re really in early days with this. We’re still trying to figure out what are all the right tools for developers. We want it to be a simple process for developers. For users, it’s about creating a rich, immersive experience to fill in Timeline with the things you care about.

Justin: How does Open Graph affect the game developer community?

Carl: One of my favorite examples is Words With Friends. It now shares all the words I play without interrupting me with a dialog. I think the potential for games is huge. One of design centers of Open Graph is that we want people to build great apps, and by simply adding the actions users already take within apps into Facebook. So you have to think like a user, ”what are the things you’d want to show off on Timeline, show off to your friends, what are the things you want to share?” Those are great things to enable with Open Graph because it makes Timeline richer.

Justin: How much time is spent thinking about games versus other types of apps at Facebook?

Carl: Games are the shining example of how social by design can be transformative for an industry. We want to help games reach the audience that’s right for them. We want to drive engagement and help application partners grow. What’s good for them is good for us. Games are really important. Open Graph and mobile are the new channels and technology platforms on which games can be successful and opens up new categories of apps.

Justin: So games discovery is treated like any other app?

Carl: We have a whole team focused on the needs of games and making sure that canvas apps are doing well. We’ve added a dedicated games unit on Timeline. We’ll expand that over time to become most compelling place to talk about the games that you play.

Justin: Earlier in the day we had CEOs of some of the top game companies express concerns about Facebook thinking about things instead of games. What are your thoughts on that?

Carl: It’s absolutely not true that we’re investing in one at the expense of the other. There are some people on Facebook who love games and whose Timelines would be incomplete without games activity. But some people would much prefer to have apps about food they ate, music they listened to, runs went on. In order for Timeline to be complete, we need to be broader than that.

Justin: Open Graph allows new types of connections between people and objects. How will those different connections be used in the future.

Carl: You can create an Open Graph connection that represents neighbors in CityVille. You can create whatever connection makes sense to you. It’s still the early days with this. We’re trying to figure out which is most meaningful for distribution for developers. We tried to take an open approach. You can add to the graph with whatever activity that works for you. Over time we’ll look at meaningful connections. It’s early to be coalescing now, but that’s what will go on.

Justin: How will the best games look going forward with Open Graph?

Carl: My biggest frustration with games — and this is because of the way the Facebook platform had been working — is that I’m constantly interrupted with dialogs to post to News Feed or send a request to friends. As someone who likes a game, I want to express that activtiy to my friends, but I don’t need to be interrupted every time to share that activity. With Open Graph there’s an opportunity to figure out what are the stories people want to share.

Justin: How does real time discovery factor into Timeline and Ticker?

Carl: Timeline and Ticker are opposite ends of the spectrum. Timeline favors long term activity, like the artists I listened to the most this month. Ticker and News Feed are about what’s happening right now in my friends circle. Within Ticker we launched a “listen together” feature. That’s exactly the real time serendipitous experience Ticker was meant for. Timeline is about telling bigger stories, are you a traveller, a chef, etc.

Justin: Let’s talk about the mobile web platform. What are the results you’re seeing and how do those match your expectations?

Carl: 60 million people have engaged with apps on the mobile platform 300 million times a month. That’s a level of success in first few months. Overall we have 845 million users visit Facebook every month, over half on a mobile device. So we are taking all communication channels that made the web platform what it is and brought it to mobile. I think it’s the least understood aspect of what we do and the most underappreciated opportunity. This is where lots of people are engaging on Facebook.

Justin: How does mobile app engagement compare to engagement on desktop?

Carl: I think the core dynamics are the same. You see some activity about apps your friends are using and click through. On mobile we have some push notifications for invitiation requests. And there’s bookmarks. Bookmarks don’t feel that sexy, they’ve been around long time, but they’re an important rengagement factor. Millions of people go to the Facebook app first thing everyday. With bookmarks down the side, it’s a way for applications to reengage after they’ve been installed. When you navigate from profile to News Feed and see those bookmarks, it’s a powerful reminder.

Justin: What are milestones you’re looking at for mobile success?

Carl: We’re looking at users that engage with an app every day or every month. Fundamentally success means mobile apps that are awesome high quality that have grown dramatically because of Facebook. That’s qualitatively how we’ll know we’re really successful. We’re also looking for breadth too. There is an app that all 845 million Facebook users should be using, but it might be different for each one. With Open graph apps, a lot of them are mobile. Pinterest had over a million users who have enabled mobile Timeline integration.

Justin: For a lot of the game developers here today, HTML5 is one of the more experimental aspects of their business. What is your pitch to them?

Carl: I think we’re misunderstood there. We want every app to be integrated with Facebook. For some apps it makes total sense to be native apps. For others it makes sense to be cross-platform with HTML5. To us, we don’t really care. We want to help them all be better through integration with Open Graph. All of these means for distribution and discovery work just as well for HTML5 and native apps.

Justin: What are the principles developers should be looking at for making that decision for themselves?

Carl: Something that’s obvious in retrospect, but was more subtle when I started thinking about it is looking at addressable market in each of those platforms. So, I want to play Words With Friends with my mom, but I don’t care what platform she’s on. It just matters to me that she can play it too. The people you want to play with trump the platform the app is on. If your fundmental gameplay revolves around interacting with friends, then being cross playform is really important. Others that are more graphics intensive or that use native hardware like camera, it clearly makes sense to be native. You make the choice on attributes of your application and how important is it to be cross platform.

Justin: In the early days of the Facebook platform, there were link exchange type services that helped shuffle traffic around. Do you think there is a role for third party distribution on the web or mobile?

Carl: Discovery of mobile applications is an interesting problem we’re trying to address. On the web it has largely been social cues — what your friends are playing — that are really improtant. I think we’re really well positioned. That’s fundamentally what our platform is about.

Justin: Lastly, with the changes in Timeline and Ticker, how will that affect applications that work on pages? Lots of business are investing a lot in page applications, how does this affect them?

Carl: A lot of the same tenants apply to applications for pages as well. If you can build experiences to tell your story, fill out Timeline. There is a lot of opportunity for page developers as well. I don’t think we have any plans to change how applications integrate with pages.

Facebook appends its 2005 stock plan to its IPO filing in new amendment

Kim-Mai Cutler — Wed, 08 Feb 2012 22:36:27 +0000

Facebook added a horde of documents to its filing for an initial public offering, including a copy of the 2005 stock plan.

There are also some offer letters to executives, the five-year agreement with Zynga and an agreement from 2010 with Russia’s Digital Sky Technologies when the late-stage investment firm held an 8.2 percent stake in the company.

Perhaps the most interesting thing though is a copy of the 2005 stock plan. In there, you can see how options and restricted stock units for the company were structured.

The Zynga-Facebook agreement is the exact same one the gaming company appended to its IPO filing last year. The redactions are the same.

The only interesting thing about the DST document seems to be that the firm agreed to a longer lock-up period than other investors. They will hold shares as long as 18 months after the IPO, which is longer than the 90-day period afforded to early investors, and then the six-month period for employees. It’s another concession from the Russian firm, which has a reputation for getting into choice deals because it moves fast and gives up trappings that more traditional venture firms ask for like board seats and liquidity preferences.

There’s also a document with a list of subsidiaries including Facebook Ireland Limited (Ireland), which I understand handles revenues through the European arm of the business. Then there is a subsidiary called Vitesse, which was an entity that helped build out the data center in Prineville.

We’ll be updating as we go. Today is our once-a-year Inside Social Apps conference in San Francisco, so apologies if updates are intermittent.