Facebook Roundup: Sandberg, Syria, Underage Users, Promotion Guidelines, LinkedIn, Winklevoss Twins and More

Facebook COO Sandberg Profiled – Facebook’s Chief Operating Office Sheryl Sandberg is profiled this week in Bloomberg Business week. The article describes how her steady leadership has helped Facebook monetize. It also mentions that she may be more conservative towards entering China than CEO Mark Zuckerberg. [Image via Facebook]

Facebook, Syria Butt HeadsFacebook shut down the Syrian military’s Page recently because it called for spamming of politically opposing Pages. Then it appeared the Syrian government tried to launch cyber, man-in-the-middle, attacks on Syrian Facebook users.

7.5M Facebook Users Under 13 – Facebook’s minimum 13 year age limit is being flaunted by 7.5 million users, according to a survey from Consumer Reports.

Facebook Reiterates How Developers Can Keep Users Safe - Following claims of new security risk, a post to the Facebook Developers Blog explained how developers can assist its efforts to protect users by acquiring an SSL certificate (which will be mandatory starting October 1st), reviewing the updated authentication and OAuth 2.0 guide, and complying with its Platform policies. It also mentioned that the company is working with other web giants including Google, web browser vendors and the National Institute of Standards and Technology on several web security initiatives.

Facebook Patents Info Sharing – A Facebook patent was published recently, the “Controlling Access of User Information Using Social-Networking Information” patent covers the degrees of separation between people controlling whether different social networks can access information from other networks.

LinkedIn to Raise $274M – LinkedIn is set to offer 7.84 million shares to the public to raise an estimated $274.4 million. The shares are priced between $32 and $35 dollars and LinkedIn will take $146.6 million of the money raised.

Facebook Makes Minor Changes to Promotion Guidelines - As of May 11th, promotions, contests, and sweepstakes on Facebook may no longer use the Like button, comments, or other Facebook features as voting mechanisms, impacting some developers such as Offerpop. Also, promotions may only include Facebook’s names, trademarks, etc in disclosures, not in contest instructions.

Winklevoss Twins Get Sued – In a twist of fate, the Winklevoss twins who have been suing Mark Zuckerberg for several years, are being sued by a software developer in Boston. Wayne Change wants a piece of the twins’ $65 million Facebook settlement for work he did for the twins’ original Facebook rival, ConnectU.

Facebook’s User Info Suit Continues – A lawsuit in which Facebook was accused of sharing user information with third-party advertisers was partially dismissed. The plaintiffs still have a chance to sue Facebook.

Airbnb Takes to Facebook – Airbnb, a global home rental service, implemented Facebook Connect, now allowing users to connect with people in their personal network when renting places to stay.

Claritics Raises $1.5M – Claritics, a startup providing self-serve social analytics tools for brands and game developers, raised $1.5 million in series A funding this week, to be used to develop its analytics suite, as well as sales and operational staff, according to TechCrunch.

BitTorrent Releases Personal Social File Sharing Channels – BitTorrent, developers of the popular file transfer protocol for the same name, has released the beta of its Project Chrysalis. It allows users to create a personal file sharing channel to which friends from Facebook can be invited to download files that exceed Facebook’s file size limit, such as home movies that are over 1024 MB.

Facebook Roundup: Govt Requests, Stock, Skype, Tablet Apps, Like & Send Buttons, Syria, Zuckerberg and More

How Facebook Handles Govt Requests – Facebook recently told Forbes.com that the company has a dedicated team of professionals supervised by two former federal cybercrime prosecutors to deal with governmental requests for user data — subpoenas, for example. The company says they do not have a streamlined process to do this, but respond when necessary to legal requests.

MOL Malaysia Owns $100M Facebook Stock – TechCrunch wrote an interesting post this week pointing to the fact that MOL Global in Malaysia owns $100 million in Facebook stock (valued at $31 a share) that came in a deal when the company sold Friendster’s patents to Facebook last year. MOL received 700,000 shares as part of the deal, which have turned into 3.5 million shares since.

2.5M Sites Have Like Buttons – SearchEngineLand reported that 2.5 million websites have Like buttons.

25,000 Websites Have Integrated the Facebook Send Button – The Facebook + Media Page posted that since the April 25th launch, 25,000 sites have added the Send button social plugin. Meanwhile, Facebook’s Engineering Team posted a note about how the company built the Send button, which allows users to share a URL to their Facebook Groups, to specific friends via Facebook Messages, or in an email.

