Last night Josh Elman posted on the Facebook blog about the rise in applications that are embedding videos provided by the television networks. Watercooler’s TVLoop applications use Hulu to display videos of show episodes and Mesmo TV is displaying the shows as well. Both have had mixed results and Mesmo TV has dropped from over 681,000 monthly active users to around 472,000 as displayed in the chart below.



What’s interesting is Facebook’s current strategy to leave distribution deals to their developers. While the existing television videos on applications are done through Hulu for the most part, the one company which doesn’t appear to be finalizing any media distribution deals recently is Facebook. The other social networks have been busy signing deals.

Just yesterday Meebo announced a deal with Universal Music Group. Bebo has also been busy signing distribution deals as well as creating their own shows. imeem got Britney’s new album debut. Facebook has been rumored to be in conversation with music companies but nothing has materialized yet. While I’ve suggested that social networks are the next television, Facebook has yet to fully embrace the media.

MySpace on the other hand has rolled out MySpace Music. While Facebook may not have dropped the idea of media distribution, does it make sense to rely totally on other applications for forming distribution deals? With such substantial leverage, you’d imagine that Facebook would be working on something bigger. Do you think it’s better left to developers to forge deals or should Facebook do something bigger?

David Spark (@dspark) is a veteran tech journalist and the founder of Spark Media Solutions, a storytelling production company.

De-friending has always been awkward. Social networks offer one click “remove a friend” options, but it still doesn’t make the decision any easier.

What follows is a collection of stories about de-friending. In summary, what I discovered is that everyone approaches their social network differently and it’s impossible to communicate all those nuances when you choose to de-friend.

As you read, keep in mind that these are all one-sided stories. The interviewees made their best guess as to why the de-friending happened or how the offending party felt after being de-friended. I purposely didn’t include stories of de-friending romantic exes because those de-friendings are obvious. If you see a real name and in some cases a link to their profile page, I received permission to publish. In all other cases where people wished to remain anonymous, I replaced their name with the first name of one of my ex-girlfriends or one of my wife’s ex-boyfriends.

1. Squashing opportunists trying to grow their network

Andrew Bouchard is a member of the Nashville swing dance scene and it’s reflected among his Facebook friends. One day a request came from Jane Dubuffet (not real name), who happened to be friends with five other of his swing dance friends. He couldn’t remember her, but friended her anyway.

Soon after, Andrew received an invitation to join the group “Who is Jane Dubuffet?” Having all fallen for Jane’s friendship requests, the group of 50 members quickly discovered that this mystery woman had infiltrated the Nashville swing dance scene just to grow her business network. Unimpressed, Andrew decided to scratch Jane off his dance card.

2. Getting laid off can be embarrassing, especially if you were bragging about your job

Liz’s college friend Dave wouldn’t shut up about his new high powered consulting job. After a few quick promotions that inflated his head, the bubble burst. Dave got laid off. Ashamed, he quickly closed up his social network so certain people, like his ex-girlfriend, wouldn’t find out and take pleasure in his misfortune. So he began de-friending all those connected to his ex, like Liz, who worked with his ex.

3. Parents can be embarrassing exhibitionists

On Facebook, Lauren leaves outrageous status updates about her mock drug use. Her mother, new to Facebook, wasn’t in on the joke. After seeing an update announcing that Lauren’s superpowers might be tempered by PCP, her mother responded and laid into her. In turn, Lauren looked at her mother’s profile and saw that her mom posted a photo of herself in the pool, nude! While Lauren couldn’t actually see any of the naughty bits, it was obvious to Lauren that her mother was nude. Lauren called her mom on it, de-friended her, and ever since their relationship has been strained.

4. Take a hint. I don’t want you in my show

Coordinating an arts management program, Aaron accepts friend requests from more artists than he puts in his shows. While Aaron accepted Dustin’s MySpace friend request, he let him know that he wasn’t good enough to be in one of his art shows. Retaliating, Dustin began leaving nasty messages on Aaron’s blog and MySpace profile. Aaron de-friended Dustin on MySpace and Facebook only to discover that even if they weren’t friends, Dustin could still leave nasty personal messages through his Facebook profile.

