Inside Facebook

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A Reason Why Facebook Viral Channels Could Make a Comeback in 2011 Posted: 06 Mar 2011 10:00 AM PST Over the course of the last four years, Facebook has made a series of changes to its “viral” communication channels to try to find the right balance between providing distribution opportunities for developers and creating the most engaging user experience. In the beginning, Facebook’s communication channels – invitations, notifications, and the news feed – were very open and ungoverned, and developers fought for growth and retention by sending a lot of messages through those channels. Over time, Facebook added a series of checks and balances, including algorithmic allocation limits and a growing policy enforcement team to handle the more subjective cases, and changed the functionality of the channels as well to limit decreased user engagement due to too many “spammy” messages. Ironically, even though social games will generate over $1 billion in primarily virtual goods-based revenue this year, there was no one at Facebook in 2007 whose job was to create a gaming platform. As a result, because Facebook was optimizing for many variables and lacked granular insight into the effects of its viral channel changes on the dynamics of developers’ businesses during the two years after the Platform launched, the Facebook Platform developed a reputation for being a high flux environment in terms of distribution and cost of user acquisition. And over the last year and a half, Facebook’s overall tightening of its viral channels has made it harder for developers, especially small developers, to get the kind of distribution they saw in the past, strengthening the distribution advantages of scale enjoyed by Zynga and other large developers. However, with the Credits rollout over the last year, the Facebook Platform has reached a new level of maturity. While requiring developers to use Credits a year or two ago would have caused an uprising, developers now are more amenable to having a direct economic relationship with Facebook. And while that definitely means a loss of some individual developer freedoms — like direct billing relationships with users, and all the other benefits of owning the payments flow — one thing it does mean is there is now someone at Facebook (actually a team) looking at dashboards that have a Credits revenue gauge on them. And that means Facebook is only more likely to become more knowledgeable about and concerned with the overall health of developers’ businesses over time. What could that mean for overall trends in Facebook’s viral channel products? Overall, it should mean that Facebook is now even less incented to make changes that could make a traumatic impact on application distribution, and more incented to make changes that benefit engagement and retention. As Facebook gets more “hooked” on Credits revenues, it’s going to be harder to wean off of them, unless games for some reason are creating larger problems for Facebook as a whole. Already, we’ve started to see some new viral channel functionality go live in the last three months, like Facebook beginning to deliver application invitations via the notifications channel. It wouldn’t be surprising to see Facebook add more features and functionality over the remainder of the year.