Facebook, Google, Try to Partner with Skype – Both Facebook and Google are trying to partner with Skype, reported Reuters.

Syria Attacks Facebook – The Electronic Frontier Foundation reported this week that several ISPs in Syria have reported security warnings that are really a man-in-the-middle attack against the HTTPS version of Facebook.

Federal Investigator to Preserve Govt Facebook Posts – The head of the House Oversight Committee, Rep. Darrell Issa, is concerned that official federal social media updates on platforms like Facebook will not be preserved for posterity. Legally, all documents created by an administration must be archived.

 

PowerReviews Raises $10M – Ecommerce solutions provider PowerReviews, which we wrote about last month, raised $10 million in new funding led by Four Rivers Group, bringing total funding to $37 million this week, according to TechCrunch.

Facebook Friending in Conflict Regions – The Friends Without Borders Page yesterday released an infographic visualizing data from http://peace.facebook.com/ It shows that the growth rate of friendships across conflicted borders such as Israel – Palestine has increased significantly this year.

Zuckerberg Buys Palo Alto Home – Facebook CEO Mark Zuckerberg recently purchased a home in Palo Alto, California for $7 million.

Warner Bros. Acquires Flixster - Warner Bros. Home Entertainment recently acquired Flixster, a social movie discovery website, TechCrunch reported. Rotten Tomatoes, the movie rating site, was also included in the acquisition. Financial terms were not disclosed.

Booshaka Classifies Facebook Likes – Booshaka, a Facebook search company, now ranks and classifies your Facebook activity via comments, Likes and posts.

Tigerlily Raises $1.3M – Tigerlily, a French Page management company, raised $1.3 million USD this week and is set to use this additional funding to expand in Europe.

Facebook Roundup: Ph.D. Fellows, Menlo Park, Deals, Credits, f8, Valuation, Engineering, Friendster and More

Facebook Announces Tech Heavy Set of 2011 Fellows – Facebook announced who was selected to become Ph.D. fellows this year. The Facebook Fellowship Program included people with backgrounds in psychology and economics last year; this year the five winners who receive tuition and fees for the 2011-2012 academic year, $5,000 for travel, $2,500 for a computer and a $30,000 stipend all study technical disciplines.

Specifically, Adrienne Porter Felt and Kurt Thomas of the University of California at Berkeley both study computer security, Yinan Li of the Universitiy of Wisconsin at Madison studies databases, Wei Liu of Columbia University studies machine learning, and Marke Olszewski of MIT studies compiler technology.

Facebook to Grow to 9,400 Employees by 2017 – According to public documents in Menlo Park, California Facebook plans to grow its workforce at its new Menlo Park headquarters from 1,400 to 9,400 people by 2017.

Facebook Deals All About Credits – AllFacebook reports that Facebook sources are saying that the company is not initially taking a cut of the revenue from its new Deals program. Instead it reportedly seeks to expand the reach of Credits, the in-Facebook currency.

Facebook to Host f8 in 2011 – Facebook has confirmed that the company will host an f8 conference sometime this year.

Facebook Valued at $70B on Secondary Market - Reuters reports that a group  of investors are trying to sell $1 billion of Facebook stock on secondary markets for amounts that would put the company’s total value at $70 billion; these investors previously tried to sell the shares for a value of $90 billion, but couldn’t move the stock.

Details of Russian Facebook Ownership – Gigaom reported this week that Russian investor Yuri Milner holds a 2.33% stake in Facebook, 1.41% stake in Zynga and a 4.63% stake in Groupon, among other investments and holdings.

Facebook Institutes “Hackamonths” - Facebook Engineering’s Dave Ferugson posted a note to the Facebook Engineering Page this week in which he detailed Facebook’s new “Hackamonth” program for engineers. Essentially the program will allow engineers to temporarily leave their current team to work on a different project; the goal is to have about 10% of the company’s engineerings participating each month. The Hackamonth program could become a recruiting talking point that lures engineers who are tired of working on the same project for years on end at other tech companies.

Details on Facebook’s Messages Server – The Facebook Engineering Team published a note this week that details the internal functioning of the Messages application server.

Facebook Advertises on Gmail – Facebook is running ads on Google, according to this screenshot. [Image via jing]

 

Friendster Deletes User Info on May 31 – A message sent to registered Friendster users announced that users should export their data because the social network is going to delete all of it on May 31. The company, from which Facebook purchased patents in Auguest 2010, notes that it will delete blogs, photos, comments, groups, etc., but keep accounts active and become an entertainment site, reported TechCrunch.

