Facebook generates $1.21 per user on average worldwide in Q1

Facebook made an average $1.21 per user between Jan.1 and March 31 — a 6 percent increase from the first quarter of 2011– according to an updated filing with the Securities and Exchange commission.

The social network today reported revenues of $1.058 billion for the first quarter of the calendar year. That’s a 45 percent increase from the first quarter last year, but 6 percent less than the previous quarter. It also revealed it had 901 million monthly active users and 526 million daily active users as of March 31 — a 33 percent increase in MAUs and 41 percent increase in DAUs year over year.

Facebook reported that average revenue per user increased across all geographies, but it is also beginning to better monetize outside the U.S. In this most recent quarter, 50 percent of the company’s revenue was generated by users in the U.S. and Canada. That’s down from 2 percent from 2011 and 8 percent from 2010. Facebook notes that revenue growth particularly picked up in Germany, Brazil, Australia and India.

Facebook attributes the slight decline in revenue this quarter over last to seasonal trends. Advertising spending is typically highest in Q4 as a result of the holidays and companies using up their remaining budgets. At the end of February, Facebook introduced a number of new premium advertising options, including logout page ads, Reach Generator and Sponsored Stories that appear in the mobile News Feed. The effects of those products on revenue likely won’t be seen until next quarter, if not the end of the year.

The social network also updated its daily engagement statistic to 3.2 billion Likes and comments per day. In Q4 2011, the social network was generating 2.7 billion Likes and comments per day. It noted that there were 488 million users engaged with Facebook mobile products in March 2012. This is up about 13 percent since three months ago.

Facebook is expected to make its initial public offering on the NASDAQ in mid-May.

Facebook expands arsenal with 650 patents from Microsoft, license to hundreds more

Facebook will purchase about 650 former-AOL patents from Microsoft for about $550 million, the company announced today.

Microsoft took over 925 U.S. patents and patent applications from AOL earlier this month, along with a license to about 300 additional patents that weren’t for sale. Now Facebook will take ownership of a majority of those patents and retain a license for the remainder of the portfolio. These patents could aid Facebook in two infringement suits it is currently engaged in with Yahoo, and could protect the company from future intellectual property disputes.

Facebook did not provide details on which patents it acquired from Microsoft, but they are likely related to social networking, messaging, advertising, privacy and customization, which are the key areas Yahoo is targeting in its lawsuit against Facebook. The social network is also involved in a counter-suit against the portal company.

Building an arsenal of patents could also be useful in preventing litigation with other companies. In March, Facebook bought 750 software and networking patents from IBM for an undisclosed sum. Before that, the social network had only 56 patents and 503 applications in the U.S., according to a regulatory filing.

Yahoo’s attacks raised issues in the tech community about how and when patents should be exercised. Many saw Yahoo’s suit as a cheap shot against a pre-IPO Facebook, not unlike the one Yahoo brought against Google just before it went public. As such, Facebook’s countersuit seemed positioned as a statement about the frivolity of patent litigation. And last week, Twitter promised it would only use patents defensively, unless the company acquires permission from the inventor to legally apply the patents otherwise.

Under the agreement announced today, Microsoft will retain ownership of about 275 AOL patents and applications, a license to the 300 patents AOL did not sell in its auction this month, and a license to the 650 patents and applications Facebook now owns. This is yet another extension of a long partnership between Facebook and Microsoft. The corporation was an early investor and advertising provider for the social network. The companies now offer integrated services through Bing, Skype, Office and other features.

Facebook updates Android app, adds new shortcuts to take over more of users’ homescreens

Facebook released an update for its Android app on Friday that includes additional messaging features and a shortcut to encourage users to take and post photos with Facebook.

After downloading Facebook for Android 1.9, users will have two new icons on their homescreen — Messenger and Camera — in addition to the icon for the main app. This seems to be a strategic move by Facebook to maintain relevance on Android. By owning the mobile operating system, Google can integrate its Google+ social networking features into users’ phones in direct ways Facebook can’t. For example, photos and videos from an Android phone are automatically uploaded to a user’s private album on Google+.

