Gowalla closes down – Gowalla officially shut down its location-based service this week. The company was acquired by Facebook for its talent in December.

Facebook honored by GLAAD – Facebook is set to receive a special recognition award at the Gay & Lesbian Alliance Against Defamation (GLAAD) media awards for its work in bullying prevention and inclusive options for users who identify as LGBT.

Walmart purchases Social Calendar - Walmart purchased Social Calendar, a Facebook app that sends birthday and holiday reminders via email and SMS, TechCrunch reported.

Facebook may expand beyond Menlo Park – Stalled in negotiations with the city of Menlo Park in California, Facebook may be set to expand its offices to Newark, Calif., according to a report from The San Jose Mercury News.

State laws move to make Facebook part of estates – Facebook and social network access may become part of a deceased person’s digital estate if laws in Nebraska and Oregon pass, according to The Washington Post.

Facebook faces trial in India – Facebook and Google are set to be on trial in India for charges that the companies did not censor objectionable content on their sites, the Wall Street Journal reports.

Facebook proposes new site governance – The social network presented a draft of a new Statement of Rights and Responsibilities for users and requested feedback on its Facebook Site Governance page.

Yahoo has decided to sue Facebook over patent infringement, filing a 19-page lawsuit in San Jose federal court today.

The suit concerns 10 patents Yahoo holds related to advertising, privacy, customization, messaging and social networking. Last week Yahoo threatened to take legal action against the social network unless it began paying Yahoo licensing fees. The lawsuit could negatively affect Facebook’s initial public offering expected later this spring.

In light of the suit, Facebook released the following statement:

We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.

Yahoo is asking for Facebook to be permanently prevented from any further infringement of Yahoo’s patents, for Facebook to be ordered to pay Yahoo triple damages due to the “willful and deliberate nature of the infringement” and for both pre- and post-judgement interest on damages. Yahoo is also asking for Facebook to pay all legal costs associated with the court case.

According to AllThingsD, Yahoo’s new CEO Scott Thompson is behind the aggressive move as he seeks to turn the company’s flagging fortunes around. Many industry watchers are puzzled over the move, considering the benefit Yahoo has seen from integrating Facebook’s Open Graph — just three weeks ago Facebook used Yahoo as an example of a success story on its mobile platform. Yahoo took similar, albeit less potentially damaging actions against Google before its IPO in 2004.

The full legal filing is below:

Complaint

Yahoo claims Facebook is infringing on 10 to 20 of its patents and threatens a lawsuit against the social network if it doesn’t agree to pay licensing fees, according to the New York Times.

The timing of the claim is reminiscent of when Yahoo took similar action against Google just before the search company’s initial public offering. This led Google to settle and award Yahoo with several million shares of pre-IPO stock. Facebook could be put in the same sort of bind.

The news comes across as oddly malicious of Yahoo, which seems to be benefiting from Facebook login and Open Graph integration. Yahoo is consistently one of the top ranking apps in our AppData tracking service, and Facebook has been pointing to Yahoo as an example of how other media companies can drive traffic and boost engagement by integrating its platform.

But with Facebook eating away at Yahoo’s display advertising revenues and contributing to the demise of the company’s other services like photo sharing, messenger and email, the web portal decided to be more aggressive in its attack. Yahoo apparently broke the news to the New York Times at the same time it informed Facebook. A spokesperson from Facebook said Monday night that the company had not fully evaluated Yahoo’s claims.

Facebook owns dozens of patents, including some it strategically acquired from Friendster in 2010. So far the social network has used these patents as protection, not to go on the offense as Yahoo has done.

Facebook did not respond to additional requests for comment today.

Facebook loses lobbyists – Politico reported this week that three contract lobbying firms working for Facebook pulled their services after content providers who were also clients raised concerns. The story implies that Internet providers and content creators are at odds, noting that Facebook increased its lobbying expenses 285 percent from 2010 to 2011. [Image via Facebook]

Facebook engineers now designing hardware – As part of its Open Compute Project, Facebook staff has begun to design its own storage hardware, according to a report from Wired.

Facebook wins Power.com court fight – Facebook finally won its case against Power.com, a now-defunct website that used to aggregate data from social networks. The lawsuit began in 2009.

Facebook used to serve legal claims in UK – Facebook may now be used as a platform with which to serve legal claims in the United Kingdom. A judge in a court case recently allowed Facebook to be used in a commercial case where one of the parties was difficult to locate.

Study: users managing privacy controls better – The Pew Internet and American Life Project released a study this week that found that users of online services are becoming more active at controlling their privacy.

Crowdtilt launches funding platform – Crowdtilt publicly launched its group fundraising platform this week. The site uses social media platforms like Facebook to allow groups of people to raise money for anything from art projects to vacations.

