ITS GLOBAL user base is climbing inexorably towards 1 billion and next week, when it floats as a public company, Facebook is expected to be valued at a staggering $US95 billion. But to the company you are worth as little as $4.54 a year.

That’s the amount of money Facebook is likely to earn in advertising revenue this year from each of its 11 million Australian users, despite the fact that Australians spend more time on the social networking site than anywhere else.

It is marginally more than the global average but less than half the amount of dollars that each American and Canadian generates for the company.

Yet analysts expect an increase in advertising after Facebook goes public next week, as the pressure mounts from shareholders to lift the average revenue per user to higher levels.

Advertisers typically use Facebook as a cheap means of getting to lots of people with simple ads that appear on the right hand side of a person’s page.

John Miskelly, a director of the media buying agency MediaCom, said more and varied types of ads might appear, including handing over the entire home page to a single advertiser for the day, an increase in banner ads and more advertising messages appearing in a user’s news feed, a space usually dedicated for personal posts.

He also raises the prospect that Facebook may open up the reams of data that it compiles on users to allow big spending advertisers to access it directly to serve tailored advertising to users.

At the moment advertisers do not have direct access to the data but rather they give Facebook a wish list of who they want to target, based on basic information such as age, gender and interests, and then Facebook places the ads on their behalf.

Facebook aggregates users into ”types” based on the information they hand over but mining that information more deeply would give advertisers more and deeper knowledge about people they want to target with ads.

”Getting hold of that kind of data would be a marketer’s dream. It’s a goldmine. It would really improve the targeting with their other online advertising as they would be reaching the right people with their messages,” Mr Miskelly said.

The editor of Social Media News, David Cowling, expects mobile phone users will see more ads appear on their handset screen, an area the company has yet to exploit but has flagged as an area of growth.

Mr Cowling puts the lower ad revenue per user in Australia down to the fact that to date few small businesses are using Facebook for advertising.

He said Facebook’s founder, Mark Zuckerburg, who will remain a large shareholder, would resist commercialising the site too much. ”He is always focused on new products and making the site better. Generating new revenues has never really been his goal. Whether that remains the case after the IPO [float] remains to be seen.”

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EDUARDO SAVERIN, the billionaire co-founder of Facebook, renounced his US citizenship on the verge of a sharemarket float that values the social network at nearly $US96 billion.

Facebook plans to raise as much as $11.8 billion through the float, the biggest in history for an internet company.

Mr Saverin’s relinquishing of US citizenship could reduce his tax bill. His stake in Facebook is about 4 per cent, according to the website whoownsfacebook.com. After the float, that would be worth about $US3.8 billion.

Mr Saverin joins a growing number of people giving up US citizenship before a possible increase in tax rates for top earners. The Brazilian-born resident of Singapore helped Mark Zuckerberg start Facebook in a Harvard dormitory.

”Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” his spokesman, Tom Goodman, said.

The 2010 movie The Social Network portrayed him as a scorned friend who provided the company’s early financing and then was squeezed out. He sued Mr Zuckerberg and settled for an undisclosed amount.

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Posting your views on Facebook and other social media sites delivers a powerful pleasure reward to the brain similar to the pleasure from food and sex, a Harvard study concludes.

The study led by two neuroscientists and published this week concluded that “self disclosure” produces a response in the region of the brain associated with dopamine, a chemical associated with pleasure or the anticipation of a reward.

The researchers said most people devote 30 to 40 percent of their speech to “informing others of their own subjective experiences” but that on social media, this is closer to 80 per cent.

They conclude “that humans so willingly self-disclose because doing so represents an event with intrinsic value, in the same way as with primary rewards such as food and sex.”

Although Facebook was not specifically cited in the study, it focused on the brain response of people’s “opportunities to communicate their thoughts and feelings to others.”

“To the extent that humans are motivated to propagate the products of their minds, opportunities to disclose one’s thoughts should be experienced as a powerful form of subjective reward,” wrote Diana Tamir and Jason Mitchell of Harvard’s Social Cognitive and Affective Neuroscience Lab.

The research, published in the May 7 edition of the Proceedings of the National Academy of Sciences, said the study support the notion that humans, like some other primates, will give up some rewards because of a powerful brain response.