Facebook, which thrives on photo sharing, has responded with a camera shortcut. With one tap, Android users will be able to pull up Facebook’s camera feature to take a photo or video to share with friends on the site. After capturing a moment, users tag their friends and location, in addition to adding a caption and managing privacy settings.

The updated app also includes a shortcut to Facebook’s messaging and chat features, again as a way to capture users who might otherwise turn to Google-owned apps for conversations. Facebook already offers a standalone app called Messenger, but now Android users will have an additional Messenger icon on their homescreen, also known as the app tray. The latest improvements to Facebook’s native messages product make the standalone app redundant. Group messages, location-sharing, online status and having contacts sorted by frequency of interaction are all features once exclusive to Messenger that are now part of the general Facebook app. The social network might decide to discontinue development of the standalone Messenger for Android and focus on the main app.

Android users can download the Facebook app, which also includes a number of bug fixes and faster performance, from Google Play.

Images from Facebook.

Facebook modifies proposed changes to terms of service, provides explanations in response to user feedback

Facebook today released a new set of proposed changes to its terms of service and offered more detailed explanation of its revisions based on user feedback.

Since 2009, the social network has taken a unique approach with its “Statements of Rights and Responsibilities,” which is what it calls its terms of service. Before instituting any new policies, the company shares proposed changes with users, who then have a period of time to comment and ask questions. In some cases, Facebook even puts issues up to a vote.

Most recently, the company made edits and offered answers to questions related to a draft of a new Statement of Rights and Responsibilities it presented in March. It clarified the following points, among others.

  • Some of our users and a number of journalists mistook the proposed update to our SRR for changes to the way we collect or use data. Our Data Use Policy (which used to be called our privacy policy) governs how we collect and use data. We are not proposing any updates to that document at this time. Instead, we proposed some mostly administrative and clarifying changes (e.g., “profile” to “timeline”) to the SRR.
  • Some of you wanted us to explain further why we made a change from prohibiting “hateful” content to “hate speech” in Section 3.7. We think the term “hate speech” better captures our policy on prohibited content, which hasn’t changed. Sometimes discussions on Facebook include controversial content – even content that someone may view as “hateful.” While we allow discussion of controversial ideas, institutions, events, and practices, we do not tolerate hate speech.
  • Some users had questions about the addition in Section 5.9 of the language that says that you will not “tag users if you know they do not wish to be tagged.” To be clear, we are not changing how tagging works. This language reflects, and was meant to reinforce, our long-standing principle around tagging – you shouldn’t tag someone that you know ahead of time does not want to be tagged. In response to your comments, we have replaced the original change with new language to highlight how you can provide feedback about tagging.
  • We are not creating profiles of non-users. There are lots of instances where we would want a non-user who interacts with Facebook to be subject to our terms. For example, if a third party is on our site but is not a user, they are not permitted to scrape users’ content or information as specified in Section 3.1. Just because someone doesn’t happen to have a Facebook account doesn’t mean they should be free to do whatever they want with the service or our users, and we wanted to make that clear.
  • Section 13 is a new addition to our SRR. Many users asked us why we added it. As you know, Facebook is constantly releasing new products. We want to make sure the products you use are the most current versions. We have added this provision to notify you that we may provide upgrades and updates to your downloaded products as they become available.

Users can visit the Facebook Site Governance page to review tracked changes to the rights and responsibilities document, and provide feedback in the comments section here. The comment period will end April 27 at 5 p.m. Pacific Daylight Time.

Facebook bug temporarily brings down apps, social features on third-party sites

Thousands of Facebook applications and third-party sites that utilize the social network’s login capabilities experienced a two-hour outage last night.

An issue with Facebook’s central JavaScript files prevented apps and some aspects of Facebook-connected sites from loading. Although the bug was reported and resolved within two hours, developers might notice a temporary dip in their apps’ usage for Thursday.

A user filed a bug report about the JavaScript issue, noting that all Zynga games were down, at 7:41 p.m. Pacific Daylight Time. Facebook acknowledged the service disruption at 8:30 p.m. on its platform status page, and declared the issue resolved at 9:55 p.m.

