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Inside Facebook

Inside Facebook

Facebook settles Sponsored Stories lawsuit without disclosing terms

Posted: 22 May 2012 04:06 PM PDT

Facebook today settled a proposed class action lawsuit that contested how the site uses names and images of users in its Sponsored Stories ad product.

The plaintiffs of Fraley et al v. Facebook, Inc. asserted that the social network’s new ad type turns users into spokespeople, and thus entitles them to compensation under California law. The company did not share terms of the settlement in court documents and representatives did not offer comment on the case. Had Facebook not settled, it might have risked what it sees as a major component of its future advertising business.

Sponsored Stories, introduced in January 2011, allow advertisers pay to promote a user’s actions — such as Liking a page, playing a game or sharing a link — to their friends. However, California's Right of Publicity Statute prohibits the use of another person's name, voice, signature, photograph or likeness for advertising without a person’s consent. According to Reuters, Facebook claimed it was immune under the law's "newsworthiness" exemption because the plaintiffs are considered public figures to their friends and their actions on the platform are generally newsworthy.

Some advertisers have found Sponsored Stories to have lower costs and higher clickthrough rates than Facebook’s traditional ads. Earlier this year Sponsored Stories became part of Facebook’s initial steps to monetize mobile usage with these ads now eligible to be shown within mobile News Feed. The company is also testing options for advertisers to create Sponsored Stories that promote Open Graph activity, including actions, such as what users watch, read or listen to. We’ve also seen the social network increase the size and design of Sponsored Stories within the desktop feed recently.

Facebook IPO raises questions for regulators; SEC, FINRA likely to investigate

Posted: 22 May 2012 02:19 PM PDT

Regulators suggested today that they will review Facebook's initial public offering following reports of the Nasdaq's technical issues and possible violations by underwriters, according to Reuters and the Wall Street Journal.

Securities and Exchange Commission Chairman Mary Schapiro and Financial Industry Regulatory Authority Chairman Rick Ketchum separately told the press that their agencies would be looking into allegations and concerns surrounding the much-scrutinized IPO. [Update 5/22/12 2:27 p.m. - Massachusetts Secretary of Commonwealth William Galvin has issued a subpoena to Morgan Stanley over it discussions with investors on Facebook prior to the IPO.]

Sources tell Reuters that Morgan Stanley, JPMorgan Chase and Goldman Sachs revised their earnings projections for Facebook during the company's roadshow but did not make the change widely available to potential investors. Business Insider's Henry Blodget explained that the underwriter analysts reduced their estimates after Facebook had filed an amendment to its IPO filing, which included a note that user growth continued to outpace revenue growth in the second quarter of 2012. He wonders whether Facebook had any direct involvement in the analysts adjusting their projections. [Update 5/22/12 3:02 p.m. - Blodget now says he has sources confirming that a Facebook executive told analysts to lower their estimates.]

Although companies do not release their own financial forecasts before an IPO, they generally provide guidance to underwriters whose analysts determine an estimate. Any information a company offers leading up to an IPO is required to be made available to all potential investors, however, bankers often favor their institutional clients and share information with them before disseminating it to retail investors.

As for issues with the Nasdaq, the exchange experienced a number of technical issues on Friday that could result in $13 million in compensation for bad trades. A number of investors were unable to verify whether their orders went through for several hours.

These problems seem to have led some investors to be more wary of Facebook's stock, which has fallen to $31 today after initially listing at $38 and going as high as $45 on Friday morning. Shares are down 8.9 percent since Monday and down 18 percent from the offering price.

Investing in Facebook: John Corpus of Milyoni

Posted: 22 May 2012 01:24 PM PDT

This week, Inside Facebook asks people who have built businesses on the Facebook platform why they believe in the company. These are the people that are truly invested in Facebook, whether or not they bought stock.

For Part 2 of our series, we spoke with Milyoni founder and CEO John Corpus. Milyoni is the Facebook commerce and social entertainment company best known for making films and live events available for streaming on the social network.