The study gave people a small cash reward for answering certain factual questions about things they observe, and a lower reward for offering their own views about a subject. But in many cases, the participants chose a smaller reward if they could talk about themselves.

“Just as monkeys are willing to forgo juice rewards to view dominant groupmates and college students are willing to give up money to view attractive members of the opposite sex, our participants were willing to forgo money to think and talk about themselves,” the researchers wrote.

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The principles of openness and universal access that underpinned the creation of the internet three decades ago are under greater threat than ever, according to Google co-founder Sergey Brin.

In an interview with the Guardian, Brin warned that there were “very powerful forces that have lined up against the open internet on all sides and around the world. I am more worried than I have been in the past . . . it’s scary.”

He said the threat to the freedom of the internet came from a combination of governments increasingly trying to control access and communication by their citizens, the entertainment industry attempting to crack down on piracy, and the rise of “restrictive” so-called walled gardens such as Facebook and Apple, which tightly controlled what software could be released on their platforms.

The 38-year-old billionaire, whose family fled anti-semitism in the Soviet Union, was widely regarded as having been the driving force behind Google’s partial pullout from China in 2010 over concerns about censorship and cyber-attacks.

He said five years ago he did not believe China or any country could effectively restrict the internet for long but he had been proven wrong: “I thought there was no way to put the genie back in the bottle, but now it seems in certain areas the genie has been put back in the bottle.”

Although he said he was most concerned by the efforts of countries such as China, Saudi Arabia and Iran to censor and restrict use of the internet, he also warned that the rise of Facebook and Apple, which have their own proprietary platforms and control access to their users, risked stifling innovation and Balkanising the web.

“There’s a lot to be lost,” he said. “For example all the information in apps – that data is not crawlable by web crawlers. You can’t search it.”

Brin’s criticism of Facebook is likely to be seen as controversial with the social network approaching an estimated $US100 billion flotation. Google’s upstart rival has seen explosive growth, with more than 800 million members worldwide and one in two of all Americans with computer access signed up.

Brin said he and co-founder Larry Page would not have been able to create Google if the internet was dominated by Facebook. “You have to play by their rules, which are really restrictive. The kind of environment that we developed Google in, the reason that we were able to develop a search engine, is the web was so open. Once you get too many rules that will stifle innovation.”

He also criticised Facebook for not making it easy for users to switch their data to other services. “Facebook has been sucking down Gmail contacts for many years.”

Brin’s comments come amidst an intensifying battle for control of the internet that is being played out across the globe between governments, companies, military strategists, activists and hackers.

From Hollywood’s attempts to pass legislation allowing pirate websites to be shut down, to the British government’s plans to monitor social media and web use, the ethos of openness championed by the pioneers of the internet and world wide web is being challenged on a number of fronts.

In China, which now has more internet users than any country in the world, the government recently introduced new “real identity” rules in a bid to tame the country’s boisterous micro-blogging scene. In Russia there are powerful calls to rein in a blogosphere that was blamed for fomenting a wave of anti-Putin protests. It has been reported that Iran is planning to introduce a sealed “national internet” from this summer.

Ricken Patel, co-founder of Avaaz, the 14 million-strong online activist network which has been providing communication equipment and training to Syrian activists, echoed Brin’s warning: “We’ve seen a massive attack on the freedom of the web. Governments are realising the power of this medium to organise people and they are trying to clamp down across the world, not just in places like China and North Korea; we’re seeing bills in the United States, in Italy, all across the world.”

The outspoken Chinese artist and activist Ai Weiwei says the Chinese government’s attempts to control the internet will ultimately be doomed to failure. “In the long run they must understand it’s not possible for them to control the internet unless they shut it off – and they can’t live with the consequences of that.”

Brin said he was not surprised by the effectiveness with which China had so far managed to create a technological barrier against the outside world. “I’m more surprised by the acceptance . . . I had imagined people would be more rebellious.”

Amid mounting concern over the militarisation of the internet and claims (denied by Beijing) that China has mounted numerous cyber-attacks on US military and corporate targets, he said it would be hugely difficult for any government to defend its online “territory”.

“If you compare the internet to the physical world, there really aren’t any walls between countries. If Canada wanted to send tanks into the US there is nothing stopping them and it’s the same on the internet: it’s hopeless to try to control the internet.”