The incident is a reminder for the many developers that depend on Facebook for login and other features how their businesses can be affected when the platform experiences outages. The social network’s vision is to have all websites and applications integrate its Open Graph, but the more companies do so, the more critical it becomes to keep the platform stable and prevent issues from affecting users and developers globally. These types of disruptions will come under additional scrutiny after Facebook becomes a publicly traded company, as it is expected to this summer.

Thanks to Louis Goddard for the tip.

Facebook expands capabilities for feature phones, adds support for pages and places

Facebook recently updated its feature phones mobile app to allow users to interact with pages and check into locations, according to posts on the company’s Facebook for Every Phone page.

Facebook for Every Phone” is a native mobile app compatible with more than 3,600 different Java-enabled feature phones. Previously, the app included the ability to upload photos, read News Feed, view profiles, check messages, see event invites and take other basic actions with your friends, but it did not support fan pages or check-ins.

Now these users can Like pages, view their friends’ Likes and see posts from pages they Like in their mobile News Feed. They can also share check-ins along with a status. Users cannot yet share photos with location information or tag other users in a check-in. Still, these are powerful features for a large demographic of users who do not have smartphones or — as is the case for many users in developing countries — personal computers.

As of Dec. 31, 2011, Facebook for Every Phone had 39.7 million monthly active users, according to AppData. Facebook no longer provides daily or monthly usage data about its native apps, but it’s worth noting that the Facebook for Every Phone fan page has more than 75.9 million Likes. Users are given the option to Like the page when they first log-in using the app, a company spokesperson tells us. Despite only being launched on Jan. 20, Facebook for Every Phone is now the most-Liked page on the site, beating out the general Facebook fan page and pages of popular celebrities, according to our PageData service.

It’s important for Facebook to continue to improve its offerings for feature phones and the mobile web, not just iOS and Android apps. As the social network grows in markets like India and Africa, where users are primarily accessing the site through feature phones, the company needs to continue to offer new features as it has done to increase engagement among desktop and smartphone users. Pages and location sharing are ways for users to interact with entities besides friends. These features are also related to monetization, since they allow Facebook to collect additional data about users’ interests and offline behavior so that it can deliver relevant ads to them in the future.

Facebook initially overhauled its app for feature phones in January 2011, in partnership with Snaptu. It then acquired the Israeli startup three months later and rebranded the feature phone app as Facebook for Every Phone in July 2011. The app included new features, and Facebook made deals with carriers to offer users 90 days of free data access. The app was designed to require less data transfer than mobile sites or Java apps, so low costs likely encouraged users to pay for access after the free trial expired.

BranchOut raises additional $25M for professional networking app

BranchOut, a professional networking app built on top of Facebook, announced today that it raised $25 million in a Series C round lead by Mayfield Fund.

The app lets users organize their professional connections, see which friends have worked at companies their interested in and search for jobs. Launched in July 2010, BranchOut is growing faster than ever since the release of its Open Graph integration that posts users’ activity to Timeline, Ticker and News Feed. The canvas app passed 13 million monthly active users earlier this week, up from 1.2 million when the integration launched in January. The first step when users log into the service is to add connections and invite friends. BranchOut says it has more than 25 million total registered users.

A mobile web app launched by the company in December is another key driver of growth. BranchOut says it now accounts for 40 percent of total traffic. Users can access the app by searching for it on Facebook from iOS or Android devices.

BranchOut is one of several rapidly growing companies leveraging Facebook’s social graph, and it is looking increasingly like a future competitor to LinkedIn. To use BranchOut, users must connect with Facebook. This tends to mean connections are personal, as well as professional, which is useful considering how many people find new jobs in part because of introductions from friends and family.

“I think all networking, professional and social, will happen on Facebook,” BranchOut founder and CEO Rick Marini told us in May last year. “It’s your true support network, the people who will really help because the strength of connection is really strong.”