Blog Suggests New Feature for Facebook – A new blog, Yo Zuck! Implement This, takes suggestions for Facebook and creates mock-ups of their implementation. Youssef Sarhan is in Dublin and runs the blog, and has suggested a translate function, notification change and other interesting features. [Image via Yo Zuck]

MakeMeReach Raises €3M – The French Facebook-approved ad network and Facebook app developer MakeMeReach raised €3 million to fund international outreach for its services. Currently the company employs 25 and will use its funding to double staffing to move into Italian, Spanish and German markets, TechCrunch reports.

Announcing Inside Virtual Goods: Tracking the US Virtual Goods Market 2010 – 2011

With an up-to-$750 million acquisition of Playdom by Disney, an up-to-$400 million acquisition of Playfish by Electronic Arts, the acquisition of Tapulous by Disney, and hundreds of millions of dollars in venture investments, virtual goods are impacting businesses across the media landscape. Virtual goods, and the companies that create them, may be bringing the largest disruption entertainment, communication, and e-commerce infrastructure businesses have seen in years.

Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson that presents a comprehensive examination of the size and future of the virtual goods market in the United States, entitled Inside Virtual Goods: The US Virtual Goods Market 2010 – 2011. This is Inside Network’s second annual edition of the US Virtual Good Market report. It will be released on September 28, but is available for discount pre-order now.

Where will the virtual goods market go in 2011 and what are the biggest opportunities left unclaimed? How will existing players fare as Facebook continues to reshape the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The US Virtual Goods Market 2010 – 2011 provides deeper insight into monetization, development, and the key questions facing the space in 2011 than you’ll find anywhere else.

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Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*
OR Buy Single Report: $995 $795 USD*
* Pre-order discount ends September 27, 2010. All pre-ordered reports will be delivered on September 28, 2010.

About the Report

Inside Virtual Goods is a new report researched and created specifically for entrepreneurs, investors, and analysts interested in the growth of this exciting new category of online commerce that is fueling the growth of games-as-a-service businesses. During a research phase spanning the last few months, co-authors Justin Smith and Charles Hudson have spoken with dozens of executives and entrepreneurs from all parts of the ecosystem in order to form what we believe are the most detailed estimates, analyses, and predictions for 2010 and 2011.

We focused and organized the report around the following areas:

  1. Social Networks, Applications, and Games - The explosion of the virtual goods market on social networks is one of the biggest stories of 2010. We delve deeply into the trends, stats, key players, opportunities, and challenges facing the space this year and next.
  2. Mobile Applications and Games – Mobile application developers that have been early adopters of the free-to-play model are now seeing significant growth in 2010. Our study breaks down the key opportunities and challenges facing this emerging space going into 2011.
  3. Casual MMOs and Virtual Worlds - Virtual worlds and casual MMOs continue to grow as a meaningful share of the virtual goods opportunity in the United States. Our study breaks down the key drivers for success in this segment, trends in monetization and engagement, and the prospects for the future.
  4. Hardcore MMOs and Free-to-Play Online Games – Developers in the MMO / MMORPG space have been among the earliest adopters of the free-to-play model. We explore why free-to-play MMOs are succeeding, revenue and user trends, and the key issues facing this space as we head into 2011.
  5. Emerging Areas: Console Games and Subscription MMOs – As the virtual goods business model becomes more well understood, it is beginning to show up in new and interesting areas of the games and entertainment landscape. We highlight a few of the more promising areas where virtual goods are emerging as a promising opportunity.

Each section contains:

  1. A brief history on the evolution and growth of this space in the US, including a description of key players.
  2. Estimates on the size of the US virtual goods market in 2010 in that area.
  3. A diagnosis of the key opportunities and issues facing the growth of that space, including our outlook and projections for 2011.

In addition, prior to delving more deeply into each market segment, we’ve provided an overview of the emerging payments ecosystem that is growing to serve these new businesses. Traditional e-commerce infrastructure providers only offer a partial solution, and the virtual goods payments layer is currently in a major state of flux. In the report, we describe the variety of solutions that have been brought to market to date, and the key challenges facing the industry from a payments perspective as a whole.

For more details, check out the full table of contents below.

The annual membership, which includes the report and three additional quarterly updates, is USD $2,495. Alternatively, you can obtain just this report for USD $995.