Seeing the potential of Facebook

Three years ago when Corpus was CIO of Mervyns department store, he saw the rapid growth of Facebook as an opportunity for commerce. At the time, the social network had about 150 million users. Although that is far less than the more than 900 million using the site now, it was a major milestone in 2009. Corpus says the growth was especially interesting when compared with trends showing that online display and search conversions were declining.

"The three rules of retail are location, location, location," Corpus says. "Facebook was where people were spending more time."

He says it was the amount of interaction and the speed of sharing happening on the site that stood out and led him to want to build a company on the platform.

Developing a business idea

When Corpus founded Milyoni (pronounced "million-eye") in February 2009, the company was focused on helping businesses sell physical goods. Milyoni offered the "iFanStore," an e-commerce platform for Facebook, Twitter and MySpace. It was one of the few e-commerce apps that let users stay within Facebook during an entire transaction and then share their activity with friends.

The company gained a lot of entertainment-focused clients, including HBO, the NBA, UFC and The Onion. These companies were selling things like t-shirts and DVDs through the app. But Corpus says that a conversation with Warner Bros., at the end of 2010, led to a whole new market: digital goods.

Milyoni and Warner Bros. were discussing how video was incorporated in the app when an executive asked whether a full feature could be shared on Facebook. The companies decided to try it, and in March 2011, they made "The Dark Knight" available for streaming on Facebook with users paying for the rental using Facebook's platform currency, Credits. The success of that test and others led Milyoni to develop what it calls "Social Cinema" for movies and "Social Live" for things like concerts and sporting events. The company is now primarily focused on these areas rather than selling physical goods through Facebook.

Confidence in Facebook

Corpus says Milyoni could expand to other platforms in the future, but for now it's focused on Facebook.

"This is not a fly-by-night type of business," Corpus says, pointing to Facebook's latest user numbers and engagement statistics, which includes 300 million photo uploads and 3.2 billion Likes per day. "From a foundational standpoint, they're here to stay."

Milyoni's own success on the platform is further proof for Corpus, who says Facebook users have watched more than 700,000 minutes of Milyoni content in the past three months. The company now offers more than 150 titles from 16 studios available on Facebook, and it plans to bring 700 more titles and 30 more live events to the platform this year.

Facebook's future

To capitalize on the social network's growth in users and engagement, Facebook now has to focus on growing its revenue streams through advertising, mobile and commerce, Corpus says. Social games were a good start, but he says there is a lot more opportunity around social entertainment where studios and other content providers can connect directly with their consumers.

Facebook's payments revenue was $186 million in the first quarter of 2012, up 98 percent compared to the first quarter of 2011 when Credits were not mandatory for social games transactions. However, most of that revenue is still from sales of virtual goods, not digital goods or experiences. Milyoni is one of the few companies helping to pioneer the use of Credits outside the realm of games. Corpus says the social network needs to do more to get users to understand Credits so that they are more comfortable using the currency and spending money within apps. He sites PayPal as an example of another company that took a few years before it was widely considered secure. Corpus says that making it easier for users to see and manage their Credits accounts could help Facebook in this area.

"They have to let people know it's not just Monopoly money," Corpus says. "They have to provide people with a level of confidence and security to make it a more trustworthy place."

Read Part 1 of our series, which profiles Clara Shih of social marketing software company Hearsay Social.

Rob Zombie, Serve, Target, Ray-Ban, Samsung, more on this week’s top 20 growing Facebook pages

Posted: 22 May 2012 10:04 AM PDT

Facebook's mobile application for feature phones topped our list of the fastest growing Facebook pages as measured by Likes this week. Musicians, Facebook, YouTube, a few movie pages and brands like Target and Ray-Ban rounded out the list.

Pages on our list this week grew from between 357,200 to 2.6 million Likes. We compile this list with our PageData tool, which tracks page growth across Facebook.