BranchOut monetizes by selling job postings and a more comprehensive employee search product called RecruiterConnect. The company now has a total of $49 million from investors including Accel Partners, Norwest Venture Partners and Redpoint Ventures. BranchOut says it will use the investment to help expand its current staff of 45 full-time employees.

Facebook establishes Preferred Marketing Developer program with 232 companies providing tools and services

Facebook today officially introduced its Preferred Marketing Developer program with 141 new partner companies.

The PMD program combines the Preferred Developer Consultant and Marketing API programs to create a unified certification process for companies that build marketing tools on top of the Facebook platform. Partners will receive badges based on their qualifications in page management tools, ad management tools, app development and insights products.

This change will help brands, agencies and others navigate the growing ecosystem of companies selling software and services related to Facebook marketing.

Facebook includes 232 companies based in 35 countries in its program. People looking for one of these tools or services can use an improved directory that includes new filters for type of business model and customers they serve. (See right.)

Companies in the PMD program get additional support from Facebook platform representatives, but generally do not get early access to features. Some PMDs are invited to participate in beta tests, but doing so requires developers to complete a number of tasks and provide required feedback. If they don’t, they can be suspended from future beta tests for 90 days.

Facebook first announced that it would bring its preferred developers and Ads API partners under a single program in November 2011. Last month we learned details about the four categories Facebook would assign badges for. Before today, there were about 90 preferred developers and 50 Ads API partners providing managed services and software tools to help businesses create and optimize campaigns on the site. When the program launched in 2009, only 14 companies were included.

Developers can learn more about the program and apply here.

Facebook ad reporting change aims to help advertisers optimize campaigns for actions beyond Likes

Advertisers will soon be able to measure a wider range of actions that consumers take after seeing an ad on Facebook, including comments, shares, app use and Credits spent, according to a spokesperson from the social network.

Previously, it had been difficult for marketers to understand what sort of effect their ads had beyond building a fan base since Facebook did not provide information about what users did after they clicked on an ad. This change seems to be part of a continued push to de-emphasize Likes as a campaign goal, and instead encourage marketers to focus on engagement within the platform.

Despite the new wording, today’s announcement does not mean Facebook will begin selling ads on a cost-per-action basis. Based on mock-ups provided by Facebook, advertisers will see a new metric in the ad dashboard called “actions” in place of what had been called “connections.” For example, with a page post ad — those derived from posts a brand made on its fan page — advertisers will now be able to see a breakdown of how many Likes, comments and shares the post received from users who saw the ad (see example below).

Under the old system advertisers could only get data about the number of people who Liked the page as a result of the ad. They could visit a separate page insights dashboard to see the total Likes, comments and shares for a post, but there was no way to distinguish which actions came organically versus through paid media. This latest change helps close that gap and could be particularly useful for Ads API partners that help advertisers optimize their campaigns. Facebook also tells us that developers will be able to measure and optimize for actions within their apps, including making purchases or any other Open Graph action. Advertisers will define what actions they want to optimize for through the API, and this could later be added to the self-serve tool, similar to what we saw in a beta version that Facebook has been testing.

Facebook becomes No. 1 most visited site in Brazil, according to Experian Hitwise

For the first time, Facebook is getting more visits in Brazil than Google and all other sites on the Internet, according to data from Experian Hitwise.

Facebook initially surpassed Google Brazil on April 1, and has had the lead four other days since then. On Sunday, the social network accounted for 10.98 percent of visits across the Internet in Brazil. The search engine dipped to 10.55 percent that day. The stats represent major growth on Facebook’s part. In six months, the site has experienced a 5.3 percentage point increase in share of visits in Brazil — a nearly 87 percent relative increase, as shown in the graph below.

Facebook officially passed Orkut as the most popular social networking site in Brazil in January, according to Hitwise. Facebook says it had 37 million monthly active users in Brazil as of Dec. 31, 2011, an increase of 268 percent from the prior year, according to a filing with the Securities and Exchange Commission. Because of Brazil’s size — it is the fifth most populous country in the world– it remains a large source of future growth. Facebook estimates that it has only 20 to 30 percent penetration in the country.

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