5. Guilted back into re-friending

Denise V.’s kickball teammate had a little too much to drink one night after a game. His obnoxious behavior really got to her. She had enough. Not wanting to see his updates anymore, Denise de-friended him to which he quickly responded, “Whoops, I may have de-friended you accidentally when I was removing some coworkers. Or else you de-friended me on purpose because you are a hater…” Caught, Denise felt obliged to re-friend him because they have so many mutual friends and they see each other once a week. Having told her friends the story, Denise is often jokingly referred to as the “hater.”

6. De-friending can regress mature women into a high school gossip mob

Jill received a message from her friend Megan asking, “When are we getting together? Miss you.” Moments after that message, Jill discovered that Megan had de-friended her on Facebook. That was odd. She gets a “let’s get together” message, the two of them hang out twice a week, and they have lots of mutual friends. All signs that made Jill believe she was Megan’s friend. Jill didn’t realize that Megan was on a rampage, a three day de-friending bloodbath, cleaning out her Facebook friends list.

The behavior was so strange that all the mature 30-something women who were in Megan’s original friend pool turned into gossiping teenagers. Why did some of them make the cut and others didn’t? Turns out some friends who stayed on were told by Megan that they were being left on because they could be valuable to Megan’s professional network. One friend was told that she was kept on because Megan thought if she de-friended her, which apparently she wanted to do, she would lose her social standing in the group.

7. I really love the Minnesota Vikings, and I don’t care if that ends our friendship

On Sundays, David Erickson goes into full “I love the Vikings” Twitter mode with his MST3K-like running commentary throughout the game. Most people follow him for his marketing advice, but often get fed up once a week on Sundays. David doesn’t get upset that people stop following him. He knows it’s not personal. He just really loves the Vikings.

8. Don’t leave or we’ll all de-friend you

Steven Ortley gave his 2-week notice to his small 35 person PR firm. He was going to leave for a larger competitor, Weber Shandwick. The move came off as a personal insult to his coworkers. As he walked out the door, 18 of his former coworkers immediately de-friended him on LinkedIn. He hasn’t spoken to any of them since, but expects he will since he’s in such a small community. Until then, Steven prepares himself for the inevitable by having awkward conversations about his 401K transfer with his former office manager.

9. Don’t use my personal life as leverage in business negotiations

Doug Cone works hard and plays hard. After getting a little behind on a project, Doug’s colleague took advantage of their social networking friendship at work by using Doug’s posted Facebook photos of his weekend rafting adventures. In team meetings, his jealous colleague would complain, “…and you are sending pictures having fun in rivers with a bunch of girls.” Now de-friended, the colleague doesn’t seem so distracted by Doug’s weekend adventures.

10. I’m ok with your race and religion, but not your political beliefs

I was not surprised to hear that many people de-friended during the political season. Here’s a quick roundup of the offending issues that pushed people to pull the de-friend trigger:

- An argument about abortion rights ended with Jay Ferrari being called a baby killer.

- A good friend of Allison Nazarian called the candidate he didn’t like a “Nazi.” After the de-friending and a discussion, Allison re-friended him, but they don’t discuss politics online anymore.

- Marsha became scared of one friend who announced on his status updates that he hoped all the candidates died in a plane crash.

- Marianne had enough of her friend’s political propaganda harassment. Unfortunately, de-friending didn’t stop the harassment as it continued on email where she had to block him.

- Claire Kiefer had to pull the plug on a friend who announced, “I don’t really HATE Mexicans, but I am sick of all the immigration rallies” and another who photoshopped an Obama campaign sign with an Islamic flag in the “O.”

11. Trying to de-friend your best friend’s ex-girlfriend

Chris de-friended his best friend’s girlfriend during their breakup. Even though the de-friending was unprompted, Chris got roped in with the ex-girlfriend complaining, “How can you say, ‘Let’s be friends’ and then ask Chris to de-friend me on Facebook!”

12. Keep your online flirting to one woman at a time

Michelle Reynolds began cautiously dating David, a guy she met on MySpace. While they were dating Michelle noticed that David was also sending flirtatious messages to some other random woman online. The pick up lines were identical to the ones David had been using on Michelle. He said things like, “Thinking about you,” “Let’s get together,” and “When can I see you?”

