Betwixt and between: Facebook’s act of desperation
On Monday, the Wall Street Journal reported that Facebook is considering lowering the minimum membership age to include tweens. It raised eyebrows and kindled a new discussion about privacy and the propriety of inviting youngsters into what the company aspires to make the world’s biggest salesroom.
But I have a different concern: Soliciting children would be pretty strong evidence that Facebook needs a big boost to its already staggering 900 million membership to justify its valuation and business model. Having courted every early, middle and late adopter possible, there isn’t much low-hanging fruit for Facebook anymore. But courting tweens would inevitably invite scrutiny and regulation, since the prospect of cyberstalking is even more toxic that cyberbullying.
In other words, the potential rule change looks like an act of desperation. Coming off a miserable stock market debut, both the merits and atmospherics of this notion are decidedly bad.
It’s easy to see why this would be on the table. Facebook has to prove that it can sell things on a massive scale, that it is the 21st century’s answer to television. All of that seemed possible before it went public on May 18, as the company’s valuation was pushed up steadily for months in thin trade on private exchanges among well-heeled insiders. But the question of just how good an advertising medium Facebook can be has been pressed by a steady decline in its share price during 12 days of trading – to about 60 percent of its historical high. Until Facebook can prove its business model, it’s a good idea to keep bulking up so that a leveling off of membership, or even a decline, doesn’t turn the story really ugly.
For Facebook greater, and growing, numbers are essential. Like panning for gold, you need a lot of water to come up with a few grains. So to achieve gold-rush growth, Facebook has to mine the young end of the spectrum.
That’s partly because there isn’t much else to mine. The size of Facebook’s user base is mature – and the fastest growing demographic is already of the mature: middle-aged people and above account for 46 percent of the membership. Age 24 and younger are a mere 14 percent. The youngest age group is ripe for the picking, but the risks are high: It is most vulnerable, immature and incapable of coping with the sort of challenges even adults have trouble dealing with on social networks. So why ask for a world of hurt – unless you have to?
Facebook has flirted with the idea for a while, of course. The Journal reminds us that CEO Mark Zuckerberg himself floated the idea a year ago: “That will be a fight we take on at some point,” he told Fortune in May 2011.
On Monday, the Wall Street Journal reported that Facebook is considering lowering the minimum membership age to include tweens. It's a cry for help – evidence that Facebook is scrambling to justify its huge valuation. Join DiscussionFacebook’s No. 1 music app raises $16 mln
RootMusic is not one of the better known names in the digital music business, but in just 18 months it has built the most popular music app on the world’s largest social networking platform, Facebook.
That service is called BandPage and allows artists’ to post their video, sell songs and promote their tours on Facebook.
Though this might seem like a service with a relatively low barrier to entry — it is free and up to the artists or their representatives to post their videos — RootMusic has done a quietly efficient job of achieving scale and now claims some 250,000 musicians using BandPage.
That scale has helped to raise $16 million in Series B funding to expand its service, the start-up said on Wednesday. It said the round was led by GGV Capital with new investor Northgate Capital and existing investor Mohr Davidow Ventures. GGV Partner Hany Nada is set to join the board that already includes Bill Ericson from Mohr Davidow.
RootMusic will undoubtedly feature on Facebook’s planned music service which is expected to launch later next month at the Facebook Developer Conference.
Rootmusic is not one of the better known names in the digital music business but in just 18 months it has built the most popular music app on the world's largest social networking platform, Facebook. That service is called BandPage and allows artists' to post their video, sell songs and promote their tours on Facebook. Join DiscussionTech wrap: Apple vs HTC, round two
Apple has kicked its intellectual property dispute with Taiwanese smartphone maker HTC up a notch. The company filed a new complaint against HTC with a U.S. trade panel over some of its portable electronic devices and software, according to the panel’s website. Apple filed a similar action against the company last year and could be trying to strengthen the case against its rival by adding new patents to its claim this time around, notes AllThingD’s John Paczkowski. “It’s another broad warning to the industry,” he writes.“If you’re bringing a new smartphone to market, you had better make damn sure it doesn’t infringe on Apple’s IP.”
The first e-reader to fully integrate Google’s eBooks platform into its design goes on sale exclusively at Target stores across the U.S. next weekend, Google said in a blog post. The iRiver Story HD lets users buy and read e-books from the service over Wi-Fi and store their personal collections in the cloud. Google offers more than 3 million free titles for download through its eBooks service, with hundreds of thousands more for sale.