The annual subscription brings you a total of four comprehensive reports comprising months of original research. Recent reports have covered:

  1. The Future of Social Gaming. Social games make up over half of the US virtual goods market. This report provided detailed coverage of exactly how this industry has managed to thrive, who its most valuable players are, and deeper insight into monetization, development, and customer acquisition than you’ll find anywhere else..
  2. The Spending and Usage Patterns of the Social Gaming Audience. Who are the millions of users whose time, money, and engagement have made social games into household names and their developers into technology industry celebrities? This report presented the only independent, original research into user profiles, behaviors, and attitudes toward social games and virtual goods.

Although the report will not be released until Tuesday, September 28, we are offering a special pre-order discount for those who purchase now. The pre-order price of US $795 for this report or US $1,995 for a one-year subscription is now available until September 27.

We are looking forward to continuing to cover the evolution of the space over the coming year. We look forward to hearing from you!

Table of Contents

1. Introduction

  • How We Got Here: A Brief History of Virtual Goods Worldwide
  • Defining Terms
    • Registered users
    • Active users
    • Average revenue per user (ARPU)
    • Average revenue per paying user (ARPPU)
    • How do different developers manage their businesses?
  • Growing Virtual Goods Markets in the US
    • Social Networks, Applications, and Games
    • Casual MMOs and Virtual Worlds
    • Hardcore MMOs and Free to Play Games
    • Mobile Applications and Games
    • Emerging Areas: Consoles, Subscription MMOs
  • Methodology

2. The Virtual Goods Payments Ecosystem: An Overview

  • Large Payment Platforms
  • Mobile Payment Providers
  • Offer Providers
  • Direct Payments vs Offers
  • Pre-paid Cards
  • The Arrival of Facebook Credits
  • New Payment Providers
  • Managing Fraud
  • Related Companies

3. Social Networks, Applications, and Games

  • Introduction
    • The Global Rise of Facebook
    • The Virtual Currency Payment Ecosystem Explosion – and Migration to Facebook Credits
    • Increased Optimization for Virtual Goods
  • Social Networking Platforms Today
    • Facebook
    • MySpace
    • Twitter
    • Google
    • Others
  • Significant Changes to Facebook Platform Dynamics in 2010
    • Distribution & Engagement
    • Monetization
  • Social Application and Game Genres: How Do They Perform?
    • Role Playing Games and “Hardcore” Mini-MMOs
    • Simulation and City Building Games
    • Pet Games
    • Poker Games
    • Gifting Apps
    • Arcade Games
  • Who’s Buying Virtual Goods?
    • Gender Breakdown
    • Age Breakdown
    • Geographic Breakdown
  • How Are They Spending Money?
    • Item Type Breakdown
    • Payment Method Breakdown
  • Market Size Estimate
    • Total Number of Monthly Paying Users
    • Total ARPPU Per Month
    • Total US Virtual Goods Revenues from Social Networks in 2010
    • A Quick Look at Revenues for Top Social Game Developers
  • 2011 Outlook
    • Growth Rate
    • Major Risks that Could Hamper Growth
  • Leading Companies

4. Casual MMOs and Virtual Worlds

  • Introduction
  • Demographic Breakdown
    • Gender
    • Age
  • Payments
  • Analyzing the Market Opportunity
    • ARPU
    • ARPPU
    • Market Size Estimate
  • 2011 Outlook
    • Growth Rate
    • Key Challenges
  • Leading Companies

5. Free to Play MMOs / Hardcore Games

  • Introduction
    • History of free to play MMOs
    • Emergence of the free to play MMO market opportunity in the US
    • Major genres for free-to-play MMOs and hardcore games
  • Analyzing the Market Opportunity
    • Total Player Base
    • ARPU
    • ARPPU
    • Payment methods
  • 2011 Outlook
  • Leading Companies

6. Mobile Applications and Games

  • Introduction
    • History of virtual goods model in US
    • Major genres for free-to-play iPhone apps and games
  • Analyzing the Market Opportunity
    • Total Player Base
    • ARPU
    • ARPPU
    • Payment methods
  • 2011 Outlook
  • Leading Companies

7. Emerging Areas

  • Console Games
  • Subscription MMOs

8. Conclusion

  • Overview: 2010 Market Estimates
  • Looking Ahead: 2011

9. Appendix: Company Index

About the Authors

charles-hudson-headshotCharles Hudson

Former VP Business Development, Serious Business & Host, Virtual Goods Summit

Charles Hudson is the former VP of Business Development for Serious Business, a leading social games developer on the Facebook platform. In addition to his work at Serious Business, Charles Hudson organizes two of the leading conferences in the social gaming and free-to-play games industries, the Social Gaming Summit and Virtual Goods Summit.

