Facebook plans to start charging you money for your update on your profile

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Now that Facebook has conducted a small test of charging users to promote their status updates, isn't it inevitable that, as a public company, Facebook will have to start dinging users in earnest?

The other day, one of Facebook's bigger clients was privately complaining to me.
This gentleman is in charge of digital advertising for a worldwide company. He told me: "First they charge me for ads. Then they try and charge me again in order to make sure those ads get seen by more people."
He was referring to Facebook's presentation in February when it suggested brands have "Premium ads." You know, ones that might be enjoyed by more than the estimated 16 percent of fans who actually see a brand's messaging currently.
It's hard not to imagine that -- despite Mark Zuckerberg's insistence that Facebook will always be free -- the soon-to-public company will have to seek more revenues from its biggest franchise: every single one of its users.
The principle behind the test aimed at users this week was the same as that aimed at advertisers: "Not too many people see your very important Facebook updates. So pay us and we'll make sure they do. Or at least we'll try."
The method suggested was that your important post would be highlighted -- for a fee of 1.80 New Zealand dollars (around $1.42). Actually there seem to have been several price points, one going up to the $2 mark.
The situation for users is even worse than that for advertisers. On average, a mere 12 percent of your friends see your status updates.
One can understand Facebook's problem. Too many people use it. Too many posts are being created. Too many people miss most of what's there. Yes, it's just like Twitter.
To make this more disturbing for the company, there's a joyous train hurtling in the other direction: the Church of Wall Street.
Those who demand that Mark Zuckerberg pay them the same respect as he would pay God -- yes, by wearing a jacket -- are only interested in money rolling in.
When they lose money -- such as the $2 billion misplaced by JP Morgan Chase this week -- they might bow their heads for a short moment and carry right on doing the same thing.
But if Facebook's numbers fall short, they will be all over the company like a scratchy hoodie.
It is that sure knowledge that is driving Facebook to find every possible avenue of revenue.
Facebook is trying to make as much money out of brands as it can. It is trying to sell them every possible interpretation of its numbers in order to squeeze out cash.
In turn, brands can see that Facebook has huge numbers, but they aren't seeing the sorts of results that make them want to anoint the site as their primary medium. Facebook is still cheap, and therefore money spent there is cheap money.
But with hundreds of millions of people on its pages, Facebook hopes to begin to squeeze pennies that will multiply into dollars. It is the ancient idea of nickle-and-diming.
This week's New Zealand experiment comes from the same helpful impulse that spawned fees for your first checked bag at the airport.
In other words, now that we've got you, give us something. Of course, one of the difficulties if Facebook succeeds in charging customers for, say, actually having people seeing their updates, is the possibility that its relationship with its users will change.
Currently, Facebook can switch its privacy rules and drag you along because you are aren't a paying customer.
But once you are, mightn't people begin to take on a different attitude? A paying customer might expect a higher level of service, of feedback -- and, yes, of privacy.
Facebook's privacy-rule change this week allows it to use your face to advertise products away from Facebook.
If you were now being charged in order for your friends to see your posts, mightn't you be tempted to charge Facebook for the privilege of using your lovely face to sell, say, 55-gallon tubs of lubricant? Retweet this story

Is Facebook ahead IPO excitement creating intensity?

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Facebook frenzy is spreading ahead of the company's big-time stock market debut, with anything from Mark Zuckerberg's hoodie to the billion-dollar buy of Instagram sparking controversy.

Speculation about the promise or pitfalls of owning a piece of the world's leading social network was so feverish by the weekend that one report contended there was too much demand for the stock while another said it was lacking.

Facebook, already assured of becoming one of the most valuable US firms when it goes public, has been on an intense marketing drive ahead of its expected trading launch on the tech-heavy Nasdaq on May 18.

In a filing with the US Securities and Exchange Commission, Facebook set a price range of $28 to $35 for its shares, which would value the firm at between $70 billion and $87.5 billion.

When Google went public in 2004, its valuation was $23 billion, and now it has a market value of $200 billion.

Some are offended by the price set for Facebook, a site founded by Zuckerberg just eight years ago from his Harvard dorm room. Still only 27, he will retain 57.3 percent of the voting power of the shares.

Others expected better -- some analysts predicted a price of $44 a share in the short term, and a much higher figure in the long term.

At the midpoint of the price range, the sale of 337 million shares would generate $10.6 billion, making Facebook's offering the largest IPO of a tech firm.

Despite the intense spotlight on Facebook coffers swelling with a stock sale, analysts agree that for most of the social network's more than 900 million users, the focus will be on changes to the service -- not ownership of the firm.

"What they hope, I think, is that Facebook will continue to innovate and make the service more interesting and more relevant," said Creative Strategies principal analyst Tim Bajarin.

"Facebook is not extremely specific on what they will do with the money."

The IPO also means wealth will be heaped on longtime employees compensated with stock at the startup launched in 2004.

"You give a group of people in a company a ton of money, you get some weird behavior," said independent Silicon Valley analyst Rob Enderle of Enderle Group.

"Facebook itself is going to change, and not necessarily for the better."

Workers made rich with company stock have been known to leave for new endeavors or to follow dreams. Sudden wealth can change people's attitudes or inspire spending binges, Enderle noted.

"A lot of stuff unrelated to work happens that can lead to turmoil," Enderle said. "It is going to be an interesting few months. Already Zuckerberg is acting outside the envelope."

Zuckerberg was bashed by some analysts for wearing his trademark hoodie and jeans to pre-IPO roadshow meetings with Wall Street types accustomed to business attire.

"Showing up in front of suited financial analysts in a hoodie is not the smartest thing," Enderle said. "It just pisses off people who can wreck your IPO."

Zuckerberg was also second-guessed for orchestrating a billion-dollar stock-and-cash deal to buy the startup behind hot smartphone photo-sharing application Instagram.

The price tag evidently caught the attention of the US Federal Trade Commission (FTC), which is reported to be reviewing the takeover. Facebook declined to comment regarding an FTC probe of the Instagram deal.

Companies going public usually wait until takeovers are completed to spare investors uncertainty.

Becoming a publicly traded company could result in Zuckerberg being more constrained because of accountability to stockholders and regulators, according to Bajarin.

"To be fair, once you go public you have fiduciary responsibilities and are in a different scenario," Bajarin said. "(Zuckerberg) could never do that Instagram deal for a billion dollars like that after an IPO."

Facebook has kept busy in the weeks leading up to the IPO.

The social network unveiled an online center for smartphone applications synched to Facebook and bought mobile discovery startup Glancee. Microsoft announced it is weaving feedback from Facebook friends into personalized Bing search results.

Facebook confirmed Friday it was creeping into the territory of Dropbox, Google and others with the roll-out of a service that lets people store files in the Internet "cloud" for access from a variety of devices.

"Facebook wants to create an open social network that allows them to get more aggressive in the way they connect people," Bajarin said.

"Mark wants Facebook connected to all kinds of other sites, and this new model can be backed with more cash."

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Youtube: Do video sharing app demise youtube?

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Mobile apps that promote photo and video sharing are eating up more of consumers’ time and representing a threat to YouTube‘s dominance, according to a new study.
Flurry Analytics tracked 180,000 apps from October 2011 to March 2012 and found an 89% jump in minutes spent on photo and video apps. Next on the list was music, productivity, social networking and entertainment. Consumers spent 87 minutes a month using such apps — including Viddy and Socialcam — in October and 231 minutes in March, according to Flurry. From July to March, meanwhile, time spent rose 166%. (The research did not include stats from Instagram, and Flurry doesn’t break out figures for photo-sharing vs. video-sharing apps.)
Researchers then compared those figures to YouTube’s. What did they find? YouTube still has a big lead, although the video apps are making inroads. Consumers spent 425 minutes, on average, on YouTube in March, which is far ahead of the time spent on mobile photo and video-sharing apps. However, YouTube’s time spent average fell from 472 minutes the month before.

A blog post from Flurry expands on this phenomenon:

“While mobile app video consumption grew more than online consumption, the gap in usage at the end of 2011 was still meaningful. During 2012, however, is where things get interesting. As online video consumption dropped by 10%, mobile video app consumption increased by another 52%.
While it cannot be concluded that mobile video apps are cannibalizing YouTube, the shift in time spent between these two platforms appears to be a signal of disruption. Think of it this way: With every mobile video you share of friends, family, vacations, parties and weddings, you are likely loading another bullet in the chamber for Web 3.0. For YouTube, it appears they need to run, outrun your gun.”

For Flurry, this is just the latest sign of the web’s transition from the social media-dominated era of Web 2.0 to the mobile-first period of Web 3.0. The research company found last June that for the first time consumers were spending more time on mobile apps than on the web. That data supported a hypothesis from Wired in August 2010 declared that “The Web is Dead,” pointing to a shift in consumer usage of the web to apps.
A Google rep says YouTube doesn’t see much of a threat from mobile devices: “Developers bringing more video applications to the Web is good thing for consumers.” The rep pointed out that YouTube has more than 3,000 partners using its open API to upload hundreds of thousands of videos every day. Mobile playbacks on YouTube have tripled in the last year to more than 500 million views a day and every minute over three hours of video is uploaded to YouTube from mobile devices. Says the rep: “We continue to invest in this area and developers can expect more improvements in the months ahead.”

Related Story: Entertainment (Is matt Fiddes the fathher to Micheal Jackson children?) Retweet this story

FACEBOOK:will you give up your citizenship just because of tax

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Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.

Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.

Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO.


“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.

Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin renounced his U.S. citizenship “around September” of last year, according to his spokesman.

Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as “certain foreign- sourced income,” according to a government website on tax policies there.

Exit Tax

Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.

Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, said Avi-Yonah. “Once it’s public you can’t fool around with the value.”

Saverin previously scuffled with Zuckerberg, his Harvard University classmate, over his ownership in Facebook. Saverin sued him and settled for an undisclosed amount.

The 2010 movie “The Social Network” added to Saverin’s fame after it portrayed him as a scorned friend who provided the company’s early financing and then was squeezed out. In the film, written by Aaron Sorkin, Saverin was portrayed by Andrew Garfield, who will play Spider-Man in “The Amazing Spider- Man.”

Saverin’s Investments

Saverin moved to the U.S. in 1992, and became a citizen in 1998, his spokesman said. He has invested in Asian, U.S. and European companies, according to his spokesman.

He plans to invest in Brazilian and in other global companies that have strong interests in entering the Asian markets. “Accordingly, it made the most sense for him to use Singapore as a home base,” Goodman said in the statement.

His U.S. holdings include Jumio Inc., an online payments company, and ShopSavvy Inc., a price-comparison service.

Renouncing citizenship is an option chosen by increasing numbers of Americans. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records.



Income-tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year, and rates on capital gains and dividends also are scheduled to rise unless Congress blocks the increases.

‘Tax Cost’

“It’s a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice,” said Richard Weisman, an attorney at Baker & McKenzie in Hong Kong. “The tax cost, complexity and the traps for the unwary are among the considerations.”

Some of the world’s largest wealth-management firms have ramped up efforts to fight tax evasion ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc, Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. all say they have turned away business.

The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. That means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which may depress banks’ returns.

Facebook plans to price its IPO on May 17, offering 337.4 million shares at $28 to $35 each. The shares will be listed on the Nasdaq Stock Market under the symbol FB. Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc. are leading the sale. Retweet this story

'Angry Birds' Game Maker to Lunch a New Game called "Amazing Alex",

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Finnish entertainment media company Rovio, creator of the global hit game "Angry Birds", said Friday it will launch successor "Amazing Alex", a remake of an existing idea, this year.

The game will be an updated version of "Casey's Contraptions" for which Rovio acquired the rights from developers Snappy Touch and Mystery Coconut.

"We are launching a new game. It will be called 'Amazing Alex'. It will come out in spring, shortly before summer", Rovio's Ville Heijari told AFP.

"In fact, we're redesigning and renaming" Casey's Contraptions, Heijari said.

The new game, like "Angry Birds", is to allow for various spin-offs.

"Angry Birds" reached more than one billion downloads this month according to Rovio, with sales hitting 75.4 million euros last year, 30 percent of which was for merchandising Retweet this story

music-movie streaming firm mSpot, is being bought Samsung by

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Samsung Electronics announced it is buying mSpot to take advantage of the Silicon Valley company's prowess at streaming music and films to smartphones or tablet computers.

The South Korean consumer electronics powerhouse did not reveal what it is paying to acquire mSpot, which is based in the Northern California city of Palo Alto.

"MSpot shares our vision to bring a best-in-class cloud and streaming entertainment experience to consumers and they've backed it up with great technical solutions," said Samsung media solution center senior vice president TJ Kang.

Samsung is buying mSpot's technology and team for a price estimated in online reports to be less than $10 million.

Samsung said it will pre-install mSpot music, video and radio services in new mobile devices.

"With our combined resources, we are looking forward to redefining media consumption across the mobile universe with cloud services," said mSpot chief executive Daren Tsui.

Analysts agree that digital content and fun applications on smartphones is vital to the popularity of smartphones or tablets in the fiercely competitive gadget market and can be more important to consumers than slick hardware.

MSpot was founded in 2004 and its services include digital lockers for storing music in the Internet "cloud" and online streaming of songs and films.

The company faces heavyweight competition from Google and Amazon.com, which have each offer online music storage and streaming services. 

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Facebook buys Glancee a mobile discovery startup

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Mere weeks from a multi-billion-dollar debut on the stock market, Facebook has ramped up its focus on mobile lifestyles with the purchase of "social discovery" startup Glancee.

Glancee founders behind the smartphone application for finding like-minded people nearby joined the Facebook team in what was seen as a talent grab by the Menlo Park, California-based social network.

"We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds," said a message at the San Francisco startup's website.

"We wanted to make it easy to discover the hidden connections around you, and to meet interesting people," Glancee added.

"We are therefore very excited to announce that Facebook has acquired Glancee and that we have joined the team in Menlo Park to build great products for over 900 million Facebook users."

The Glancee application was removed from Apple's online App Store over the weekend after Facebook revealed the acquisition on Friday.

Facebook has made a priority of following its users onto smartphones at the heart of digital age lifestyles even though the social network has yet to make clear how it plans to make money doing so.

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Facebook has made a priority of following its users onto smartphones at the heart of digital age lifestyles even though the social network has yet to make clear how it plans to make money doing so.

The financial terms of the Glancee purchase were not disclosed but were believed to be far less than the billion dollars Facebook recently spent on the startup behind photo-sharing smartphone application Instagram.

Glancee software ran in the background on smartphones, using Facebook and other online resources to match people based on similar tastes or interests and then alerting users to when kindred spirits were in the vicinity.

Facebook executives are on an investors "road show" this week, an intense marketing drive ahead of the company's expected trading launch on the tech-heavy Nasdaq on May 18.

For small investors, the California firm has produced a slick half-hour video set to music that explains the mission, products, finances and future of the company, with chief executive Mark Zuckerberg doing the narration himself.

In a filing with the US Securities and Exchange Commission last week, Facebook set a price range of $28 to $35 for its shares, which would value the firm at between $70 billion and $87.5 billion.

Based on the estimated market value, Facebook would rank behind Amazon and Cisco, each worth over $100 billion, but ahead of Hewlett-Packard ($48 billion) and struggling Yahoo! ($19 billion). 

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