Inside Facebook

Each month, it seems like there are a few surprises in store on the Facebook gaming charts. Back at the start of June, we saw a number of new titles appear within the Top 25. One in particular, Farm Town, debuted at #4 with nearly 8 million monthly active users. It just goes to show that even today, with Facebook’s viral channel allocation limits in place, new games can still become popular once word starts to spread.

Of course, distribution has always been an issue for new companies with no marketing budget, but Farm Town shows that things can still grow without a lot of initial spend. This month, Zynga is hot on the heels of Farm Town with its own new farming release, FarmVille…

>> Read more at Inside Social Games

Check out the top headlines and insights this week from Inside Social Games - tracking all the latest developments at the intersection of games and social platforms.

Monday, June 22

• Zynga Sues Playdom Over Mobsters Ads
• Bringing Wholesome Social Games to Facebook and MySpace: Q&A With WonderHill CEO James Currier
• iPhone OS 3.0 Brings New Legal Terms on Microtransactions, Age Rating for Apps

Tuesday, June 23

• Expert Metrics for Social Games by Siqi Chen and David King - Slides from #SGS09
• Live Notes from #SGS09 - Building Social Games at Scale
• Slides from Presentation at Social Gaming Summit

Wednesday, June 24

• iPhone App Ad Manager AdWhirl Closes $1 Million Seed Round
• Pincus: iPhone Not Easy to Monetize, Needs Better Facebook Connect Support
• Virtual Currency Monetization Comes to Twitter with 140 Mafia and Super Rewards

Thursday, June 25

• Hive7 Partners with Susan G. Komen in New Facebook Game Zen Garden
• Are You Making Your Social Games Wide or Deep?

Friday, June 26

• Ex-Facebooker Net Jacobsson Joins OpenFeint Advisory Board

Founded by PayPal co-founder Max Levchin in 2005, Slide has become synonymous with the explosion of social network applications in recent years. Its properties and widgets, including popular applications SuperPoke, Top Friends, FunSpace, and SuperPoke Pets, reach over 155 million people per month on popular social networks like Facebook, MySpace, Bebo, Hi5, Orkut, Friendster, and Tagged. And with around 24 million monthly active users on Facebook, Slide is (and always has been) one of the largest application developers on the Facebook Platform.

However, unlike other top app developers, Slide hasn’t been rolling out many new applications over the last year. Instead, it’s been honing and optimizing its core network of properties, and spending a lot of time and energy tuning its monetization efforts.

On the advertising side, Slide has built a sales team with several staff in New York and San Francisco that has been driving the company’s premium integrations like branded SuperPokes or viral FunSpace videos. However, the company has also quietly been building its direct to consumer business, selling virtual currency and subscriptions that give users access to premium features. For example, each bar of Slide Gold costs USD $0.10 (the same exchange rate as Facebook Credits), and unlimited premium SuperPokes can be purchased for a USD $4.99 monthly subscription fee.

Just how important has Slide’s virtual goods business become? As of today, a Slide spokesperson tells us its direct-to-consumer virtual currency sales and subscriptions account for 50% of the company’s overall revenues.

Furthermore, given the increasing importance of virtual goods sales to the company - and that Levchin, CFO Kevin Freedman, and VP Strategy and Business Development Keith Rabois all share a history at PayPal - we’ve been hearing increasing rumors lately that Slide has plans to bring more parts of the payments layer in house in order to be able to exert greater control over the payment user experience. Today, Slide confirms that that is indeed the case.

“We believe it’s important to improve the system for paying for virtual goods. We are working on innovating that technology to make the experience easier for our consumers,” Lily Lin, Slide’s Director of Communications, tells Inside Facebook.

Whether or not Slide will make its payment infrastructure available to other developers remains to be seen. Slide’s Lin, however, says that that is “not the plan.”

“The focus is just for our own users,” she says.

For a company like Slide, which has 150 million users around the world yet connects with many of them through social network platform partners, taking greater control over the payments infrastructure, which is of increasing strategic importance to the company as it grows its direct to consumer sales, makes a lot of sense. Unlike smaller developers, it has the resources and experience to potentially establish direct relationships with payment processing companies instead of working with social application payment service providers like Social Gold, Spare Change, Zong, or Boku - or the social networks themselves. (Facebook recently started testing a payments program for developers, and MySpace has said it plans to do the same later this year.)

