• Siqi Chen, CEO of Serious Business: “Friends For Sale has 3 kinds of users: 1) guys with a lot of time, 2) guys with a lot of money, 3) hot people. Usually, groups 1 and 3 do not interact much - we allow them to do that… Interestingly, some of our highest paying users are in Saudi Arabia. One woman has spent over US $30,000 in the game so far. We get threatened and bribe attempts a lot.”
• John Hwang, Director of Products, RockYou: “You should earn about $75 per day per thousand DAUs.” (I’m pretty sure that’s the stat he quoted, but not 100%.)
• Kelly Winters, Platform Program Manager, Facebook: “Circle of Moms is an interesting application that’s demographically restricted so that only females can access it. It’s grown by 500,000 users since October.”

If you look at the Top Gainers By Percent This Week leaderboard, it would be impossible to miss the theme this week: Even though Black Friday is still a week away, it’s already Christmastime on the Facebook Platform. 50% of the top 15 fastest growing apps this week are pretty simple apps with Christmas/winter themes. Taking basic applications that have proven successful and wrapping them in seasonal look & feel can be an easy way to get distribution on Facebook.

To learn more, check out the 7 apps below.

1. Santa Yourself +240,145 MAU, up 1330% this week

2. Throw Snowballs +103,153 MAU, up 129.6% this week

3. Snowball Fight +189,231 MAU, up 107.3% this week

4. Holiday Shoppe +41,651 MAU, up 43.0% this week

5. Kiss Under the Mistletoe +57,895 MAU, up 41.7% this week

6. Christmas Music Tree +61,105 MAU, up 36.5% this week

7. Christmas Countdown +41,220 MAU, up 36.4% this week

There’s a great lineup today, including:

• A presentation by Anu Shukla, the CEO of Offerpal, on tips for monetizing with virtual currency
• A panel discussion including Siqi Chen, Founder & CEO, Serious Business (developers of Friends For Sale!), Nicholas Talarico, Director of Operations, Sibblingz (developers of Make a Baby),  Markus Weichselbaum, PhD, CEO, TheBroth (developers of PuzzleBee, KickMania!, others), and John Hwang, Director of Products, RockYou.
• An update on the Facebook Platform from Kelly Winters, Platform Program Manager at Facebook.

Check out the live streaming video below:

Streaming Video by Ustream.TV

• Use Facebook’s Authentication
• See which Facebook friends are on the site
• Syndicate your activity to your Facebook feed

Tonight, CitySearch Beta launched with a very standard Facebook Connect implementation. But unlike other sites, which sometimes still require users to go through a somewhat wonky double-registration, CitySearch only asks for a site username in addition to your Facebook credentials.

The Costs

To most developers, the $375 verification fee is daunting. That’s certainly a large fee for any small to medium sized developer with limited income.

And while it may seem like a large fee, it could be more easily justified if it were only a one-time fee. After all, assuming it takes an hour to verify one application, the man hours could add up quickly on Facebook’s end - especially when you consider there are about 48,000 Facebook applications out there right now.

However the one-time fee is just a pipe-dream for now. As cited in the official documentation:

Verification will expire at the end of twelve months, and your application will need to be re-reviewed to maintain verified status. We will reach out to you at the end of your verification time period to remind you. At that point you will need to submit another verification fee, and the verification process will repeat.

This recurring $375 annual fee will be the deciding factor for many developers. This exclusivity is surely somewhat intentional, however. With fewer verified applications, verified apps will stand out much more.

The Benefits

The official word is that verified applications will have access to larger communication channel limits, a special application badge as seen above, and greater exposure within the News Feed, all to be rolled out in waves starting in early 2009. Another benefit which has not been mentioned widely is the $100 towards advertising credit. Is this really that significant? Several developers in the forums have also expressed concern over the potential for verified applications to become “favored” with respect to the Terms of Service.

Whatever life is like for unverified apps, verified apps are sure to see an increase in users. Just how much exactly is yet to be seen, as Facebook still has an important role to fulfill: educating the public about verification. If an average user does not believe there is substantial difference between verified and unverified apps, then developers are likely to be paying strictly to improve their brand in the app directory.

Conclusions

There is still a lot to be seen about the program. If you are looking for advice on whether to apply for verification or not, the most important thing is to consider is how much of a difference it will make for your target user base. If a user cannot distinguish between your application and a verified one, hundreds of successful applications and companies have already proven that you can become successful and profitable without verification.

It will also be important to see how many apps get verified. If only a small number do, then an average user is likely to use that “awesome new application” regardless of how unsafe or useless it may be.