Prior to Serious Business, he was formerly the Sr. Director for Business Development at Gaia Interactive, a leading online hangout for teens. Prior to Gaia, Charles worked in New Business Development at Google and focused on new partnership opportunities for early-stage products in the advertising, mobile, and e-commerce markets. Prior to joining Google, he was a Product Manager for IronPort Systems, a leading provider of anti-spam hardware appliances that was acquired by Cisco Systems for $830 million in 2007. Charles holds an MBA and BA from Stanford University.

justin-smith-headshotJustin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s Inside Virtual Goods and AppData research and data services, and serves as co-editor of Inside Facebook and Inside Social Games.

Prior to Inside Network, he was formerly Head of Product at Watercooler, one of the leading application and game developers on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006. Justin holds a degree in Computer Systems Engineering from Stanford University.

Get the Annual Membership

The annual membership, which includes the report and three additional quarterly updates, is USD $2,495. Alternatively, you can just download this report for USD $995. Although the report will not be released until Tuesday, September 28, we are offering a special pre-order discount for those who purchase now. The pre-order price of US $795 for this report or US $1,995 for a one-year subscription is now available until September 27.

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*
OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends September 27, 2010. All pre-ordered reports will be delivered on September 28, 2010.

Facebook Rolls Back Questions Access from Many Testers

Over the last few days, Facebook has turned off its new Facebook Questions product for a significant portion of those who’ve had access since its beta launch on July 28th. Those whose access has been rolled back now see the old status publisher above their news feed, and no longer see the Questions navigation link in the home page left sidebar or the recent Questions panel in the right sidebar. While Facebook frequently turns on and off new products and features for small, unwitting tester bases, this large-scale roll back of a relatively widely used product is unusual.

When reached for comment Facebook tells us that “we’re currently still testing Questions with beta users and iterating on the product based on user feedback. We’ll be rolling out to more users as soon as possible” and separately, “We turn it off for some users based on the test we are running. You and your friends may be in the group that has it turned off.”

Reports of the rollback span across networks. Anyone with rescinded access who tries to follow a Facebook Questions permalink like this one is kicked back to the “Sorry, we’re not ready for you yet” page — same as what those who’ve never had Questions access see when trying to use the product.

Upon launch, some criticized the new status publisher that accompanied Questions. It hides the “What’s on your mind?” update prompt behind a row of buttons, reducing the prominence of the publisher as a whole, and forcing users to choose in advance whether they’d like to update their status, ask a question, upload a photo, or post a link. The new design prevented users from indiscriminately dropping a URL into the status field to automatically morph the status publisher into a link publisher. We thought the new publisher might reduce status update frequency while encouraging the other types of publishing, and that it also made link posting more difficult.

The rollback may just be some downtime while Facebook integrates changes or new features into Questions. Alternatively, it could be to test how the different publishers affect frequency of different update types. When Facebook restores Questions or we find out more details about the rollback, we’ll be here to keep you informed.

Update: Facebook Questions Product Manager Blake Ross has informed us that Questions has only been rolled out to 0.05% of the Facebook user base, or roughly 250,000 users. Therefore, even a rollback from a significant portion of these testers “is much smaller than many of the tests that we turn on and off every day.” The temporary rollback has now ended, and Facebook has reactivated Questions for all who have previously had access.

He also explains that while the new publisher was originally rolled out alongside Questions, the two products are not officially linked. “[The new publisher] will be rolling out more broadly on its own timeline in the near future, independently of the Questions rollout. Furthermore, we’ve run tests on it and found that it does not increase sharing.”

Facebook may be searching for a redesign of the publisher which does increase sharing, as those with restored access to Questions are seeing a slightly different version of the new publisher. A Video button has been added to the publisher options, and the titles of the existing buttons have been shortened.

Through Strategic Deal with Friendster’s New Owner, Facebook Expands Patent Portfolio

If extremely broad social networking patents prove enforceable in court one day, then Facebook recently removed a big threat — and is now in possession of it. The company recently acquired 18 patents and patent applications from MOL, the Malaysia-based new owner of Friendster, as VentureBeat and GigaOm reported today, with a source telling the latter publication that the deal was part of a larger package worth $40 million.

