Anthony De Rosa

Facebook is launching a stand-alone photo sharing mobile application. This comes weeks after the social network bought Instagram for a billion dollars.

Someone please explain to me why this makes sense.

Here’s why I ask. Instagram, after its 2010 launch, quickly became the most popular photo sharing application on mobile devices. After the acquisition, many users feared that Facebook would ruin the Instagram app. Until now, Facebook has left the product alone. That was a wise move.

And now comes along this new mobile app, called “Facebook Camera.” In almost all aspects, it’s an inferior product to Instagram. The interface is clumsy; the filters are not as good; the product feels like something someone developed long before Instagram and was crushed out of existence.

Facebook should leave Instagram alone, but allow existing Facebook users to log into Instagram using their Facebook login. Some folks make the argument that Instagram users don’t want Facebook users on the Instagram network. I think that this is anti-social. Remember this: Instagram never wanted to be the cool indie band you liked before they became popular. They always wanted — and still want — to be as big as, or bigger, than Facebook. To appease these people, perhaps you decide to use Instagram in a “Path”-like experience, where you allow only people you want to view your photos by making your profile “invite-only.” This is already available on Instagram so I don’t so what the issue is. Path is a competing photo-sharing app that is banking on people only wanting to photo share with small groups and not the general public.

Facebook had easier options that it could have considered beside launching its own mobile app. Yet it pursued that path. Producing an inferior product must have cost money and certainly must have taken time to develop. Even if the app were developed before Facebook bought Instagram, it would have been less damaging for Facebook to pretend that it had never existed than to confuse the marketplace by introducing two competing products from the same company.

What were they thinking?

Facebook unveiled a number of new opportunities for advertising on their social network today, the biggest being the ability to post ads to mobile devices, which they had not yet been offering.

Facebook calls the new ad opportunities “Premium for Facebook” and it opens up the following placements:

• Larger ads on the side of the Facebook home page that users see when they first log in
• Ads that run inside the Facebook Newsfeed
• Ads on mobile devices
• Ads that appear when a user logs out of Facebook
• The ability to run video ads on all these placements

We were not aware of just how many folks were using Facebook on mobile until they filed for their IPO. According to the filing, there were 425 million monthly active users of Facebook’s mobile products in December 2011. This gives advertisers another opportunity to get their products in front of Facebook users. Mobile is growing at an incredible pace. eMarketer estimates Facebook’s ad rev will pass $5 billion this year, accounting for 6.5% of all online ad spending. That doesn’t even factor in the new ad opportunities they’ve unveiled today.

Here’s more on the way Facebook makes money from Reuters TV: Tech Tonic

Can Facebook live up to the hype? I uncover three problems standing in the way of Facebook’s future growth.

Sam Hamadeh of PrivCo talks with me about the potential pitfalls in Facebook’s S-1 filing yesterday and why he’s bearish on Facebook’s IPO. Watch and find out why you might want to hold back some irrational exuberance when FB shares debut.

Reddit users have taken it upon themselves to draft legislation in place of SOPA and PIPA, unsatisfied with Washington politicians, who seem to have shown a willful ignorance of how the Internet actually works. Using a Google Doc open for anyone to help write and edit, they’ve come up with a draft version of “The Freedom of Internet Act”

The act addresses some basic tenets they’ve set forth. Note that these proclamations are subject to change as this is a living document and only reflect the content at the time of this publication:

• Censorship – No government of any form presiding over any land, people, or assets in any form within the United States of America shall pass any law, nor ratify any treaty, which imposes or administers any kind of censorship on the Internet, except content found to be illegal content in accordance with this act.
• Culpability – Only the creator or uploader of data is responsible for whether that data is legal to upload, possess or make available to other users or information services.
• Restrictions on the Internet - No federal union or sovereign state may pass unilateral restrictions on the Internet.
• Content removal - Notice must be given to an administrator of the information system and to the uploader of the content within at least 30 days in advance of any deletion of data from any information system or service, or within 24 hours of the transfer of the data in question from publicly accessible storage to privately accessible storage.
• Judicial proceedings - Anyone undergoing judicial proceedings based on this document must be judged in the courts of the nation where the alleged offence was committed.
• Appropriate punishment - TBD
• Rights of the user – Addresses right to anonymity, privacy, use of proxies, encryption without fear of discrimination or suspicion.
• Liability and Settlement of Copyright Infringement Claim - All calculations related to this are to be carried out in a consumer, retail, individual level pricing upon which the production cost, marketing cost will not influence, capped at 200% of calculated damage.

The sub-Reddit page for FIA is located here, where it was created by a user named “RoyalwithCheese22”

The act aims to protect transformative works derived from copyrighted materials, such as mash-ups, memes and many other types of content shared on sites like Reddit, YouTube, Tumblr, Facebook and Twitter. It also seeks to try to address issues at an international level not just domestically in the United States.

1) If an individual resided in more than one country when committing violation(s) of this document, they shall be judged based on their physical location at the time of the offence.