While in full blown multi-flirt mode, David began telling Michelle he wanted a relationship. In addition, Michelle saw David send a message to the other woman announcing he was going to take the next plane out to see her. Having seen enough, Michelle finally confronted him, and David began begging and defending himself, “Gimme another chance…I flirt with all my friends like this…I have no interest in that woman at ALL…” Michelle didn’t believe him so she deleted him.

Three weeks later Michelle looked at David’s MySpace page and the other woman’s. Turns out they both had publicly professed their undying love to each other and had moved in together.

I’m sure you’ve been de-friended or had to de-friend someone. It’s always uncomfortable. Please share your story. I’m sure we can all learn from your misfortune. For more insight, please check out “When technology tells us we have no friends,” and “The awkwardness of de-friending.”

David Spark (@dspark) is a veteran tech journalist and the founder of Spark Media Solutions, a storytelling production company. More importantly, he has lots of great friends. Read more of Spark at his blog Spark Minute or listen and subscribe to his “Be the Voice” blog and podcast.

Imagery courtesy of iStockPhoto, swilmor, dolgachov, 7nuit

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This is a guest post by Anu Shukla, CEO of Offerpal Media. Offerpal Media is a leading “managed offer platform” for social applications, virtual worlds, games, and community-oriented websites.

The Opportunity

A new boon is taking place on the Internet. For community-oriented web publishers like social networks, social applications, virtual worlds, MMOGs and other social properties on which traditional advertising has produced such little revenue per user relative to other sites, a new market, led by the proliferation of virtual currency and virtual goods, is rapidly expanding.

No one knows yet the exact size or potential of the market, though even conservative estimates put it at well over $2 billion.

What’s behind the boon? A confluence of factors. Social publishers, forced by necessity to find creative ways of monetizing their traffic, discovered that virtual currency and virtual goods are the most effective way to monetize traffic on their properties. At the same time, infrastructures for virtual currency were becoming more common, and consumers were becoming more comfortable with the whole concept of a virtual economy.

Today, there’s little doubt that virtual currency is the most effective way for social web publishers to monetize their traffic. Drawing from case studies, I have highlighted 10 tips to show how you can successfully integrate virtual goods and services into the overall user experience.

10 Tips for Monetizing Social Traffic through Virtual Currency

1. Understand Your Users’ Motivations

A virtual economy is much like a real economy in that it is driven by human psychology and human motivations including greed, ambition, curiosity, power, a sense of belonging, and others. When creating a virtual economy, it is important to understand which motivation or motivations your economy is addressing. Does it help users satisfy their destructive urges, the way “killing” games like Vampires or its sister-apps Zombies and Werewolves do? Does it give users a sense of belonging and connection, the way Friends For Sale! does? Knowledge of who your audience is from a demographic, psychographic and behavioristic viewpoint is essential for building a vibrant virtual economy.

2. Create Multiple Methods for Users to Earn Virtual Currency

Before your users can spend any virtual currency, they’ll first need to earn it. Some users are willing to simply pull out their credit card and pay real dollars in exchange for virtual ones. For those users you’ll want to offer PayPal or similar credit card options (just be sure to be prepared to also offer customer service, fraud prevention, chargeback handling, technical integration and other supporting efforts if you’re going to integrate with these service providers directly. Platforms like Offerpal Media remove all of these headaches for you). But a majority of users will want other options as well. The method that generates the highest revenue is allowing users to complete targeted, relevant advertising offers in exchange for virtual currency.

3. Sell “Decorative” Virtual Goods

Decorative virtual goods allow users to express their individual personalities. WeeWorld.com, where users get to dress up their avatars to reflect their online personas, is a perfect example of users spending their virtual currency on decorative items geared towards self-expression. Just as clothes, accessories, gadgets and other personal belongings are symbols of self expression in the real world, so too are their virtual counterparts, and people are just as inclined – if not more so – to decorate their avatars, profiles and backgrounds with personalized items as they are to dress themselves up in items that express their individuality.

4. Sell “Functional” Virtual Goods

A second type of virtual good is known as “functional” goods, or those that have an impact on the user experience. These goods are most prevalent in MMOGs such as Mobsters, in which users redeem virtual currency for goods or services that confer some kind of advantage, in this case more territory or more mob members. They are “functional” in the sense that they help advance the game or user experience.