Friendster was the first social network of the past decade to make it big, following earlier efforts like Six Degrees. But the company struggled in the US due to technical and management issues, and eventually got passed by MySpace, then Facebook. But it was still was able to gain strong followings in parts of southeast Asia — at least until Facebook began growing in the region over the past couple years.

Kleiner Perkins encouraged Friendster to begin the patenting process, back in 2003, leading to the company obtaining ones like “feeding updates to landing pages of users of an online social network from external sources.” In later years, struggles with traffic helped the company remember the intellectual property it had, and has not ruled out going on the offensive against other social networks.

Facebook, meanwhile, has been buffeted by court cases brought on by smaller companies looking to cash in on its success. One, for example, was from web conferencing company Leader Technologies (whose slogan is “The Intellectual Capital Company”). It claimed Facebook was infringing on a patent it received in 2002 relating to “a method and system for the management and storage of electronic information.” In the tech industry, the shorthand description for companies like Leader is “patent troll.”

Which brings us to why Facebook would want Friendster’s patents. In the past, some have assumed that Facebook’s own patenting efforts could be part of a plan to go on the offensive against any potential social networking threat. Facebook itself has never said that its portfolio is purely defensive, and certainly, other leading tech companies have used their IP and legal muscle to smash smaller rivals.

But Facebook has yet to take this approach with the many patents it already has, or hopes to gain, even when it has felt threatened by rivals like Twitter. And there is also the issue of how well very broad social networking patents might be enforced by the courts. We believe that its purchase of the patents was intended to preclude any trollish court cases — or to reduce outsiders’ perception that it might be vulnerable to them, as it considers when to go public.

And that’s not all. The deal with MOL came with some other benefits, according to GigaOm, including advertising, cash, and the introduction of MOL’s payment service as a way of obtaining Credits, Facebook’s rapidly expanding virtual currency. In other words, MOL was able to approximately cover the cost of its purchase while gaining a powerful new partner; Facebook precluded a potential legal threat while getting a new way to monetize one of its fastest-growing markets.

Facebook Credits Will Impact Marketers, Developers, and E-Commerce

[Editor's Note: The following is an excerpt from Inside Facebook Gold, our new data and analysis membership service tracking Facebook's business and growth. Inside Facebook Gold presents weekly in-depth analysis articles exploring the most critical developments impacting the future of the Facebook ecosystem. Click here to learn more.]

“There’s just going to be one currency that people use” on apps, Facebook founder and chief executive Mark Zuckerberg recently said. What he means is that the company’s virtual currency, Credits, will take the place of the lucrative ones that social application developers have already built.

Let’s be clear: Facebook is not currently looking to create a “PayPal killer” in the form of a web-wide payment wallet. What, then, is the significance of Credits to the Facebook economy?

Today, we present our full analysis of Credits, beginning with its history and concluding with a look at where Facebook is with the product today, and where it might go. While we’ll focus on how the changes will impact developers, we’ll also mention potential ramifications for marketers, and for companies active in e-commerce.

>> Read more of this article at Inside Facebook Gold

Inside Virtual Goods: The Future of Social Gaming 2010, Is Here

2009 will be remembered as the year that casual gaming stormed social platforms and changed the way millions of people socialized with friends online. With an up-to-$400 million acquisition of Playfish by Electronic Arts, hundreds of millions of dollars in venture investments, and some of the highest engagement numbers that online entertainment has ever seen, social games are now impacting businesses across the media landscape. It’s become clear that there are substantial opportunities for social game developers with virtual goods revenue models, but the market is still evolving rapidly.

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Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495
OR Buy Single Report: $995

That’s why I’m excited to release today a new exclusive original research report with co-author Charles Hudson in our Inside Virtual Goods series that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2010.

How big is the market, and where will social gaming go in 2010? How will existing players fare as Facebook shifts the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The Future of Social Gaming 2010 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2010 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2010 gives you an inside view of the future at this critical juncture in the intersection of social networking and online games. The big picture? We estimate that the US virtual goods market will reach $1.6 billion in 2010, and that social gaming market will contribute $835 million of that total this year.

We have compiled months of original research from dozens of top executives and entrepreneurs from all parts of the social gaming ecosystem to produce eye-opening source data and analysis that is not available anywhere else. At over 140 pages, Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of what’s shaping up to be a very fundamentally strong and profitable industry.