Overall, we think these are all smart moves by the company. Virtual goods sales are booming on the Facebook Platform, and Slide is in a unique position to capitalize on both the advertising and e-commerce opportunities inside Facebook. We’ll continue to track the company as things progress on both fronts throughout the year.

This morning I gave the opening presentation at the Social Gaming Summit, discussing an overview of the major platforms, players, and monetization stats in the social gaming industry. For those interested in checking out the slides, they are embedded below.

Topics covered: Facebook, Facebook Connect, iPhone, MySpace, Hi5, Twitter, Monetization, ARPUs on Facebook and MySpace, IP, copycats.

Facebook doesn’t let users skin their profile pages, but a browser plugin for Internet Explorer and Firefox called PageRage Super Profile by Yontoo Technology allows users to create the appearance of doing just that. In fact, the app is currently the fastest growing application in the 100,000 to 1 million monthly active users (MAU) category, according to AppData, with nearly 1 million monthly active users and a gain of 200,000 MAU in the last week.

With PageRage, you can customize your Facebook profile with a full profile layout. Your friends who are also users of the app can then see this layout when they are viewing your profile. So far Facebook has kept the profile page layout the same for everyone - simple white and blue - but users are showing interest in customizing their profiles like they are able to on other sites (MySpace, Twitter, etc.)

In the past 90 days, the app has experienced a decline in users, until about mid-May when user growth began to rise.

Accompanying PageRage Super Profile in the Top 5 fastest growing apps this week are My Best Girls! at #2, SpeedDate at #3, People I Love! at #4, and Which Car suits your Personality? at #5, which have made weekly gains ranging from over 100,000 to almost 200,000 MAU, representing MAU growth between 20 and 30 percent.

SpeedDate appears on the leaderboard many times, at #3, #9 to #10, #14 to #16, #18, and #20. SpeedDate has apparently been aggressively buying out apps and completing reskinning them with its own app again - which got the app into trouble with Facebook last summer.

In the Top 20, you’ll also find that games by popular developers Zynga and RockYou! are doing well such as Special Forces and Speed Racing. Those simple quiz apps are still growing too.

As one might expect, compared to the 1 million to 10 million MAU category, the 100,000 to 1 million MAU category features a lot more individual developers who are making their way to the top of the leaderboard. As the virtual goods economy and payments space takes off continues to grow, individual developers are still building substantial businesses without incredibly large audiences.

Zynga, itself being sued by Mob Wars creator Psycho Monkey for IP issues regarding the Zynga title Mafia Wars, has now filed suit against other leading rival Playdom for misuse of the mark “Mafia Wars” in ads it is running for its popular game, Mobsters…

>> Read More at Inside Social Games

Earlier this month, Busch Entertainment announced a cross-platform social media campaign intended to create greater awareness of Busch Entertainment’s many theme parks, including SeaWorld and Busch Gardens. The campaign, called The Worlds of Discovery Photo Adventure, challenges people to see if they can find five differences between a series of two almost-identical photos featuring SeaWorld and Bush Gardens sights. Users can play the game via a Facebook application, the Facebook Connect enabled site MyPhotoAdventure.com, and soon, the iPhone.

In Busch’s Facebook application, after each game is over, the app shows you a 10 second or so video that promotes theme park attractions before asking you if you want to publish your score to your Facebook profile. It also shows you your score, rankings, and top rankings. With the tickets you earn, you can then enter drawings. The current prize, for example, is a pair of tickets to any Worlds of Discovery park. Other social features include inviting your friends to play the game and a column on the right-hand side that displays other theme parks that you can become fans of.

Entering tickets to win the current drawing:

Joe Couceiro, CMO for Busch, says, “The power of the social and mobile web applications allow us to connect with current and prospective fans in a fresh and engaging way, while providing a fun, interactive experience that begins before they ever enter one of our parks.” The campaign was developed with Buddy Media.

Check out the top headlines and insights this week from Inside Social Games - tracking all the latest developments at the intersection of games and social platforms.