2) The individual in question may demand extradition to their country of residence or citizenship, where they must then be tried for the listed offences. The court proceeding shall judge the crime as if the offence had been committed in his country of residence or citizenship during the event of the crime.

3) No person is to be extradited, deported or forced to leave, nor forcibly taken from a country for the need of legal proceedings. Any legal proceeding must be conducted in the country of which the crime was committed.

For more on the act and an interview with the original creator of the document, read this post by Dean Praetorious at the Huffington Post.

Here are some of the most interesting bits of information in Facebook’s IPO filing:

• Zynga accounted for approximately 12% of Facebook revenue
• Net income rose 65 percent to $1 billion in 2011, off revenue of $3.71 billion
• Sheryl Sandberg’s 2011 Facebook compensation: $30.9 million
• Facebook CFO David Ebersman’s 2011 total compensation was $18.65 million
• Advertising accounted for 85% of Facebook revenue in 2011
• Mark Zuckerberg’s compensation in 2011 was $1.49 million
• 845 million active users on Facebook
• Total capitalization as of Dec 31, 2011: $4,899 million
• Full time employees increased from 2,127 as of December 31, 2010 to 3,200 as of December 31, 2011
• Mark Zuckerberg holds stock with total voting power before IPO of 56.9%
• Facebook major ownership: Mark Zuckerberg : 28%, Accel (invested in 2005) :11.4% Co-founder Dustin Moskovitz 7.6% DST: 5.4% Peter Thiel: 2.5%
• Mark’s letter in the middle of the IPO filing
• Mark Zuckerberg’s annual salary will fall to one dollar starting 1/1/2013
• Facebook had 483 million daily active users on average in December 2011, an increase of 48% as compared to 327 million in December 2010
• 425 million monthly active users of Facebook’s mobile products in December 2011
• An average of 2.7 billion likes and comments per day were generated by users during the three months ending December 31, 2011
• Facebook cites Google+, Cyworld in Korea, Mixi in Japan, Orkut in Brazil and India, vKontakte in Russia as competitors
• Also cited by Facebook as competitors: Renren, Sina, and Tencent if they “are able to access the market in China in the future”

Peter Lauria points out that 85% of revenue dependent on advertising makes it more reliant than CBS, the most ad-dependent old-media firm.

Another interesting section addresses risks:

Any number of factors could potentially negatively affect user retention, growth, and engagement, including if:

• users increasingly engage with competing products;
• we fail to introduce new and improved products or if we introduce new products or services that are not favorably received;
• we are unable to successfully balance our efforts to provide a compelling user experience with the decisions we make with respect to the frequency, prominence, and size of ads and other commercial content that we display;
• we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance;
• there are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors;
• we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful, and relevant to them;
• there are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;
• technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience;
• we adopt policies or procedures related to areas such as sharing or user data that are perceived negatively by our users or the general public;
• we fail to provide adequate customer service to users, developers, or advertisers;
• we, our Platform developers, or other companies in our industry are the subject of adverse media reports or other negative publicity; or our current or future products, such as the Facebook Platform, reduce user activity on Facebook by making it easier for our users to interact and share on third-party websites.

As Zynga prepares for the largest technology public offering since Google, I hash it out with Reuters’ tech editor Peter Lauria and reporter Liana Baker over Zynga’s estimated $9 billion valuation.

Imagine you’re a reporter and you suddenly witness a major news event occurring right before your eyes. Do you snap it to the wire, file a story to your website, or tweet it out to your followers? If you’re at the AP, you damn well better not choose the latter.

In a perfect world, you’d want to do all the above, though your employer is going to likely want you to do the first two before you tweet. Today, Reuters is a lot more than just a wire service. We’ve built — and are continuing to build — what we think is the world’s greatest news website, in the form of Reuters.com, and part of that is providing our readers with reliable and timely news, information, opinion and analysis.

An extension of that website is the information we post on our social media accounts, at Google+, Twitter and on Facebook. We’re not just reporting our own news there, but have become a beacon for all news, being as comprehensive as possible so readers come to us first for all they need to know. We’ve got things like Counterparties, created by Ryan McCarthy and Felix Salmon that does a great job at bringing news from around the web to our readers.

The wire is still a huge part of our business and always will be. However, acting in a way that handcuffs us from doing our best work on Reuters.com and on social networks, which help drive traffic and extend our brand, is writing a death sentence for us as a future media company. To bury our head in the sand and act like Twitter (and who knows what else comes into existence next month or five years from now?) isn’t increasingly becoming the source of what informs people in real-time is ridiculous.

In order to compete with these new and existing technologies, our wire will need to increasingly become better and faster, not only for our subscribers but for the reporters using it to file reports. The fact that it is easier to fire off a Tweet than it is to snap a wire report is unacceptable. Having a policy where you’re asked never to post something on Twitter before it goes out over the wire will put us at a competitive disadvantage, as other news organizations develop a reputation for being the first to report accurately all the news that matters. As my esteemed colleague Robert MacMillan points out: “in some cases, the tweet before the scoop might be the only way to beat your competitor if your competitor has no restrictions on tweeting,” and “when a news outlet tells a reporter, “don’t tweet first,” in some cases that means that news outlet has lost the edge.”