What We Cover

  1. Emerging Social Game Development and Studio Models – There is an emerging consensus around how social game developers are choosing to organize themselves for game development. How do small, medium, and large developers organize their teams? What do development cycle times for original titles and “expansion packs” look like? What is the role of testing and metrics in the development process?
  2. Social Game Design and Mechanics – The emergence of a few key game genres with proven mechanics and monetization have spawned dozens of fast followers. Understand how publishers are continuing to innovate as we head into 2010.
  3. Monetization Data and Payment Trends – Now that developers have proven the virtual goods model, what are ARPUs really like for different game genres? What is the lifetime value of users, and how long do players stick around? We take an in depth look at monetization methods and rates, and shed light on where payments are headed in the coming quarters. One more note on monetization – you may be wondering about everything you’ve heard about offers and alternative payments for virtual goods. We cover:
    • The offers ‘scandal’ and what will it mean going into 2010
    • Changes that advertisers and payments companies have – and haven’t – made
    • How both direct and alternate payment methods are most likely to grow or contract in the coming year.
  4. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past two and a half years, so have the ways that developers acquire and retain new users. How have user acquisition costs changed, and what do Facebook’s changes spell for the future of the marketing funnel? We take an in depth look at data and trends.
  5. Facebook’s Platform Changes, Credits, and What’s In Store for the Future – Just when social game developers were settling in, Facebook announced major adjustments that will dramatically alter the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? In addition, as Facebook rolls out its much-discussed Credits currency, how will monetization and the payments landscape be affected? Finally, will we see another dominant platform emerge? Our overview covers these developments, their impact on the industry, and what else is in store.

What you get

In addition to our deep dive into key aspects of the social gaming ecosystem, the report also offers extended coverage on:

  • A brief history on the evolution and growth of this space in the US, including a description of all key players and how they rose to the top.
  • Total social gaming market size estimates for 2010, including estimates on the “big three” developers.
  • Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2010.

See the full table of contents below:

Table of Contents


Appendix of Related Companies includes: 51.com, 6Waves, Activision, AddictingGames, AdNectar, AdParlor, Amazon, AOL, Apple, Atari / Cryptic Studios, BigFish Games, BigPoint, Blizzard, Boku, Boomerang Networks, Crowdstar, DeNA, DoubleDing, Digital Sky Technologies, Electronic Arts, Facebook, Firecue, Friendster, Gambit, Gameloft, Glu, GMG Entertainment, Google, GratisPay, Gree, Green Patch, gWallet, hi5, InComm, Kaixin001, Kongregate, Live Gamer, LOLapps, Microsoft, Mixi, MSN, MySpace, Nexon, ngmoco, Offerpal Media, OpenFeint, Orkut, PayPal, Peanut Labs, Playdom, Playfirst, Playfish, PlaySpan / Spare Change, Pogo, PopCap Games, QZone, Real Networks, RenRen / Xiaonei, RockYou, Serious Business, SGN, Shanda, Social Hour, Social Reach, SocialGold / Jambool, SponsorPay, Super Rewards / Adknowledge, SupersonicAds, Target, Tatto Media, Tencent, The9, TokenAds, TrialPay, Twitter, Ubisoft, Viacom, VKontakte, Yahoo, Zong, Zynga

More Data, More Actionable Insights

In 2009, social games began to show what kind of value can be created on top of social networks. 2010 will be an even more important year.

Social gaming, powered by virtual goods, is this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

  • A detailed overview of the current state of the industry
  • Specific estimates on market size by segment
  • Diagnosis of key opportunities and issues by segment

Get The Annual Membership

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The annual membership, which includes the report and three additional quarterly updates, is USD $2,495. Alternatively, you can just download this report for USD $995.

About the Authors

justin-smith-headshotJustin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin serves as co-editor of Inside Facebook and Inside Social Games, and manages Inside Network’s AppData and PageData services as well.

Prior to Inside Network, he was formerly Head of Product at Watercooler, one of the leading application developers on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006. Justin holds a degree in Computer Systems Engineering from Stanford University.

charles-hudson-headshotCharles Hudson

VP Business Development, Serious Business & Host, Virtual Goods Summit

Charles Hudson is VP of Business Development for Serious Business, a leading social games developer on the Facebook platform. In addition to his work at Serious Business, Charles Hudson organizes two of the leading conferences in the social gaming and free-to-play games industries, the Social Gaming Summit and Virtual Goods Summit.