Monday, June 15

• 3 Social Games Startups Receive 2009 fbFunding
• Hover Kart is A New Racer from OMGPOP

Tuesday, June 16

• Making Music on the iPhone: Q&A with Jeff Smith of Smule
• Raptr Integrates Facebook Connect to Let Players Share More Gaming Info with Friends

Wednesday, June 17

• GameGround Raises $4.1 Million from Sequoia to Build Social Gaming Services
• PayByCash Introduces PayByCash Codes

Thursday, June 18

• Playdom Hires John Pleasants as New CEO, Expands with New Hires
• TweetMyGaming Compiles Video Game Conversations from Twitter in Real-Time

Friday, June 19

• Rumor: Electronic Arts Acquires Social Gaming Startup J2Play
• Offerpal Adds Customizable Virtual Currency Analytics Tools
• Spell Souls is a New Social Game from Simple Lifeforms - Step Aside Potter

As we continue our in depth look at leaders the Facebook Platform monetization ecosystem, today we turn our attention to Offerpal Media, one of the largest players in the space. After raising $15 million earlier this year from D. E. Shaw Ventures, InterWest Partners, and North Bridge Venture Partners, the company has been expanding its efforts to help developers monetize their social apps and games through the company’s offer network and virtual currency platform.

Offerpal works with many Facebook app developers, and is led by Anu Shukla, Founder and CEO, Mitch Liu, Co-founder and Vice President, Naghi Prasad, VP Engineering and Operations, and Bill Lonergan, CFO. We recently spoke with Shukla about recent developments in the Facebook payments space and the company’s approach to monetization.

Inside Facebook: Anu, what is Offerpal’s role in the virtual economy?

Anu Shukla: Offerpal is a monetization platform for applications and websites with virtual currencies, digital goods, or subscription-based services. We launched in October of 2007 and entered the space because we initially built an app for Facebook and MySpace and integrated virtual currency, but then focused on building out a monetization platform.

How would you compare user behavior between social networks and standalone sites?

We focus half of our efforts on social networking based apps and half on standalone games and websites. On social networks, we’ve seen a big influx of new users - whereas on standalone sites, it’s the same user base again and again. On social networks, new apps are being launched all the time, and the old ones die. Apps grow virally, but users also lose interest faster.

What trends are you seeing around users and their payment method choices?

It depends on what type of app you’re dealing with, whether users are younger or older, female or male, and how much time they have on their hands. Users who don’t have much time tend to use cash payment methods. In Europe, mobile payments are more popular. Incentivized offers are used less, proportionally speaking. For example, 30 percent of revenue may come from cash payments, and 70 percent from other payment methods, such as offers – but this breakdown changes depending on the population at hand.

As an optimization platform, how does Offerpal optimize the experience for the different players you work with?

We have 3,000 offers in our system and add 100 new ones every day. We optimize our offers based on individual preferences and target the exact type of user, which optimizes revenue for our publishers. The publisher wants to maximize earnings and provide a good customer experience; the consumer wants to do something that s/he is interested in. We have a scalable rule-based optimization engine that’s based on the inclusion/exclusion of particular audiences, proprietary algorithms, and collaborative filtering at the individual consumer level.

From our perspective, all relationships are really important and make our business model work. The advertiser pays; consumers buy; and publishers attract consumers. The right match between the three ensures that the advertiser is seeing quality results, the publisher is maximizing revenue, and the consumer is finding offers relevant. We work extensively with advertisers, as well as publishers who can then turn their attention to the games themselves while we focus on monetization efforts and customer service.

And, what about your transaction model?

When a user completes a transaction, the advertiser pays us, and we share that amount with the publisher. Revenue share is negotiated on a case-by-case basis.

How is your partnership with IMVU going?

IMVU is a premier avatar-based site, and its tight integration with Offerpal has been quite successful. IMVU is one of our premier clients, and we hope to continue the partnership for many years to come. IMVU has done a great integration, as well as Real World and Mobsters. We have a team in house that helps publishers find the right integration.

The virtual economy in international markets in Asia, for example, is exploding. Are we seeing signs in the U.S. in that direction?

Yes, we’re seeing all the signs of that. Social networks are rushing to add virtual currency; and games and virtual worlds are being developed/created to generate income/revenue from virtual currencies. Virtual currency is here to stay.