He reserved his harshest words for the entertainment industry, which he said was “shooting itself in the foot, or maybe worse than in the foot” by lobbying for legislation to block sites offering pirate material.

He said the SOPA and PIPA bills championed by Hollywood and the music industry would have led to the US using the same technology and approach it criticised China and Iran for using. The entertainment industry failed to appreciate that people would continue to download pirated content as long as it was easier to acquire and use than legitimately obtained material, he said.

“I haven’t tried it for many years but when you go on a pirate website, you choose what you like, it downloads to the device of your choice and it will just work – and then when you have to jump through all these hoops [to buy legitimate content], the walls created are disincentives for people to buy.”

Brin acknowleged that some people were anxious about the amount of their data that was now in the reach of US authorities because it sits on Google’s servers. He said the company was periodically forced to hand over data and sometimes prevented by legal restrictions from even notifying users that it had done so.

He said: “We push back a lot; we are able to turn down a lot of these requests. We do everything possible to protect the data. If we could wave a magic wand and not be subject to US law, that would be great. If we could be in some magical jurisdiction that everyone in the world trusted, that would be great . . . We’re doing it as well as can be done.”

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App Instagram success team

California has been famous since the gold rush for creating fortunes overnight. The Golden State was a dream factory for get-rich-quick schemes from pioneers with pickaxes to beautiful people aiming to be Hollywood stars.

But only in Silicon Valley can a couple of 20-somethings turn 551 days, or 78 weeks, of work into a $US1 billion fortune.

Kevin Systrom, 28, joined the long line of technocrats turned plutocrats on Monday in the US when he sold Instagram, a profitless photo-sharing app that’s less than two years old, for $US1 billion.

He sold it to that other wunderkind, Mark Zuckerberg, 27, the Facebook founder whose social network is now worth an estimated $US100 billion.

Systrom, a former Google employee, is understood to own about 40 per cent of Instagram, which is now worth $US400 million.

His co-founder Mike Krieger, 25, is believed to have about 10 per cent, worth $US100 million. The rest will be shared with investors and the company’s other employees – all 11 of them.

Even by Silicon Valley standards, it’s a remarkable haul for a company that has been around for less than two years.

If Facebook had been paying Instagram from the start it would work out that Instagram was making roughly $US1.8 million a day from the social networking giant, or $US12.7 million a week.

Instagram was not the first, or the only, mobile app offering people a way to share their photos on Twitter, Facebook or Flickr. Nor was its use of filters to add visual effects to those shots a new idea. But what made it stand out was its success.

Last week Instagram raised $US50 million from venture capital firms, valuing Systrom and Krieger’s baby at $US500 million. Zuckerberg had reportedly already approached Systrom and asked to buy the firm but, after the funding, he came back with an offer that could not be refused: double the price.

Instagram might not make a cent but it is the hottest mobile app in the world and Facebook is preparing for the biggest IPO in tech history.

To date people have questioned Facebook’s mobile strategy. Zuckerberg started his social network in the days when PCs and browsers ruled the internet. Even 20-somethings can look a bit dated in these fast moving days. And $US1 billion is a small price to pay for new school cool, if you are worth $US100 billion.

Systrom, a Stanford University graduate like so many Silicon Valley multimillionaires, grew up in Boston but was an early witness to the dotcom boom. His mother, Diane Systrom, worked at Monster.com during the first internet era and is now an executive at Zipcar, the online car rental business.

The history of the billion-dollar deal goes back to his university days where he was studying for an engineering degree. Systrom, a big photography fan, started looking at ways to share photos online. His interest subsided as he looked for a job, ending up at Google, where he spent two years in product and corporate development.

Systrom’s next job was at Nextstop, a trip-recommendation site that Facebook bought for a rather measly $US2.5 million.

Systrom then started Burbn, named after his favourite liquor, a company that focused on the super-hot area of mobile but whose basket of services seemed to lack any clear identity. It had photos but also check-in capabilities, such as Foursquare, and other apps.

Along came Krieger, another Stanford graduate, and the two started talking about narrowing their focus.

On the Q&A site Quora, Systrom explained the genesis of Instagram: “We decided that if we were going to build a company, we wanted to focus on being really good at one thing.