5. Sell Virtual Gifts

A third type of virtual good includes virtual gifts, in which one user sends a graphical icon to another user as a social gesture. This type of good might be the most common on the major social networks today, since they so intimately tap into our need to connect with other human beings. (Lil) Green Patch, with its inherent gifting apparatus, is the perfect example. Its success indicates that a small gesture goes a long way, both online and off, and that people are willing to spend currency, virtual or real, to let others know how they feel.

6. Keep it Fresh

Chances are the users who return fairly regularly conduct the majority of the transactions within your virtual economy. You need to constantly refresh your selection of virtual goods in order to keep those users hooked. The stickiest publishers with the most thriving virtual economies deliver new goods into their marketplace practically every week, if not more frequently.

7. Make it Fun

Like everything on social web sites, taking part in your virtual economy should be fun above all else. Consider giving your currency a humorous name and representing it graphically with an image that contains some kind of pun or inside joke. The virtual goods themselves should in some way delight or amuse your audience, giving them reason to get involved. Social web sites are entertainment, after all, and if you’re not entertaining your audience then they’ll spend their time elsewhere.

8. Promote Your Currency

Once you have your virtual currency in place, be sure to promote it wherever it makes sense. For starters, think about your user experience and be sure to insert messages or notifications in contextually relevant locations. When they first register, for instance, you might show them how to open a “bank” account. Or if their balance is running low, you might message them the next time they log-in that it’s time to earn more currency. In a gaming environment, you’d want to give them notice if they’re just a relatively few points away from advancing to the next level. We also recommend using banners and other types of display formats to run ads for specific offers that will earn your user a set amount of virtual currency. Currency-driven banners have been shown to generate 10 times the click-through rate of non-incentivized banners.

9. Study Traditional Game Mechanics

Long before social applications or social networks or even the Web itself was around, the people who developed arcade games, home video games and, later, MUDs were perfecting ways to engage their users through the mechanics or inherent architecture of their games. People play games for the challenge they represent and the psychological lift they get for achieving results within the game. By tapping into that desire to demonstrate one’s skill, game developers have created user experiences that are fun, compelling and sometimes downright addictive. Five main mechanics that game developers have used to successfully engage their users are:

1. Points


2. Collecting


3. Feedback


4. Exchanges


5. Customization

10. Measure, Analyze and Optimize

As with any web property, for maximum results it’s important to continually analyze your usage patterns to understand what’s working well and what areas need improvement. Are you losing users at any certain point? Do they spend a surprising amount of time in any one area? What click-paths are they taking? When are they most likely to engage with your virtual currency? Develop hypotheses and test for viability. If they work, great. If not, try something else. Continually adjust your economy depending on how your community evolves and the types of currency it seems interested in using. Pay close attention to the whims and behaviors of your user base and optimize your economy accordingly.

Conclusion

While many social web properties have had a difficult time monetizing their traffic, those that have been successful have largely done so by creating virtual economies. Users have clearly demonstrated a willingness to take part in these economies, and the more comfortable consumers become with the concept of virtual economies, the more ubiquitous they will become.

The list of tips provided here is by no means exhaustive, and as the market evolves, so too will the rules. If you have feedback on these tips or wish to add to the list, we encourage you to do so. Future updates and ongoing conversation on the subject matter, will be available on our blog.

While users of Facebook apps built in FBML have been able to post content to friends’ feeds for quite a while, Facebook hasn’t supported the same functionality for iframe apps or Facebook Connect-enabled websites.

However, that’s changing today. Now, iframe apps and Connect websites will be able to use showFeedDialog to publish content to one friend’s wall. However, to publish content to multiple friends’ walls, developers will still need to use the FBML multiFeedForm.

Allowing users to post content (like gifts) to friends’ walls can be a powerful way for applications to grow virally. Profile pages are highly trafficked by friends and stalkers, and feed stories get syndicated to the News Feed for further distribution.

The hot rumor today is that Facebook and Twitter held “several weeks of serious talks” about an acquisition recently, which have since come to an end after the two were unable to reach an agreeable price for the microblogging service. Alas, there are greater tragedies.