The institutional brand building you create by having your journalists be great on social platforms cannot be underestimated. Part of having your journalists on these platforms is giving them the freedom to be a normal human being, not a robot, a PR machine or a slave to the wire. Do we want to serve the wire above all, since our paying customers deserve to get that information first? Yes, we do. But we can do that without sacrificing the incredible value we create by making ourselves a must-follow on all social networks because of the information we provide and two way conversations we can have with our readers. We can only do that if we’re not tied down by rules that ignore the reality of the present and the future of media.

Our direct competitors and two guys in a basement somewhere are already developing tools to be the next generation newsroom. If we’re not busy doing the same thing, we’re dead.

Google has had a series of embarrassing flops when it comes to new products. Google Wave was too complicated and didn’t solve a problem anyone had. Google Buzz never caught on with enough people to become useful. Now, they’ve set their sights directly on Facebook with Google+ and after spending a little less than a day with it, I have to admit I am intrigued.

There are a couple of things that make Google+ compelling. The first is that despite the fact it’s still in limited beta, with many folks begging for invites from friends, it feels active and alive. When you log in, it appears like the early days of Facebook, before they piled on app after app and feature after feature.

Being the new thing is an advantage, because you can focus on the features that people really want. Google+ focuses on a feed of updates, similar to the Facebook Wall, and forces people to place their contacts into “Circles” which is similar to Facebook’s “Groups” that seems to be utilized only by a small audience.

Circles allow you to focus on the things a subset of your contacts are interested in, helping to separate the signal from the noise. This is the biggest problem with not only Facebook but with Twitter as well. Power users on Twitter use “Lists” and this makes the experience of Twitter much better, especially for people who depend on Twitter for information and news.

For those who use social media to consume news, there’s a Google+ feature called “Sparks” that allows you to track Google News sources for any keyword you want and the stream can be accessed within the same space you’re following friend updates.

The largest image hosting website today is Facebook, and with apps like Instagram trying to hone in on their turf, they’re keen to get into the mobile photo sharing game as well. What really kicked up Facebook’s image hosting was picture tagging. Where Facebook has started to fall apart is the presentation of the images, which is a bit wonky. Google+ doesn’t have critical mass with image tagging yet, but they’ve got the same functionality built in, along with a much sleeker, simpler way of presenting images in a nice neat grid format. For either Google or Facebook to remain fresh, though, they’ll need to come up with their own version of what Instagram has done to capture the photo sharing zeitgeist.

The final major feature is Hangout, which lets you have a spontaneous video chat with multiple people in any particular Circle. This is something unique that Facebook doesn’t currently offer and could likely be a big draw for teenagers to socialize with friends. It could potentially be a competitor to Skype and even to WebEx if they allowed screen sharing. Tie it to Google Docs and now you have a really powerful collaboration tool.

Another important component that Google is pushing in order to separate themselves from Facebook is their “data liberation” which allows you to pack up and take your data away from Google+ should you decide to leave the service. They even made a somewhat tongue-in-cheek video to tout it, as seen here:

Privacy has always been one of the pet peeves of Facebook, and how difficult they make it to leave and take your stuff with you. Google was wise to make this a major feature of Google+.

The true test of Google+, though, will be to see if it survives given all the other digital distractions already available. Will it be the shiny new tool that becomes a fast fading fad or will it draw us away from our existing social networks of Facebook and Twitter?

The first time I used Skype I was in awe. The video quality, the effortlessness it allowed me to see and hear my family far away over my laptop computer screen was magic. It was even more magical when I tried it on my iPhone — a Dick Tracy moment. And it was more impressive than FaceTime because it allowed me to talk to anyone with Skype, not just with those who had an iPhone.

Today, Skype will likely begin to be lost in the maw that is Microsoft. Sure, Microsoft still remains one of the most valuable companies this country has ever produced but aside from the XBox, it hasn’t been on the leading edge of innovation in many years. Apple, Google and companies like Facebook and Twitter are seen at the forefront of the digital age. Microsoft, in comparison, seems like the once great star athlete, a Michael Jordan attempting to regain some glory by playing minor league baseball.

The best case scenario here is that Microsoft rolls Skype into a product like Kinect, which hasn’t quite taken the world by storm, and becomes a simple, easy to use videoconferencing device for the living room, that takes us beyond just hunching over our computers to interact with our friends who are far away.

The reasoning, however, provided in a rather unimpressive press conference by the awkward and uninspiring Steve Ballmer, was to bring new customers to Windows and Office. I can tell you with some degree of experience, business users want screen sharing but they don’t have a great need for videoconferencing. It isn’t a tremendous business advantage or productivity tool.

If, instead, Microsoft predictably turns Skype into Windows Messenger Live Video Vista Professional Edition, then we will have watched one of the most exciting products developed in the last century killed off in the interest of its shareholders.