“We saw mobile photos as an awesome opportunity to try out some new ideas. We spent one week prototyping a version that focused solely on photos. It was pretty awful. So we went back to … Burbn. We actually got an entire version of Burbn done as an iPhone app, but it felt cluttered, and overrun with features.

“It was really difficult to decide to start from scratch, but we went out on a limb, and basically cut everything in the Burbn app except for its photo, comment, and like capabilities. What remained was Instagram. (We renamed because we felt it better captured what you were doing – an instant telegram of sorts. It also sounded camera-y.)”

The rest is Silicon Valley history. Launched in October 2010, Instagram was an instant hit. More than 30 million people have downloaded the app now. When the firm launched an Android version this month, it attracted 1 million downloads in 12 hours. People love sharing their photos online and making them look like their dad took them in 1980 with a camera he borrowed from his dad.

And the app they want to do it with is Instagram.

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Christine Martinez spent the past week frolicking on the Caribbean island of St Barts after becoming a star by sharing her sense of style at Pinterest.com.

Pinterest has become the web’s hottest young website, particularly among women, by giving people virtual bulletin boards that they decorate with pictures showcasing interests in anything from food to sports, fashion or travel.

“Gawd I love Pinterest,” fashion blogger Martinez said in a Twitter message fired off between flights on Friday as she made her way back to her home in the Californian city of Oakland

Nearly a million people have signed up to follow Martinez at Pinterest where people “pin” pictures they have taken or, in most cases, plucked from elsewhere on the internet.

“I have a penchant for pretty,” Martinez said in her Pinterest profile, which had a picture of her with her cherished dog ‘Miles.’

As of Saturday, she had 43 Pinterest boards with more than 5700 images reflecting her taste in jewellery, swimsuits, and more.

Pinterest is such an influential fashion venue that chic beachwear label Calypso St Barts took her to the French island territory for a week to “live pin” the label’s swimsuit photo shoot.

“Pinterest is the latest procrastination tool of the masses,” Avery Spofford of fashion website shefinds.com wrote in an online post citing Martinez’s adventure as evidence of Pinterest’s clout.

“Mostly, people just like to look at photos of puppies and cake and interior design,” Spofford continued. “Us, too!”

Pinterest was launched in early 2010 and has been growing at a dizzying rate in the past six months despite being invitation-only. The website reportedly has more than 13 million users.

Pinterest is driving more online traffic to retail websites than social networks LinkedIn, YouTube and Google+ combined, according to a January report from Shareaholic.

The first investor to back in the venture, Brian Cohen, is delighted with its results so far.

“Pinterest’s traffic charts aren’t hockey sticks – they’re rocket ships,” internet tracker RJ Metrics said in an analysis released last month.

“Pinterest is the hottest young site on the internet.”

Brands are leaping onto Pinterest, setting up pages to appeal to prime shopping demographics or forming collaborations such as the one between Martinez’s MilestoStyle.com blog and Calypso.

“The amount of free advertising a brand gets on Pinterest is ridiculous,” blogger Kerry Sauriol wrote at WomenInBizNetwork.com.

“Without even having their own Pinterest boards, clothing companies, furniture designers, tech companies, and on and on have their products pinned and adored,” she continued.

“Think of the marketing power of a brand that does have a board.”

Other websites have begun adding “pin it” buttons inviting visitors to decorate Pinterest pages with images using a single click, according to co-founder Ben Silbermann.

“The last few months have been a whirlwind here at Pinterest,” Silbermann said in a recent blog post. “It’s humbling, and exciting.”

The small Pinterest team works in box of an office in single-story building in downtown Palo Alto in Silicon Valley.

About a dozen engineers were working at rows of desks in an undecorated room when an AFP correspondent visited.

Pinterest said it was too swamped with attention from users and media for interviews.

Rampant pinning of images snagged from the internet has raised concerns about copyright violations at Pinterest.

The website follows procedures set out in US copyright law and has a form at the site for reporting violations, Silbermann explained. Each “pin” has a flag icon for marking pirated content.

“We care about respecting the rights of copyright holders,” Silbermann said.

“Copyright is a complicated and nuanced issue and we have knowledgeable people who are providing lots of guidance.”

Pinterest fans include Dave Morin, a longtime member of the Facebook team who left the leading social network to start Path.