Now that Facebook has launched its alpha “Pay with Facebook” test, what’s your reaction?

I think it’s going to open up the number of people who will participate in transactions. The net effect will be that more people are willing to buy virtual goods, subscription services, and digital goods on Facebook because they are familiar with the brand. This will add more people to the mix. The user base will expand, which is great for publishers and for us.

How is Offerpal doing financially?

Financially, we’re bucking the trends, which is not surprising. In a recession, the industry that expands the most is entertainment, and we’re seeing the effects of that. Combined with the fact that engagement on and growth of social networks are both increasing, we’re riding on these positive trends, and are on an upswing.

Can you share any statistics with us on the percentage breakdown of your revenues across certain regions?

Sure - here is what we’re seeing:

70% North America
17% Europe
7% Asia
2% Middle East
2% South America
1% Africa1% Central America

Thanks Anu! Do you have any last comments you’d like to share with our readers?

There’s no reason why micro-transactions won’t be as pervasive as evidenced in Korea and China. China’s Tencent QQ almost got regulated by the Bank of China because its virtual currency was so liquid!  And also, we’ve seen the positive benefits of businesses that are initiating loyalty points programs such as frequent flier miles. Virtual currency is the equivalent of that for gaming and social networking worlds.

Now that school is out, what’s growing on the Facebook Platform?

Here’s a look at this week’s Top 20 fastest growing applications on Facebook from AppData amongst applications between 1 million and 10 million monthly active users.

		Name	MAU	Gain	Gain, %	Developer
1.		Likeness	3,305,337	+1,154,621	+53.7	RockYou!
2.		My Polls	3,038,017	+776,361	+34.3	It’s complicated
3.		Farm Town	9,197,631	+715,502	+8.4	Slashkey
4.		Barn Buddy	1,948,971	+664,385	+51.7	TheBroth, Inc.
5.		Restaurant City	5,211,060	+626,901	+13.7	Playfish
6.		All About Me	1,222,298	+625,892	+104.9	Lih Chen
7.		When will you DIE?	1,398,828	+606,714	+76.6	Kyrah Abad
8.		MindJolt Games	7,652,207	+600,276	+8.5	MindJolt
9.		CourseFeed	5,284,093	+561,607	+11.9	ClassTop
10.		Do you really know me?	1,138,921	+507,349	+80.3	How well do you know me
11.		YoVille	8,081,702	+473,329	+6.2	Zynga
12.		Pillow Fight	2,242,228	+450,520	+25.1	Shikha
13.		Mobile	6,210,021	+448,974	+7.8	Facebook
14.		Bejeweled Blitz	4,120,033	+438,207	+11.9	Popcap Games
15.		Biotronic	2,831,529	+360,761	+14.6	Metrogames
16.		Mon Coeurs	1,198,052	+360,653	+43.1	Coeurs
17.		Cities I’ve Visited	1,917,483	+355,744	+22.8	TripAdvisor
18.		what are you born to do?	2,612,943	+346,967	+15.3	Born
19.		What is the theme song of ur life???	2,485,688	+341,637	+15.9	—
20.		Daily Horoscope	3,725,878	+328,981	+9.7	6 waves

Coming in #1 is Likeness, an app developed by RockYou! that allows users to compare themselves with friends and celebrities to see who they are most like. In the Top 5, three of the apps are new social games that center around building deep in-game engagement with your friends: Farm Town fom Slashkey at #3, Barn Buddy from TheBroth at #4, and Restaurant City from Playfish in #5.

Likeness, Barn Buddy, All About Me, When will you DIE?, and Do you really know me? have all grown by over 50% this week alone. All About Me’s weekly growth has been particularly noticeable - going from virtually no users to over 1.2 million monthly users in the last eight days. Developed by Lih Chen, the app is one of the many simple quiz apps that we’ve seen take off in recent weeks.

All About Me’s growth in the last month:

Other apps in this week’s Top 20 include those in education (CourseFeed), travel (Cities I’ve Visited), and virtual worlds (YoVille). With the first batch of 120 verified apps, it’s an exciting time for apps to observe how increased visibility could affect rankings on the audience leaderboards.