While Twitter might be the “it” startup of 2008, it somewhat famously has zero revenue. Meanwhile, although Facebook has become the most trafficked social network, its biggest competitor, MySpace, does a far better job of monetizing its users as it evolves into an online media company. What can Facebook do to counter? Instead of buying the hottest startup on the planet, take a look at acquiring companies with real business models that are in need of what Facebook has – hundreds of millions of users. Here are a few ideas that come to mind:

SmugMug

We know that Facebook isn’t just the world’s biggest social network, it’s also its biggest photo sharing site. SmugMug offers a gorgeous interface for organizing photos, but more importantly, offers serious monetization by letting users buy prints, postcards, merchandise, and more. MySpace recently introduced its own options for photo printing, through a partnership with HP.

Imeem (or iLike)

Increasingly, Facebook’s lack of a music service is becoming one of its most glaring omissions. Recently, rumors surfaced that the company was looking to forge a partnership or outright purchase one of the online music companies. iLike already owns the most popular music application on Facebook, while Imeem offers a more popular destination site and widget network. The business model here is obvious: digital downloads, concert tickets, merchandise, and ringtones. Their big competitor: MySpace Music.

Jaxtr

This startup provides web-based VoIP services, allowing users to create widgets that can be embedded on blogs, websites, and social networking profiles. While all seemed to be rosy as the company passed 10 million users and introduced premium services to make money, Jaxtr recently laid off staff and saw its CEO resign.

What’s the play for Facebook? Like other web-based VoIP services, while member-to-member calling is free, calling out to landlines or cell phones costs money. Since Facebook would be spending $0 on user acquisition (typically a huge cost for VoIP services), that revenue drops right to the bottom line.

An Ad Network

For a while, speculation had it that Facebook would launch its own behavioral ad network, where user’s profile data would be leveraged to serve ads on participating publisher’s sites. Ultimately, we wound up with Beacon, which just freaked people out and ruined a few people’s Christmas. Nonetheless, this remains a huge opportunity for Facebook, and with an unsustainable number of ad networks out there as we head into an economic slowdown, Facebook could pick up a big network (in terms of reach and impressions) on the cheap, and then insert its own behavioral technology behind the scenes.

Digg

Acquiring Digg would be a bit out of leftfield and probably very unlikely; whereas the other names on this list are services that would integrate within Facebook, Digg is its own massive destination site. However, the two companies are already working together to bring Facebook Connect to Digg. News is the cornerstone of any media operation, and Digg, with Facebook Connect, would simply fit the bill without being a boring also-ran in the world of news aggregators.

Plus, with Google no longer interested, Yahoo building its own social news site (Buzz), and the big media companies all being squeezed by the current economy, there aren’t that many companies that would offer a competing bid. On the other hand, Facebook could potentially build their own Digg competitor, based on an aggregate view of user’s posted items.

Will Any of These Deals Actually Happen?

The Pros: all of the businesses above offer Facebook logical ways to make money. The Cons: None of the above are nearly as sexy as Twitter, and they all come with baggage.

Nonetheless, even if Facebook isn’t worth the $15 billion valuation they used to try and persuade Twitter to do a deal, they are in a far better position than most as the economy slows down. Lots of startups with good ideas and good business models simply won’t be able to gain users fast enough to survive. Facebook can scoop up these types of companies on the cheap, get them integrated, and emerge from the current economic downturn as an online media company with diverse revenue streams. On the other hand, the alternative - not doing any deals - isn’t a bad idea either.

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For those not following our advice on how to effectively and authentically market inside Facebook, beware: a US District Court has awarded Facebook a $873 million judgment in its suit against marketers aggressively spamming Facebook users.

Judge Jeremy Fogel made the ruling on Friday in San Jose District Court in Facebook’s case against Adam Guerbuez and Atlantis Blue Capital under the CAN-SPAM Act of 2004. In addition, the ruling prohibits the defendants from “using or accessing, whether directly or indirectly, Facebook’s data, information, computers, computer systems, computer networks, or Facebook user’s accounts, information or profiles for any reason whatsoever.”

While it’s unlikely that Facebook will ever collect the vast majority of this judgment, it does send a loud message to Facebook spammers: Facebook is willing to pursue those abusing its service.