Morin sees Pinterest as part of a trend for people in “the world’s biggest club” Facebook to form sub-groups based on interests or close relationships.

“Now that the world understands how to be social through the internet people want unique experiences in different contexts,” Morin said, noting that Path lets people intimately share with family and close friends.

“Pinterest has a space where you can talk about your deep interests,” he continued. “In my case, deep interests in ski gear or photography gear.”

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I have been wondering about why Whites are racists, and no other race is……

Michael Richards makes his point…and whether we like it or not, he is telling the truth.
Michael Richards better known as Kramer from TVs Seinfeld does make a good point.
This was his defence speech in court after making racial comments in his comedy act.
He makes some very interesting points…
Someone finally said it.  How many are actually paying attention to this?
There are African Americans, Mexican Americans, Asian Americans, Arab Americans, etc.
And then there are just Americans.. You pass………More

Sourced & published by Henry Sapiecha

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Last April, Gamestop opened a store on Facebook to generate sales among the 3.5 million-plus customers who’d declared themselves “fans” of the video game retailer. Six months later, the store was quietly shuttered.

Gamestop has company. Over the past year, Gap, JC Penney and Nordstrom have all opened and closed storefronts on Facebook’s social networking site.

Facebook, which this month filed for an initial public offering, has sought to be a top shopping destination for its 845 million members. The stores’ quick failure shows that the California-based social network doesn’t drive commerce and casts doubt on its value for retailers, said Sucharita Mulpuru, an analyst at Forrester Research in Cambridge, Massachusetts.

Closed: Gamestop no longer sells directly on Facebook.

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop,” Mulpuru said in a telephone interview. “But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

A year ago, investors hailed so-called F-commerce as the next big thing, speculating that the company had potential to threaten Amazon.com and PayPal. Facebook is the most-visited website in the world. Some people thought that persuading visitors to shop would be easy, Mulpuru said.

David Fisch, Facebook’s director of business development, said in June that the site would make shopping online, previously a solitary experience, more social.

Hanging out

“This is where people are hanging out,” Fisch said at the Internet Retailer Conference & Exhibition in San Diego.

Facebook planned to profit from retailers buying ads to drive traffic to their on-site stores. Business consultant Booz & Co. predicted in January 2011 that physical goods sold through social commerce would balloon to $US30 billion from $US5 billion by 2015, with Facebook contributing a majority of sales.

Even as some businesses shut storefronts, many companies continue to devote advertising dollars to the social network. Facebook’s sales surged 55 per cent to $US1.13 billion in the fourth quarter. The company aims to use e-commerce more as a way of getting users to stay longer than as a way to boost revenue, said Krista Garcia, an analyst at EMarketer in New York.

Chris Kraeuter, a Facebook spokesman, declined to comment.

Customers had no incentive to shop at Gamestop’s Facebook store rather than the company’s regular website because purchasing online is already convenient, said Ashley Sheetz, who is the Grapevine, Texas-based company’s vice president of marketing and strategy.

Shut quickly

“We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly,” Sheetz said in a telephone interview. “For us, it’s been a way we communicate with customers on deals, not a place to sell.”

Gap, which has 5.6 million Facebook fans from its namesake, Banana Republic and Old Navy pages, opened and discontinued a storefront last year, said Liz Nunan, a company spokeswoman. The San Francisco-based company also discovered customers preferred shopping on its own sites, she said.

“We will continue to evaluate if this is something we want to bring back in the future,” Nunan said in an emailed statement.

Nordstrom tested ways to make shopping “seamless through Facebook” and decided on a broader social media focus, Colin Johnson, a spokesman, said.

JC Penney featured assortments in a Facebook “shop” tab beginning in 2010, and took it down in December 2011, Kate Coultas, a spokeswoman said in an emailed statement.

Other advertisers, such as Procter & Gamble, have kept their F-stores running, including Olay, Tide and Cover Girl.

An Australian online business, however, had a re-think about selling its goods through a Facebook store, after considering the costs.

Eugene Tan, director of Aquabumps, a business selling daily photographs of Bondi and other beaches, has a meaningful fan page on Facebook but declined the offer to create a new e-commerce engine or merge his current one on the social network.