In the coming months, the success of the program will ultimately depend on how well Facebook can impress users with the notion that unverified applications are less safe or useful than verified ones, and consequently, on how strongly users respond to this new idea.

Photo tag spamming, as it could be called, is a tactic by which marketers who have built large networks of Facebook friends proceed to “tag” their friends in photos in which they do not exist. Why? Here’s how it works.

The Viral Dynamics of Photo Tagging

Photos are extremely popular inside Facebook: Facebook gives both significant visibility on the profile page and significant distribution in the News Feed to photo-related stories. The reason Facebook is the most popular photo sharing site on the web is not because its features are the best, but because its Photos application is very tightly integrated with the social graph.

Tagging is the primary means by which photos are made social: when a user uploads a photo, they can “tag” their friends who appear in the photo. Notifications are sent to tagged friends letting them know that a new tagged photo of them exists on Facebook, and feed stories are published on both the tagger’s and taggee’s profiles.

Users who receive a notification that they have just been tagged usually investigate the photo. If they don’t want to be associated with the picture, they “detag” themselves from it. Similarly, users who see a feed story about their friends being tagged in photos often check out the photo.

Bottom line: Photo-related notifications and feed stories both get a lot of impressions and have a high conversion rate inside Facebook.

Photos as a Facebook Marketing Channel: Opportunities and Limitations

As noted in our Facebook Marketing Bible, which goes into depth on dozens of marketing tactics inside Facebook, tagging Facebook Photos (and Notes as well) can be used to drive traffic. However, legitimate marketers using these tactics should be aware of a couple important limitations:

1. If you abuse the implied social contract with your Facebook friends by spamming them with photo tags, you’re sure to quickly develop a low conversion rate and lose friends. And if you tag spam too much, Facebook’s automated spam detection systems will simply shut down your account.
2. Unlike Notes, which can include direct links to destination URLs (inside or outside Facebook), Photos can’t. While you can caption the photo or label the photo album with a few words or a URL you’re trying to push, driving traffic to a Photo page through tagging is not likely to produce a lot of traffic to a destination page.

Rather, photo tagging can be used as a way to send specific messages to targeted people - a special kind of social capital transaction not entirely unlike sending a virtual gift or writing on a wall. It can be effectively used to occasionally notify select people whose attention you want to bring to content you’ve created.

Finally, some Facebook applications are making use of photo tagging as well. TouchGraph is a friend network visualization app that outputs photo albums and (somewhat overzealously) tags photos with your friends’ names. KnockedUp is a more interesting example created by an experimental marketing group at Microsoft.

Conclusion

At the end of the day, if Facebook hears a lot of complaints about people “hacking” Facebook Photos, it will likely tighten the controls on accounts that are tagging too much, showing a high detag signal, or getting reported frequently. Marketers should think about more creative, authentic, and social ways of creating “social memes” on Facebook - as opposed to simply trying to spam until they get shut down.

It is possible that Facebook will open up the Photos API more to applications and allow for more robust and viral features to be created by the developer community. If done right, doing so could be great for users, developers, and Facebook. Until then, applications will be somewhat limited in the way they can employ Facebook Photos in their user experiences.

“What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend? … We hijack their own conversations, their own thoughts and feelings, and try to monetize it.”

And:

McConnell cited Facebook applications as a potentially valuable vehicle for advertisers, one in which they can create an environment that’s favorable for their brands and consumers alike.

While reports from the Ad Club of Cincinnati may not sound interesting to some app developers off the bat, it’s important for more developers to understand the different perspectives of people investing ad dollars in the space, so that applications can collectively become a more viable channel for a greater variety of advertisers.

Starting today, application developers can apply for verification. Facebook has formed a team that will review applications “to ensure they satisfy the company’s guiding principles around security, respect and transparency, and have demonstrated commitment to compliance with Platform policies.”

After an application has been initially submitted, it will enter a rolling approval process. When Facebook is ready to review developers’ submissions, they will be notified by email, though Facebook says that initially, “This may take several weeks as we ramp up the program.” Developers can then choose to complete the application process by submitting screenshots and answering more detailed questions. Developers must also pay a $375 fee to apply - Facebook says this fee helps cover the operational costs of the program (students and non-profits can apply for special pricing).