This Week’s Headlines From Across Inside Network Posted: 06 Mar 2011 08:01 AM PST Here are all the latest headlines from around Inside Network. Inside Mobile Apps Tracking the convergence of mobile apps, social platforms, and virtual goods. Monday, February 28th, 2011 Ridge Racer Accelerated Drifts Onto The iPad Photos From Inside Network Happy Hours — Berlin & Barcelona Despite a Raft of New Competitors, Unofficial Facebook iPad App Friendly Remains on Top Facebook Will Let Developers Ask For Mobile Numbers, But Will Do More to Highlight Risks Tuesday, March 1st, 2011 Updated: A Google In-App Payments Solution for the Web Appears Slated For Launch in May Germany’s TinyWings Dethrones Angry Birds & Other Rising Apps Analysis: What’s Behind Facebook’s Friendfeed-Style Acquisition of Beluga? Wednesday, March 2nd, 2011 Simplicity Proves Popular With Tiny Wings on iPhone A Single Developer Tries to “Unionize” Others to Air Grievances About The Android Marketplace Bowmaster Hits a Bullseye, Tops Free iPad App Charts Thursday, March 3rd, 2011 iPad 2: What Are The Possibilities For Developers? Flurry Starts Supporting Incentivized Video Advertising in Mobile Apps New Hires in Mobile: TinyCo, EA Mobile, Gameloft & More Can The Phone Call Be Reinvented With The Web in Mind? Thrutu Takes a Shot PapayaMobile, Applications For Good Team Up to Make Socially-Conscious Apps Viable Friday, March 4th, 2011 Think in 3D With iOS Puzzler de.Mess.ify Mobile App Roundup: EA, Investments, Android & More Saturday, March 5th, 2011 EA To Launch Dragon Age Legends With Facebook, HTML5 Mobile Simultaneously Inside Social Games Covering all the latest developments at the intersection of games and social platforms. Monday, February 28th, 2011 Ravenwood Fair Shows No Signs of Slowing on This Week’s List of Fastest-Growing Facebook Games by MAU Paramount to Promote Animated Features Film Rango with Zynga FrontierVille Tie-In Photos From Inside Network Happy Hours — Berlin & Barcelona How Zynga Defused Its FarmVille Time-Bomb GDC: An Insider’s View of CityVille, From Idea to Launch Tuesday, March 1st, 2011 Raising Knights and Slaying Trolls With Social Empires on Facebook Updated: Google In-App Payments Appear Slated For a Full Launch in May Top 25 MySpace Games for March 2011 Top 25 Facebook Games for March 2011 GDC: Is Intuition of Metrics Better for Social Game Design? Wednesday, March 2nd, 2011 Cities, Cars, and Board Games Leading This Week’s List of Fastest-Growing Facebook Games by DAU Social Games vs Multiplayer Games: A Commentary on Raph Koster’s Social Mechanics Presentation Highlights This Week from the Inside Network Job Board: Digital Chocolate, Jagex Games, & More Interview: Will Harbin on the Evolution of Backyard Monsters Thursday, March 3rd, 2011 Gossip Girl: Social Climbing at Its Facebook Best New Hires in Social Gaming: Digital Chocolate, GameHouse, Kabam, & More Lessons In Facebook Game Design: Mike Sellers on Online Alchemy’s Holiday Village Friday, March 4th, 2011 BitRhymes Grows on Facebook With Business Sim Game Salon Street Facebook Credits GetBalance API Helps Developers Dynamically Price Virtual Goods Core Games Make an Appearance on This Week’s List of Emerging Facebook Games Social Gaming Roundup: Loot Drop, Advertisements, Poker, & More Thanks To Our Sponsors Inside Facebook Tracking Facebook and the Facebook platform for developers and marketers. Sunday, February 27th, 2011 All of Facebook’s Like Buttons on Third-Party Sites Now Publish a Full News Feed Story Monday, February 28th, 2011 Kontagent Real-Time Social App Monitoring System Tracks Errors and User Reactions Profile Banners, IQ, Friends and Chat on This Week’s List of Growing Facebook Apps by MAU Featured Facebook Campaigns: AVG and Zynga, People Magazine, Hyundai and Linkin Park The Facebook Marketing Bible March 2011 Edition Is Now Available Facebook May Highlight App Permissions for Contact Info, Prevent Minors from Sharing Tuesday, March 1st, 2011 Facebook Adds 17 More Companies to Its Preferred Developer Consultant Program Facebook’s New Comments Box Plugin Filters Website Comment Reels by Relevance Mobile Group Messaging Developer Beluga Acquired by Facebook Top 25 Facebook Games for March 2011 New Facebook Credits Rules Limit In-Game Offers and Rewards to Protect User Data Facebook Announces New Currencies, Payment Options, Credit Spending Reports Wednesday, March 2nd, 2011 Analysis: What’s Behind Facebook’s Friendfeed-Style Acquisition of Beluga? Formspring, Profile Stats, Cars and Dating on the Top 20 Growing Facebook Apps by DAU Highlights This Week from the Inside Network Job Board: MXP4, MTV Networks, & More Facebook Brings Back Reverse Chronological “Most Recent” View to Page Walls Facebook’s Start-and-Stop Growth in China Taiwan and Hong Kong — A Closer Look Thursday, March 3rd, 2011 Facebook Careers Postings: Developer and Sales Manager Positions, Platform Partnerships, and More Facebook Hires and Departures: Engineering, Mobile, Latin America and More Ifeelgoods Lets Brands Give Away Facebook Credits For Twitter Follows and Retweets As Facebook Begins Enforcing Ad Provider Compliance, 24 More Companies Join Apoproved List Facebook Allows Users to Suggest Edits to Places Pages Friday, March 4th, 2011 Videos, Photos, Foreign Language and More on This Week’s List of Emerging Facebook Apps The Facebook Credits GetBalance API Helps Developers Dynamically Price Virtual Goods Facebook Roundup: Stock, Microsoft, Google, Blackberry, SocialEyes, Places and More Thanks to Our Sponsors

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