# Name Total Likes People Talking About Daily Growth Weekly Growth
1   Facebook for Every Phone 89,216,745 2,836,432 +372,633 +2,645,489
2   Rob Zombie 1,851,994 27,773 +466 +979,482
3   Andaz Apna Apna 837,833 3,604 +349 +600,012
4   LUX 595,756 906 +126 +590,282
5   Samsung Mobile USA 5,889,231 604,665 +69,475 +537,159
6   Adele 28,738,324 565,979 +66,984 +497,406
7   RealMsLaurenLondon 522,026 11,238 +32 +491,890
8   Titanic 23,922,569 566,844 +60,494 +452,417
9   Jeremy Lin 954,881 552,606 +34,979 +438,508
10   Rihanna 56,128,843 753,451 +58,302 +433,580
11   The Simpsons 50,674,946 841,397 +54,353 +419,958
12   Serve 503,633 374,353 +25,365 +419,867
13   Facebook 66,877,793 451,328 +59,510 +404,236
14   Eclipse 5,564,067 57,491 +4,434 +399,854
15   Ray-Ban 3,485,020 287,717 +59,974 +399,406
16   YouTube 57,826,245 445,547 +53,951 +389,501
17   Target 12,442,767 402,109 +55,638 +381,990
18   Slotomania – Slot Machines 4,387,218 605,582 +43,965 +367,094
19   FC Barcelona 31,181,615 802,392 +48,621 +358,974
20   Eminem 57,250,003 451,949 +47,901 +357,182

Facebook for Every Phone has been a leading page for a few weeks now since users of the app are prompted to Like the page when they download it. Musician Rob Zombie came in at No. 2 likely as the result of page consolidation. Other musicians, Rihanna and Eminem, make frequent appearances on our list. This week it could be due to Rihanna’s role in “Battleship” and Eminem’s latest single.

No. 3 on our list was Hindi movie “Andaz Apna Apna,” which also appears to have seen a spike in Likes because of page consolidation. “Titanic” continues to grow after the film was re-released in theaters in 3D.

Samsung Mobile USA took the No. 5 spot largely as the result of Facebook ad campaigns. The company has been using its page to promote products and a concert for customers in New York City. Target also continues to run Sponsored Stories that have kept the page on our list for a few weeks.
The prepaid account service Serve saw its page grow, likely because of a Farmville integration. Zynga today announced a partnership with American Express to launch a the Zynga Serve Rewards program that lets players earn Farm Cash when they use the FarmVille prepaid credit card.

Buddy Media becomes preferred ad partner for Group M, launches new features and API

Posted: 22 May 2012 08:00 AM PDT

Social marketing software company Buddy Media announced Monday that its ad platform is now the preferred choice of major advertising media company GroupM. The news follows the launch of a number of new features for the platform, including a social data API released last week.

GroupM, which serves as the parent company to WPP media agencies will roll out Buddy Media's BuyBuddy ad platform to global agencies including Maxus, MEC, MediaCom, Mindshare and M80. Although the deal isn't exclusive, becoming GroupM's preferred partner bodes well for Buddy Media, which takes a percentage of ad spend made with its ad tool. As the world's largest advertising media company in terms of billings, GroupM spent $200 million in Facebook advertising in 2011.

With the new social data API, brands and agencies that use Buddy Media's management software can integrate data from Facebook, Twitter, YouTube, Google+ and web apps into other services and analytics platforms like Omniture. Although the company does not suggest a preferred use case for the API — saying marketers can "do whatever they want to" with the data — this should give marketers flexibility in how and where they view Buddy's social media marketing data.

Buddy Media also announced that its polls, product galleries, photo galleries, video players and other apps will soon be available for mobile devices. Users will be able to toggle between desktop and mobile views as they build their applications with Buddy’s “profile builder” tool. New features that are live now include goal and conversion tracking. With goal tracking, marketers can group content together as a campaign and set goals to measure the success of that campaign.

onsdag den 23. maj 2012 at 07.24