Prior to Serious Business, he was formerly the Sr. Director for Business Development at Gaia Interactive, a leading online hangout for teens. Prior to Gaia, Charles worked in New Business Development at Google and focused on new partnership opportunities for early-stage products in the advertising, mobile, and e-commerce markets. Prior to joining Google, he was a Product Manager for IronPort Systems, a leading provider of anti-spam hardware appliances that was acquired by Cisco Systems for $830 million in 2007. Charles holds an MBA and BA from Stanford University.

Facebook Developer Garage Coming to Taiwan This Weekend

The Facebook Developer Garage is coming to Taipei this weekend, where developers in one of Facebook’s fastest growing countries will be able to hear from Facebook itself and network with other developers in the country.

As we detailed last week, Facebook has seen incredible growth in Taiwan over the last 6 months, from 400,000 in June to over 5.4 million today. As a result, many developers in the country are taking interest in building apps and social games for the Facebook Platform, which is much more open when compared to other popular platforms in the region. However, we’re also seeing some interesting and different usage patterns amongst Taiwanese Facebook users so far as well.

This weekend’s Facebook Developer Garage will be on Saturday, 19 December from 1:00pm – 6:00pm at 資策會科技服務大樓創新廳, which is located at 台北市松山區民生東路四段133 號14 樓 in Taipei (Google Map). Here’s the schedule for the day:

taipeiAgenda

1:30 – 1:35 Opening
1:35 – 2:15 Facebook Brand Marketing by Alex Wu*, Facebook (In English)
2:15 – 3:05 Panel Talks: Opportunities and Challenges on the Facebook Platform

3:05 – 3:20 Break
3:20 – 4:00 How Virtual Currency Works on Facebook by Nick Talarico*, Director of Publisher Development, Offerpal Media (In English)
4:00 – 4:40 Lightning Talks
4:40 – 5:30 Networking
* To Be Confirmed

The Garage organizers are expecting as many as 350 attendees. To RSVP, check out the Facebook Event.

To dig deeper into the virtual goods market, check out our new report: Inside Virtual Goods: The US Virtual Goods Market 2009 – 2010.

Facebook Roundup: Le Web, RockYou, Gowalla and More

StribeStartups Present Facebook Integrations at Le Web – European startups Stribe and Tigerlily won first and second places, respectively, at the Le Web startup competition in Paris on December 10.

Tigerlily

Stribe lets you add social networking features to web pages, and includes Facebook Connect integration to help kick-start communities. Tigerlily is a tool set that includes contest and quiz widgets to customize a Facebook page, targeted to media companies and large corporations via free and pro versions.

12-12-09 roundup pic 4

RockYou Makes Staff Changes –  In an effort to boost its focus on brands at the Facebook app developer and ad network, RockYou made some management changes this week, shifting sales chief Lisa Marino to CFO while executives Ro Choy and Mihir Shah left the company to pursue other social media avenues.

The third-largest publisher on Facebook, RockYou has 52 million monthly active users in the U.S. for such apps as RockYou Live and MyGifts, with a total of 215 million worldwide users.

12-12-09 roundup pic 6

Broadcast Your Facebook LocationGowalla has released Mobcast, an iPhone app that allows you to broadcast your location to all or chosen Facebook friends. While the app can constantly broadcast your location to friends, like Google Latitude, but must remain open to do so.

Florida Lawyers and Judges Can’t Be Facebook Friends – News broke this week of a ruling regarding judges’ use of Facebook by the judicial ethics advisory committee of the Florida Supreme Court. The committee ruled that it would “convey the impression” that lawyers who appear before judges were in a special position to influence a judge if the two were friends on Facebook.

Although, the ruling did say judges could post material on their social networking sites, for personal or electoral reasons, as long as it didn’t violate the state’s code of judicial conduct. More on this later.

Friendster bought by MOL Global Pte. Ltd. –  an affiliate of MOL AccessPortal Berhad of Kuala Lumpur , the compan agreed to acquire the social networking site this past week.

The two partnered in October to create Friendster Wallet and a payments platform enabling micro-spending for the 115 million Friendster users and under the new deal the operations of both companies will combine to create Asia’s largest content, distribution and commerce network.

MOL operates and develops and operates payment systems in more than 75 countries worldwide with more than 500,000 payment channels, over 4.5 million transactions per month that process upwards of $200 million dollars a year, according to the company’s web site.

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