“I had a look at some of the guys providing the service to create a shop and I thought (the site) was slow. A lot of apps that run on Facebook are slow. And I can’t control it. I’d rather people come to me (from Facebook).”

Tan said he also didn’t like to put a “hard sell” on his Facebook page. “We’re very subtle on the sell. My buyers would switch off.”

Tan stores about 1000 images on his site and offers 12 permutations in framing and sizing options.

“It’d be very difficult to have two stores, and expensive too. They (third party) wanted a monthly fee and a percentage of sales. With my own site I can control the costs – I paid a one-off fee to create it and pay the credit card transaction fees; that’s nothing,” Tan said.

Cracks in model

Wade Gerten, chief executive officer of social media developer 8thBridge, previously known as Alvenda, opened a Facebook store for the florist 1-800-FLOWERS. Minneapolis-based Gerten went on to develop commerce strategies for Delta Air Lines, Diane Von Furstenberg Studio and denim-maker Seven for all Mankind.

Cracks in the model showed quickly, Gerten said in a telephone interview. Clients “have taken a different approach,” shutting stores or scaling back their offerings.

“It was basically just another place to shop for all the stuff already available on the retailer websites,” Gerten said. “I give so-called F-commerce an ‘F’.”

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A security flaw in web-connected home security cameras made by Trendnet, which distributes in Australia, is allowing internet users to spy on the private video feeds of thousands.

Trendnet, a US company, issued an update to fix the flaw on February 6 but it requires owners of the cameras to take action, which has led to some speculating that many will not install the fix unless they are made aware of the flaws.

That speculation may well turn out to be true as links to thousands of live video feeds that are claimed to remain vulnerable have been posted on internet message boards such as 4chan and Reddit in recent weeks.

The security hole, which was revealed nearly a month ago by a blog called Console Cowboys, allows for real-time online access to the cameras without the need for a password.

Director of Trendnet’s Australian agent, BAX IT services’ Matthew Mann, said he had sold 53 affected cameras to 13 customers and that he found out about the security flaw yesterday. He was contacting customers today to get them to install the fix.

“They will have to do a firmware update which is very minimal,” he said. Another 70 cameras in stock remained affected by the flaw but would have a fix installed by technicians before they were sold.

He said there could potentially be more cameras in Australia that were vulnerable which people had purchased overseas using sites like eBay but said he was the only Australian agent for Trendnet and that their web-connected cameras hadn’t been a focus for his company.

What internet users claim they saw

One Reddit user, “Gl0we”, claimed many owners of the affected cameras were using them in private spaces, including in living rooms and bedrooms. The user added that some were using them as baby monitors and that “a lot of work places” appeared to be using them too. ”Some look like they might be spying on employees even,” they claimed. “It’s not even funny.”

Tech blog The Verge claimed nudity was viewed, saying a woman taking off her pyjamas in her bedroom and a young mother standing next to a baby crib at night were seen by accessing the vulnerable cameras.

Trendnet addressed the problem in a statement.

“Trendnet has recently gained awareness of an IP camera vulnerability common to many Trendnet SecurView cameras,” the Torrance, California-based firm said.

“It is Trendnet’s understanding that video from select Trendnet IP cameras may be accessed online in real time,” Trendnet said.

“Upon awareness of the issue, Trendnet initiated immediate actions to correct and publish updated firmware which resolves the vulnerability,” it said.

In the statement, Trendnet listed 22 camera models sold since April 2010 which may have the vulnerability and provided a link to a site where camera owners can download a firmware fix.

“Trendnet is aware that this IP Camera security threat may affect your confidence in Trendnet solutions,” the company said. “Trendnet extends its deepest apologies to consumers which may be impacted by this issue.”

Australian security analyst at IBRS, James Turner, said that the camera vulnerability highlighted the fact that when you plugged any device into the internet, other people could find it. ”Australians should be thinking about this issue very carefully as we look forward to all of the capabilities that the [national broadband network] is promising,” he said.

As broadband became more capable and ubiquitous, he said people would “inevitably increase their use of internet-intensive applications and services, such as video conferencing.”

The resulting plethora of devices, which will be left plugged in and turned on, many with webcams and microphones, would be “an appealing target to opportunistic hackers”, he said

Sourced & published by Henry Sapiecha

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