How will verified applications be treated differently within Facebook? Facebook’s Platform Program Manager Sandra Liu Huang told us today that “Verified apps will have greater visibility across the site.” This means verified applications will receive:

1. Greater distribution in the News Feed.
2. Higher viral channel allocation limits for notifications, requests, and emails (though Huang says “the application reputation system is still in effect”).
3. A “seal of approval” indicating that the application is verified. The first verified badges will go live in the application directory and on application about pages in early 2009. Huang also says Facebook plans on doing some “user education” around the meaning of the verified badges.

For its part, Facebook has issued more detailed information to help developers understand what exactly Facebook’s review team will be looking for when reviewing applications. Huang says the “focus is on integration points and the purpose which we think the various integrations points are for.”

While the requirements are not as high as those for Facebook’s Great Apps program (which awards apps that “advance the goals” of the Facebook Platform with even more benefits), Facebook encourages all developers to build apps that fit the goals and spirit of the program: providing engaging and trustworthy social experiences for users.

“The goal of the verified program is really to create a trusted ecosystem, so users continue to engage with applications and try new ones,” Huang says.

Public search listings are Facebook’s way of exposing user information to Google. Before today, the default public search listings included users’ name, profile picture, network, and a few friends’ photos. Now, Facebook has added Pages that users are a fan of to users’ default public search listings.

This means that if a user is a fan of The Gap, U2, or Barack Obama, that information is now listed in that user’s public search listing. In addition, each of those items listed point back to Facebook Pages - such as The Gap’s Facebook Page, U2’s Facebook Page, and Barack Obama’s Facebook Page.

The net result? 112,000 links to The Gap’s Facebook Page just appeared this weekend. 188,000 links to U2’s Facebook Page just appeared, and 3,100,000 links to Obama’s Facebook Page just appeared.

Considering that Facebook turned on links to Pages from about 120 million profile page public search listings, the number of new internal links to Pages on the facebook.com domain this weekend likely increased by several hundred million.

The SEO experts in the crowd will be able to gauge how impactful this change will be in light of the thousands of complex factors Google looks at when deciding who to give SERP real estate to.

Facebook describes the update to users as a way to make it easier for friends to find you in search results, and that is surely the case:

But ultimately for marketers, this step by Facebook increases the weight Google will give to brand Pages. Brand and marketing managers should not be surprised to see their Facebook Pages rising in Google search results in the months ahead.

Just two weeks ago, Facebook revamped its virtual currency system used for purchasing Facebook gifts. While they may appear minor at first, the changes enabled a more flexible pricing model designed to both 1) allow for increased variety in inventory “quality,” and 2) increase the total volume of gifts sold.

Now, this weekend, Facebook announced that it has launched a new service that will send users email notifications of upcoming friends’ birthdays. While this change also may appear minor at first, it’s a signal that Facebook is seriously eyeing the virtual gifts business, and is willing to play in a space that has several large players on the Facebook Platform.

We recently spoke with Raj Lalwani, CEO of SocialCalendar, one of the fastest growing applications on the Facebook Platform since the redesign launched 2 months ago, and the largest birthday notification and gifting app. Lalwani said a main factor he attributes SocialCalendar’s growth to is:

The compelling context of the application’s emails and notifications - reminding users to send a message or give a gift to their friends when it’s their birthday or a national holiday works quite well.

Lalwani also noted that:

SocialCalendar’s business plans call for pressing hard into gifting and gift cards, and the app has full integration with Amazon’s API for gift giving and wish lists. Soon, the company will make a natural move into high margin virtual gifts.

Facebook’s move is sure to make Lalwani, and other developers of large birthday notifications and gifting services like BigDates Solutions, makers of Birthday Calendar, quite nervous. However, it shouldn’t come as a total surprise. Birthday notifications have been a big business online for years, and Facebook has been showing upcoming birthdays on the home page for quite a while now.

It is important to note, however, that Facebook appears to be taking a careful approach with the launch of the service. It is currently an “opt-in” feature on the Notifications Settings page - all users will not start automatically getting birthday reminders from Facebook starting this week. However, it is possible that Facebook will encourage or make it very easy for users to turn on the feature in the future.

Ultimately, this is likely to be a market shared by Facebook and application developers. Facebook is unlikely to build out the robust calendaring, event planning, and in-depth shopping features that are core to the Social Calendar and Birthday Calendar user experiences any time soon. However, Facebook is quite likely to promote its own virtual gifting platform increasingly heavily around the birthday experience.

Just like any other social media service, Facebook needs to build diverse revenue streams in order to best handle challenges in the advertising markets. Adding reminders around events likely to drive virtual gifts sales probably looks like low hanging fruit.

AppData for Social Calendar:

AppData for Birthday Calendar: