Facebook Threatened with Legal Action Over Patents

It seems like there has been a lot of hostility between major companies making technology news recently. The saga continues with Yahoo now threatening to take legal action against Facebook, due to what Yahoo is claiming are patent infringements.

The New York Times reported, “Yahoo is seeking to force Facebook into licensing 10 to 20 patents over technologies that include advertising, the personalization of Web sites, social networking and messaging.” It cited anonymous sources.

According to sources, representatives from Facebook and Yahoo met on Monday, February 27 to discuss the matter.

"Yahoo has a responsibility to its shareholders, employees, and other stakeholders to protect its intellectual property," said a Yahoo rep. "We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights."

Barry Schnitt, a spokesman for Facebook, said in a statement, “Yahoo contacted us the same time they called The New York Times and so we haven’t had the opportunity to fully evaluate their claims.”

It seems like Yahoo is ready to get down to business. It will be interesting to see how all of it plays out.

Sources: PCMag - Yahoo Threatens Facebook With Legal Action Over Patents and New York Times - Yahoo Warns Facebook of a Potential Patent Fight

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Facebook Gaming is on the Decline

According to a report that was released by the IHS on Friday, February 24, it seems as though Facebook users' interest in social gaming is on the decline.

The IHS reported that compared to a year ago, the number of people that play games on Facebook has dropped. At the end of 2010, 50 percent of Facebook’s monthly active users (MAUs) were playing games via the social networking site; however, at the end of 2011, only 25 percent of Facebook’s MAUs were still playing games. Although Facebook’s total user numbers are going up, the gaming numbers seem as though they are going to continue to go down.

However, Facebook is not the only site that is seeing a decline in gamers. The IHS reported that Zynga’s MAUs have dropped from 266 million in the third quarter of 2011 to 225 million in the fourth quarter. The IHS is claiming that the drop in gaming numbers is not necessarily due to an overall decline but instead to “maturation.”

"Facebook rocketed to prominence as a gaming platform in 2009 and 2010," said Steve Bailey, the IHS senior analyst for games. "However, with equal speed, the market then settled into a state of maturity in 2011, with conditions becoming markedly more challenging for game operators. While Facebook remains a worthwhile opportunity for companies able to meet these challenges, the tone of the market in 2012 will be somewhat muted compared to the optimistic outlook of the past few years."

"Facebook needs to implement changes to provide enhancements for its entire user base," Bailey continued. "Even if the company has to inhibit its role as a game platform, the ultimate priority is obvious. This already happened in early 2010, when viral channels for user acquisition were dampened in order to silence the flood of near-spam that game apps were broadcasting into user activity streams."

I think that Bailey is right. Facebook shouldn’t be worried that users are no longer using Facebook for gaming, instead it should be working on things that will cater to all users' needs and make Facebook an even more enjoyable experience, which is what I think they have been doing recently. Good job, Facebook!

Sources: Facebook Developers Blog - Growing Mobile Apps and Games with Facebook Platform and PCMag - Analyst: Users Turning Away From Facebook Games

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Romney Expected to Win Big on Super Tuesday According to Social Media

Media tracking company SocialMatica has predicted that Mitt Romney will regain his front-runner status in the GOP presidential race after he successfully wins Super Tuesday. If you don't know, Super Tuesday is the Tuesday in February or March when the greatest number of states holds primary elections.

SocialMatica's analytic dashboards show that Romney will win seven of the ten Super Tuesday states, including Alaska, Massachusetts, Oklahoma, Vermont, Tennessee, Virginia and Ohio, which happens to be a big swing state. Opposing Romney, Newt Gingrich is expected to win Georgia (his home state) with Ron Paul winning his very first contests in North Dakota and Idaho. SocialMatica also noted that Rick Santorum isn't expected to win any states.

According to CEO of SocialMatica Gary Hermansen, "What surprised me is that traditional media is focusing on Rick Santorum, but he ranks no higher than third in our social analytic measurement."

The data compiled by SocialMatica also revealed how candidates will perform on Super Tuesday as well as what issues are most important to voters in each of the Super Tuesday states. This data was collected from social media sites like Facebook, Twitter, blogs, online forums and LinkedIn. The data discovered that in Alaska, the Tea Party, church, environment and economy are important topics to consider in the state's primary contest. Georgia, on the other hand, focuses on education, budget and military issues.

These numbers will be updated daily until Super Tuesday arrives to reflect the most current statistics. According to Hermansen, "This is a living analysis. I think people utilize social media as their real time interactive conversation now instead of just depending on what they read or what is fed to them."

Source: Chicago Tribune - Social Media Analysis Predicts Big Romney Win on Super Tuesday

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Facebook Privacy Concerns Remain Despite Changes

According to users, most social networking sites these days don't do enough to protect the privacy and security of their users. A recent survey has shown that both privacy and security concerns are still persistent for many users on Facebook, despite the social networking site's recent attempt to address such concerns.

With regard to all the concerns users have, security and privacy are still the top two according to research from the Social Media Habits and Privacy Concerns Survey administered by uSamp. uSamp surveyed almost 600 men and women from across the country about their active social media accounts and the types of information they put on them.

Social media is dominated by Facebook with 80% of all those surveyed logging into the site regularly. The second highest was YouTube with 46%, followed by Twitter at 33% and, surprisingly, MySpace with 32%. The main thing this survey found was that even though 65% of the survey takers said they were pretty comfortable with their privacy protections, they were still concerned about privacy risks.

28% of the survey takers showed some level of discomfort about the privacy protections offered by their social media site of choice. What's more is that of all the people who stay away from these sites, a staggering 73% say they stay away due to privacy concerns. In addition to that, the survey found that social media users are aware that they need to express caution about what they reveal. However, they also believe that companies aren't doing enough to protect their privacy either.

Nearly 85% of those surveyed stated that users should be primarily responsible for their own privacy, though at the same time 75% agreed that the sites themselves should also assume responsibility for the protection of their users' privacy. According to uSamp Vice President Lisa Wilding-Brown, "User privacy is an enormously dynamic area, and even as site operators attempt to address the issue, consumer perceptions are slow to change."

Source: Information Week - Social Media Survey: Privacy, Security Concerns Persist

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Facebook Talks About Its Major Competition

On Wednesday, February 1 Facebook filed its $5 billion IPO and listed its top competitors including Google, Microsoft and Twitter.

According to Facebook, the company is also competing for advertising dollars and dealing with the rise of smaller social network sites.

"We face significant competition in almost every aspect of our business from companies such as Google, Microsoft, and Twitter, which offer a variety of Internet products, services, content, and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features," said Facebook on Wednesday when filing with the SEC.

Facebook went on to admit that it definitely has its eye on Google’s Google+ network. "We compete broadly with Google's social networking offerings, including Google+, which it has integrated with certain... products, including search and Android," Facebook said.

Right now Google+ only has 90 million users, while Facebook has 845 million users; however, now that Google is requiring users who sign up for any kind of Google account to also create a Google+ account, the Google+ numbers will most likely spike quite a bit.

Facebook said that some of its rivals "have significantly greater resources and better competitive positions in certain markets than we do." Google could definitely fall into this category.

"Certain competitors, including Google, could use strong or dominant positions in one or more markets to gain competitive advantage against us in areas where we operate including: by integrating competing social networking platforms or features into products they control such as search engines, web browsers, or mobile device operating systems; by making acquisitions; or by making access to Facebook more difficult," Facebook said. "As a result, our competitors may acquire and engage users at the expense of the growth or engagement of our user base, which may negatively affect our business and financial results."

Facebook is also on the lookout for smaller social networks that could pose potential threats. Some of the networks that Facebook is watching out for include Korea’s Cyworld, Japan’s Mixi, Brazil and India’s Google-owned Orkut and Russia’s vKontakte. "As other companies introduce new products and services, we may become subject to additional competition," the company said.

So far Facebook has not really detailed the competitive pressure that it feels from companies like Twitter and Microsoft; however, they have said, "We…face competition from traditional and online media businesses for a share of advertisers' budgets and in the development of the tools and systems for managing and optimizing advertising campaigns."

Source: PCMag - Facebook Names Google, Twitter, Microsoft as Major Rivals

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Facebook Filing for IPO

According to Forrester Marketing Analyst Nate Elliot, “Media reports suggest that Facebook will file for an IPO this week that could value the company at $100 billion — and leave the company sitting on $10 billion in cash.” Now what will Facebook do with all that money, you may ask? Well, Elliot said on Tuesday, January 31, that with this money Facebook would have the ability to revamp revenue streams in an attempt to capture “global domination.”

"The fact is this new-found wealth could not only allow Facebook to solve its biggest business challenges, it could also help Facebook finally achieve its longstanding goal to change how marketing works," Elliott wrote in his blog post.

Elliot continues stating that Facebook makes “almost all” of its revenues from advertisements. However, he also said that the social network "harbors a dirty little secret: Marketing on Facebook doesn't work very well." According to research conducted by Australia’s Ehrenberg-Bass, only about 1 percent of Facebook users that are “liking” certain brands on Facebook are actually engaging with the company.

“Facebook can – and must – do much more to turn the data it has on users into effective ad targeting,” wrote Elliot. “(Buying a demand-side platform would be a good start.) And it must build or buy much better tools for building, managing and measuring branded pages.”

He went on to say that Facebook must "swing for the fences – and data is the key. Two years from now, Facebook should be competing with Google to see who can best use your own data to help marketers target ads to you, no matter where those ads appear."

Facebook has faced some major scrutiny concerning the use of user data to provide targeted ads. Back in November the FCC decided that Facebook had "deceived customers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public."

Elliot made sure to mention this issue in his blog post. "One external threat it can't outrun, though, is the government," he wrote. However, with extra money Facebook will be able to defend itself better. "One of the first things Google did after its IPO was to hire an army of lobbyists, and I expect Facebook to follow suit — especially if it follows the advice above and looks for creative and expansive new ways to use its data," Elliott said.

"Expect lots of blue business cards floating around Brussels and Washington by the end of 2012. After all, $10 billion buys a lot of influence," he said.

Elliot went on to discuss the success of Facebook across the globe. In Brazil Facebook has just recently become the largest social network in the country. Elliot believes that Facebook needs to focus on progress like this as it plans for the future.

"In the global markets where users are most enthusiastic in their use of social media — including Asia and many large emerging markets — Facebook isn't doing as well," Elliott said. "It's behind in Russia, Japan, and Korea, and it's not even playing in China."

Back in November, when appearing on Charlie Rose, Mark Zuckerberg was asked about the expansion of Facebook into China. He said that, at the moment, he would much rather focus on "places in the world where we can connect people more simply." He continued saying that "if you do the things that are easier first, then you can actually make a lot of progress." Therefore, China is "not the top thing we're thinking about right now."

Sources: Forrester - How Facebook’s IPO Could Transform Marketing and PCMag - What Will Facebook Do With $10 Billion?

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