Miloyni releases Credits whitepaper – Miloyni has written a report called “Facebook Credits 2012: A Merchant’s Perspective” examining the benefits and drawbacks of Facebook Credits.

Oscar buzz on Facebook – Banyan Branch put together an infographic with buzz for Oscar nominees ahead of the ceremony this weekend.

Featured page owners get subscribe button – Fans can now more easily subscribe to Facebook page admins who make themselves visible as “Page Owners.” Facebook added a subscribe button to this featured section of pages on Friday. This only applies to page owners who have enabled subscribers.

Zuckerberg weighs in on SOPA -  Facebook CEO Mark Zuckerberg weighed in on the Stop Online Piracy Act on Wednesday, writing in a Facebook post, “We can’t let poorly thought out laws get in the way of the Internet’s development.”

Facebook fifth in video viewers – ComScore reported this week that Facebook was the fifth most popular destination for online video behind Google, VEVO, Yahoo and Viacom. This is among the 182 million Internet users in the U.S. who watched online videos in December. Last year Facebook placed sixth, but generally has not seen steady growth in this category. [Image via ZDnet]

Employees increasingly use social media at work -  Palo Alto Networks found a 300 percent increase in social networking on corporate networks this year. Specifically, bandwidth consumption for Facebook apps, social plugins and posting increased from 5 percent to 25 percent since October 2010.

Update on Koobface virus -  Facebook security team posted an update about the Koobface virus this week, noting that after three years the company is been able to keep the virus off the platform, but is still seeking those responsible.

Next gen iPad includes Facebook code - iMore is reporting that buried within the iOS 5.1 beta 3 code for iPad3 are “ongoing references to Facebook.”

MTV uses Facebook for scholarships -  MTV has partnered with the College Board and the Bill and Melinda Gates Foundation to run a campaign called My College Dollars, which guides students to college scholarships for which they can apply.

Facebook partners with Moo.com - Business card company Moo.com is offering Facebook users custom cards inspired by Timeline. In a unique partnership, Facebook has added a button to users’ info sections that leads to Moo.com, where people can design business cards using their cover photo and profile information. The companies are giving away the first 200,000 boxes of cards free.

Facebook announces 2012 Hacker Cup – Facebook made a blog post this week announcing the first Hacker Cup, opening up its famous hackathons to engineers around the world. Contestants will compete in five rounds based on accuracy and speed in solving algorithmic problems. The company will give away cash prizes up to $5,000.

East Palo Alto to review Facebook’s Menlo Park plans – City officials from East Palo Alto are concerned that expansion plans for Facebook’s new headquarters in Menlo Park, Calif., could lead to traffic issues or displace residents. East Palo Alto council will meet in a closed session to discuss options to prevent such an impact.

California Facebook Ad Lawsuit Proceeds -  A U.S. District Judge in California has rejected Facebook’s request to dismiss a lawsuit from people claiming the site’s social advertisements count as unauthorized use of their names and likenesses.

Facebook the Top Searched Term in U.S. -  Experian reported this week that Facebook topped its list of the most search terms in the United States for the third year in a row, making up 3.1% of all searches. [Image Via Experian]

Facebook Completes Move to Menlo Park - The company moved the last of 2,000 employees from its Palo Alto office into a ten-building, 1-million square foot campus in Menlo Park on Monday. Facebook hopes to one day accommodate up to 9,400 employees there.

North Social’s Facebook Page Don’ts -  North Social put together a video montage of the worst things brands can do to gain fans on their Facebook pages.

Modea’s Wisdom Tree App, Find Gifts For Friends - An app from digital agency Modea allows users to select a friend, answer a few questions about them, and then suggests the perfect (gag) gift for this friend.

Ireland’s Office of the Data Protection Commissioner has found Facebook Ireland to be compliant with Irish and European Union law, and has reached an agreement that gives users even more control over privacy in the next six months.

The commissioner completed a three-month audit of Facebook Ireland following a formal complaint suggesting the social network was creating “shadow profiles” of non-users. Because Facebook’s international headquarters are located in Ireland, the commission there oversees the company’s legal compliance for all users outside of the United States and Canada. The audit found “positive approach and commitment” by Facebook Ireland to respect users’ privacy, but made several recommendations that the social network has committed addressing before a follow-up audit in July 2012.

These recommendations include increased control over tagging features, an update to the data use policy, sooner deletion of user and non-user data and more transparency and control over how personal data is used in advertising on the site.

With regard to “shadow profiles,” the commission determined though Facebook receives some non-user data, it is not being used to build profiles of those people. The report also states that the social network is “now taking active steps to delete any such information very quickly after it is received.”

