MediaFile

We are witnessing a fascinating changing-of-the-guard moment in tech. The old Internet, represented this week by once-mighty Yahoo, is fumbling with another leadership crisis it must solve before it can even think about restoring some semblance of relevance. The new Internet, Facebook, is ruled by a young man in a hoodie who is on the verge of creating a massive public company that, as was the nascent Yahoo back in the early ’90s, will be an Internet darling longer on potential than track record, but running hard on an open field.

The common thread might seem to be the “If it’s big, it’s gotta be BIG” illusion that got us all in trouble at the turn of the millennium, when Internet investment hysteria equated today’s eyeballs with tomorrow’s profits. But it’s always about the profits, and the people who promise them. This time that person is Mark Zuckerberg, who as the books on the Facebook IPO closed Tuesday, well in advance of Friday’s first trade, seems to have convinced Wall Street that his seven-year-old company could be worth more than $100 billion — the richest-ever launch in Silicon Valley.

When you value your company at 100 times revenues, investors are banking on the belief that Zuckerberg has perfected the unstable compound that is social abandon and advertiser hunger.

Search remains pretty much the top use of the Web (as opposed to the Internet) – the gateway to everything else. The other big use is now social, which was invented on the Web but whose chops will be tested in the app schoolyard that is the mobile Internet.

But thus far, advertising works better on search than social. Google makes about $40 billion a year, almost 100 percent on ads. Facebook is reporting last year’s revenues at just north of $1 billion $3.7 billion. Google has a market cap of roughly $200 billion – so it’s twice as big as Facebook’s IPO valution and makes 40 times the money more than 10 times the money.

The startup had millions of users, but, from the beginning, just one customer.

The predominant way of interpreting Facebook’s billion-dollar purchase of Instagram, in light of the social-networking giant’s forthcoming IPO, is that Mark Zuckerberg had to pick up the photo-sharing app to boost his company’s mobile engagement. That would allow him to guard the mobile flank against incursions from Google, Twitter, and whatever other social-media tools might next arise.

That may be true – and it may even be the way Zuck thought about the deal when he swallowed hard and ponied up the purchase price. But that way of analyzing Facebook’s pickup, and the pickup of dozens of other startups, not just by Facebook but by Google, Twitter, LinkedIn and others, is probably not telling the whole story. Here’s a different theory, one that better describes the tech world that we, the users of the Internet, now inhabit: Instagram may have had millions of us as its users, but it was really built for just one customer: Facebook.

Silicon Valley, for too long, has confused the issue of what it means to be a user of a website, service or app, and what it means to be a customer of the app. Intuitively, you’d think they would be one and the same: The person using the app is the person consuming the app. But increasingly, apps are being made to grab the attention of the hegemonic companies in tech. Whatever it takes to get bought.

Pinterest has yet to provide many details about how it intends to make money from its fast-growing image-sharing social service.

But that’s not stopping others from trying to capitalize on the online service’s rich catalog of product images.

Copious, a social commerce start-up, launched a new version of its website on Monday that lets consumers buy many of the bags, shoes and other fashion accessories that get shared by Pinterest’s millions of users every day.

Another photo sharing website has come into play. But this one is not new and already has a fairly decent following in the all-important mobile space.

LiveShare, the brainchild of Palo Alto startup Cooliris, is currently available as an app on iOS and Android mobile devices. But the company has now created a presence outside of these mobile platforms by launching a Web-based platform, which makes the service a bit more independent.

The website, which went live today,  is targeted mainly at  students, digital moms, young professionals and ex-pats who want to communicate effectively, Cooliris co-founder and Chief Executive Soujanya Bhumkar said. The app, in particular, has some streed cred amongst the ex-pat community.

This guy probably has social media clout. How many 'likes' will he get this November?

What would you get if social media ego measurement tool Klout had a baby with comScore, the Web traffic measurement firm? It would  probably be Unmetric, a new “social media benchmark” tool that helps brands measure their social media engagement.

If you’re a big brand-owner all those Facebook Likes and Twitter Retweets by your customers and ‘fans’ are fine but what do they really mean in terms of engagement and customer sentiment? More importantly, how do they stack up against your rivals? These are some of the questions Unmetric hopes to help answer after raising $3.2 million in Series A financing led by Nexus Venture Partners.

Facebook Director of Marketing Mike Hoefflinger announces a new "Premium on Facebook" service in New York City

The news Facebook is buying mobile photo app start-up Instagram has sparked off speculation that social networking giant might go on a buying spree in the run-up, and after, its expected $100 billion initial public offering in a few weeks.