We all have heard the buzz about twitter growing rapidly. Nielsen is reporting today the the year over year growth is at 343%. This makes twitter the fastest growing socail network online. What is really interesting about this statistic is that I am quite candidly surprised that they have pegged the growth at this level. I was anticipating the number would be closer to 500%.

Twitter does not make its traffic or member statistics public. This leaves a lot of guessing for the measurement and analytic companies.

What most of these companies fail to accurately report is the number of users that are accessing the service via mobile. Mobile has some serious reporting challenges. The bottom line here is twitter was designed for mobile interactions with short 140 character texting like behavior interactions. I would suspect that the twitter usage is higher than is being reported here by Nielsen due to the mobile component.

What twitter really represents is not some social media fad. Twitter represents a fundamental paradigm shift in a new communications method. People are becoming quickly adept and addicted to this micro-touch communication method. Twitter just happens to be the first execution of this communication method that has gained traction & adoption. First mover advantage goes to twitter as the eco-system had gained velocity in the past year. All in all this is great news for brands, business, and people that use twitter to communicate.

Twitter Grows 343% According to Nielsen

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Spam definitely doesn’t pay in the long run. Adam Guerbuez and Atlantis Blue Capital learned that when Judge Jeremy Fogel awarded Facebook $873 million in damages for them sending “sleazy messages” to their users. According to Facebook, this is the “largest judgment in history for action brought under the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM)”. You can read more about the act here.

Unfortunately Facebook doesn’t expect that they will ever receive the $873 million awarded to them as spammers typically don’t pay and traditionally operate from abroad. I wrote about the Facebook suit back in August and it looks like the case has finally been closed. I’m guessing that the defendants never appeared in court as they most likely would have been arrested on arrival. A copy of the judgement has been embedded below.

It’s typically not in the best interest of a court case for jurors to speak about the trial, even to friends and family. But one British woman thought that her network on Facebook could help her decide which way to go regarding a trial for which she was a juror. According to CNet, the woman, who’s name has not been disclosed, posted a note on Facebook detailing the trial and holding a poll, in order to help her make a decision.

The woman was torn regarding the court case involving child abduction and sexual assault. The note published on Facebook was set as public, meaning any Facebook member could see her poll. Though I can’t imagine that even a private note would have been the ethical thing to do. Had the note been private, however, perhaps the woman wouldn’t have gotten caught and subsequently kicked off the jury.

I suppose these are the types of situations president elect Obama is trying to avoid, with his added requirements for White House employees to disclose aliases and handles used for Internet communications. If the juror’s note hadn’t been public and there hadn’t been someone available to tip off the British court, her Facebook poll could have made headlines before the proper authorities found out. But if an employer or court authority already knows your aliases used online, then they can actively attempt to protect themselves from similar situations. Creepy? Or a matter of safety and justice?

Image from The Sun

Facebook recently initiated acquisition talks with Twitter for $500 million in Facebook stock, but those talks fell apart as recently as three weeks ago, Kara Swisher reports.

Execs at Facebook, who have long been impressed with Twitter, were trying to make the purchase at Facebook’s $15 billion stock valuation. At the end of the day, Twitter investors were concerned about the valuation of Facebook’s stock, and weren’t ready to sell out to the first suitor when they believe Twitter has the potential to ride out the economic downturn.

Facebook CEO Mark Zuckerberg recently expressed his high view of Twitter when he said at the Web 2.0 conference that he was “really impressed by what they’ve done” and that Twitter has a “very elegant model.”

In separate interviews, Zuckerberg has commented publicly on how important he believes the “status update” feature is to the future of information sharing on Facebook. Instead of writing a few long blog posts, most people like posting many short status updates, broadcasting everything from their activity to their emotions, he has said several times.

When the Facebook redesign launched a couple months ago, the status update publisher was promoted to the top of the News Feed (home page), showing how high of a priority what some have called “micro-blogging” is in Facebook’s and Zuckerberg’s eyes.

For its part, Twitter continues to grow while continuing to invest in resolving the technical issues that plagued it earlier this year. Twitter has become an interesting communication platform in its own right, so it would not be surprising to see additional acquirers for whom owning a communication utility might be strategic emerge.