The findings of the report are overall positive for Facebook, which many people mistrust because of the massive amounts of data it collects and new features that force users to opt out rather than opt in. How the company addresses individual recommendations from the commissioner remains to be seen, but it appears to be willing to make concessions on certain features to give users more control and satisfy watchdog agencies. According to a press release from the commissioner, “Taking a leadership position that moves from compliance with the law to the achievement of best practice is for Facebook Ireland to decide but if it continues to display the commitment I witnessed throughout the audit process it is certainly achievable.”

Last month, Facebook settled charges with the U.S. Federal Trade Commission so that any sharing-related privacy changes will now be up to users to opt into. This was in response to an action Facebook made in 2009, which forced all users to make some information public, including name, profile photo and list of friends.

The full report from the Data Protection Commissioner is available here. The social network responded to the report in a note on its Public Policy Europe page.

Europe Stifling Facebook’s Targeted Ads – The European Union is set to enact legislation to ban some avenues Facebook uses to create targeted ads, specifically by making Facebook be more transparent about what user data it’s collecting.

Spotify Opens Platform to Developers – Spotify announced the company would open its platform to app developers to include things like reviews and song lyrics, according to The Wall Street Journal.

Facebook May Allow Gambling in UK - Facebook is exploring opening up the platform to gambling in the United Kingdom, according to TechCrunch, maybe as soon as 2012.

Mobile Channels Pushing Traffic for SNAP Interactive - SNAP Interactive told TechCrunch that Facebook’s recently launched mobile channels have given the company’s apps a “significant” traffic boost.

WashPo Reader Boasts 3.5M Users – The Washington Post Social Reader now boasts more than 3.5 million subscribers, according to a company statement. The growth came in just two months and is especially popular with users under 35, 83% to be exact.

Other Announcements:

Liquidus Releases Socialink 2.0 - Liquidus released the new version of its marketing application for car retailers, Socialink 2.0. New features include video integrations.

Secure.me App Protects Users on Facebook – Secure.me is an app that protects users from over-sharing or phishing from viruses on Facebook.

The Federal Trade Commission announced a settlement with Facebook this morning over charges that the social network deceived users by failing to honor privacy agreements.

Under the agreement, Facebook:

• cannot misrepresent the privacy or security of users personal information;
• must get user consent before releasing changes that override existing privacy settings;
• must prevent people from accessing a user’s material no more than 30 days after that user has deleted their account;
• has to establish and maintain a privacy program that addresses risks that come with “the development and management” of products and services and that protects the privacy of user’s information;
• and — within 180 days and every two years afterward for the next 20 — must seek out third-party audits verifying that the privacy program is in place and that it satisfies the FTC’s order.

The agreement comes nearly two years after the American Civil Liberties Union and the Electronic Frontier Foundation raised concerns over Facebook’s 2009 changes to its privacy settings that exposed personal information — namely profile name, profile picture, list of friends, current city, gender, networks, and Pages — to a larger audience than the social network previously allowed. Earlier in 2011, it was reported that Facebook would settle with the FTC over charges that these changes deceived users and violated their privacy — making any changes that retroactively expose user data an opt-in instead of a mandatory change.

At this point, Facebook would have to take pretty intentional steps against the terms of the agreement to cause the FTC to pursue action against it again. In the last year alone, Facebook has also added or changed many features that affect privacy in ways that address the FTC’s complaint — like protecting user IDs from falling into the wrong hands.

In a Facebook response post to the agreement, Mark Zuckerberg says that he feels the platform has a positive track record for providing transparency and control over privacy settings.

“That said,” his post reads, “I’m the first to admit that we’ve made a bunch of mistakes. In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we’ve done. I also understand that many people are just naturally skeptical of what it means for hundreds of millions of people to share so much personal information online, especially using any one service.  Even if our record on privacy were perfect, I think many people would still rightfully question how their information was protected. It’s important for people to think about this, and not one day goes by when I don’t think about what it means for us to be the stewards of this community and their trust.”

Zuckerberg also announced that Erin Egan will become Chief Privacy Officer, Policy and that Michael Richter will become Chief Privacy Officer, Products.

During a media call in session with the FTC, Chairman Jon Leibowitz, Bureau of Consumer Protection Deputy Director Jessica Rich, Division of Privacy and Identity Protection Associate Director Maneesha Mithal, and Division of Privacy and Identity Protection Staff Attorney Laura Berger explained carefully that the settlement does not count as a ruling that Facebook violated the law in changing its privacy settings or that it knowingly shared private user data with advertisers. They also stressed that, while this order is very broad, it prohibits any deception about privacy in the future whenever Facebook introduces changes or updates.