Irish betting house Paddy Power, in a fairly transparent PR stunt, has sent out the odds it’s offering punters who want to bet who would be next on Facebook’s list. In a sure sign that the list of names was rustled up overnight right after the news (a bit like today’s blog actually) the list starts off with more than a modicum of respectability with solid names like location-based check-in app company Foursquare at odds of  4 to 1  and note-taking service Evernote at 9 to 2. It follows with some other interesting names like Dropbox, Spotify and Pinterest all in single digit odds.

Here’s one good thing about being a Yahoo employee: if you quit and join Yammer, a social networking service for businesses, in the next 60 days you’ll pocket a $25,000 signing bonus.

That’s the offer that was tweeted on Thursday by Yammer CEO David Sacks.

“They’ve got a lot of great engineers there,” Sacks said in an interview with Reuters. “The talent has been misused by senior management which has made a lot of bad decisions.”

Of course, when Sacks (whose credits include producing and financing the 2005 film Thank You For Smoking)  isn’t whispering sweet come-ons to Yahoo employees, he’s holding a gun to their heads. Infuriated by Yahoo’s controversial decision to sue Facebook for patent infringement, he vowed a day earlier that he would never hire another Yahoo employee that doesn’t leave the company in the next 60 days.

Vevo, the music video company, has relaunched the popular site with a more personalized, social, long-play viewing experience getting closer and further away from that MTV experience at the same time.
One of the big changes is that you can now only get the full benefits of Vevo with a Facebook login in, which allows you to create a personalized Facebook playlist and share the videos you’ve watched with your friends on Facebook.

Vevo was the second most watched online video service in the U.S. in January with more than 51.5 million unique visitors watching an average of 62  minutes of video that month according to comScore. It is also YouTube’s number 1 partner.

A reminder that Vevo is owned by Universal Music Group, Sony Music Group and the Abu Dhabi Media Company, It also features music videos from EMI and many independent labels but not Warner Music Group, the third largest label owner.

Lately Internet users in the U.S. have been worried about censorship, copyright legalities and data privacy. Between Twitter’s new censorship policy, the global protests over SOPA/PIPA and ACTA and the outrage over Apple’s iOS allowing apps like Path to access the address book without prior approval, these fears have certainly seemed warranted. But we should also remember that Internet users around the world face far more insidious limitations and intrusions on their Internet usage -- practices, in fact, that would horrify the average American.

Sadly, most of the rest of the world has come to accept censorship as a necessary evil. Although I recently argued that Twitter’s censorship policy at least had the benefit of transparency, it’s still an unfortunate cost of doing global business for a company born and bred with the freedoms of the United States, and founded by tech pioneers whose opportunities and creativity stem directly from our Constitution. Yet by the standards of dictatorial regimes, Internet users in countries like China, Syria and Iran should consider themselves lucky if Twitter’s relatively modest censorship program actually keeps those countries’ governments from shutting down the service. As we are seeing around the world, chances are, unfortunately, it won’t.

Consider the freedoms -- or lack thereof -- Internet users have in Iran. Since this past week, some 30 million Iranian users have been without Internet service thanks to that country’s blocking of the SSL protocol, right at the time of its parliamentary elections. SSL is what turns “http” -- the basic way we access the Web -- into “https”, which Gmail, your bank, your credit card company and thousands of other services use to secure data. SSL provides data encryption so that only each end point -- your browser and the Web server you’re logging into -- can decrypt and access the data contained therein.

Google got its hand caught in the cookie jar last week — and this time it really does have some explaining to do.

The search giant, which derives some 97 percent of its revenues from advertising, thought it would be all right to circumvent some protections incorporated into Apple’s Safari browser so that it could better target its ads. By intentionally bypassing the default privacy settings of Apple’s Safari browser — and, as Microsoft has now asserted, Internet Explorer — Google has decided for all of us that our Web activity will be more closely tracked. They opted us in, without asking. And without a way for us to opt out. (We didn’t even know about it until the Wall Street Journal blew the lid off this last Thursday.)

On the merits, this is a pretty big deal. A class action has already been filed, and an FTC probe is almost certain. That the no-tracking settings were circumvented (and secretly) makes it easier to infer that even Google worried it might be touching a third rail. It says it wasn’t, that its intent was only to discern whether Google users were logged into Google services and that the enabling of advertising cookies was inadvertent.