LinkedIn, the online networking website aimed at professionals, surpassed Myspace in June to become the second-most popular social network in the United States, according to a new survey from comScore. Just how much more popular is LinkedIn now? According to the figures, LinkedIn had 33.9 million unique visitors in June, a jump of about a half a million from May. Myspace, on the other hand, saw its traffic decline to 33.5 million American visitors, a drop of about 1.4 million users from the previous month.
Apple, Microsoft, Research in Motion and three other leading tech companies received court approval to buy wireless patents from bankrupt Nortel Networks Corp for $4.5 billion. A total of 6,000 patents and applications were included in the sale and fetched three times what some analysts expected from the auction in June.
Your daily dose of technology. Join DiscussionTech wrap: Verizon ditches unlimited data plan
Verizon Wireless customers, say goodbye to the days of unlimited Web surfing for a set fee on your smartphone. The biggest U.S. mobile provider will stop offering its $30 all-you-can-surf deal later this week, replacing it with a new tiered approach to data pricing. Customers who keep their smartphone use to 2 gigbytes (GB) of data per month or under won’t see a change to their bill, but those who go over that limit will be slapped with an extra $10 charge per GB. Heavy mobile users will have the option of signing up for a 5 GB or 10 GB plan for $50 or $80 respectively. AT&T made a similar move last year, meaning Sprint is now the last major wireless carrier offering unlimited data use. CNET reports that Verizon will also start charging for access to its mobile hot-spot service, which up until this week has been free and without bandwidth restrictions.
Aspiring cord cutters across Latin America and the Caribbean, rejoice. Netflix is on its way. The company, which offers TV shows and movies over the Internet and DVD rentals through the mail, will be expanding its online video streaming service to 43 countries in the regions later this year. Shows and movies will be available to subscribers in Spanish, Portuguese or English on PCs, Macs and other mobile devices that are able to stream from Netflix, the company said in a blog post. The overseas expansion marks the company’s second foray outside the United States. It began offering its services in Canada last year.
You’ve heard it before and now you’ll hear it again – the next iteration of Apple’s iPhone is on its way this September. Supply-side sources told Asian IT industry newspaper DigiTimes that Taiwan-based notebook maker Pegatron Technology has received an order to make 15 million iPhone 5/iPhone 4 handsets that are set to ship sometime in September. The iPhone 5 is not expected to differ much from the previous model on the surface, according to the report. As AllThingsD’s John Paczkowski points out, the real differences are expected to be “under the hood” where you’ll find a faster processor and better rear camera among other improvements.
Another day, another lawsuit against Google and Microsoft. This time, a Louisiana company is suing the two tech giants for infringing on one of its patents with their map websites. Transcenic said in court documents that Google’s Streetview and Google Earth and Microsoft’s Streetside infringe on its technology, which covers systems for capturing and navigating within panoramic images.
Nearly a week after News Corp sold Myspace to Specific Media and pop singer Justin Timberlake, and news is finally starting to seep out about what the new owners plan to do with the social media site. Mashable reports that Timberlake, who now has an ownership stake in the company, may use it as a platform to host talent contests. That could be a good strategy given the site’s roots as a platform for bands and musicians.
Your daily dose of technology. Join DiscussionTech wrap: And Myspace goes to . . .
News Corp’s hunt to find a buyer for once-mighty social networking website Myspace has finally ended. Specific Media, an online advertising firm, has agreed to buy the site for about $35 million, a source familiar with the deal told Reuters. News Corp will retain a minority 5 percent stake in the website it purchased six years ago for $580 million. More than half of the site’s 500 employees are expected to be laid off as part of the deal.
Tech watchers will have to wait at least another sleep to find out more about Zynga’s plans for an initial public offering. A source familiar with the matter told Reuters that the online social gaming firm behind popular Facebook game FarmVille is expected to file for an initial public offering with U.S. regulators on Thursday morning. Earlier reports suggested the company could raise up to $2 billion in the offering and value the firm as high as $20 billion. AllThingsD’s Kara Swisher sizes up how Zynga’s expected IPO fits in with other recent filings from similar companies such as Groupon.
Twitter’s Biz Stone and Evan Williams are leaving the site they co-founded and helped popularize – sort of. Both men will continue to advise Twitter on strategic matters but will spend the bulk of their days working at the newly-revived Obvious, the tech incubator company they started years ago that led to the creation of Twitter. Stone summed up their new plans in a blog posting on his website: “Our plan is to develop new projects and work on solving big problems aligned along a simple mission statement: The Obvious Corporation develops systems that help people work together to improve the world.”
More signs of growth for the much-buzzed about Sqaure, the mobile payment company run by Twitter co-founder Jack Dorsey. The firm just scored a fresh round of financing worth $100 million led by venture capital firm Kleiner Perkins Caufield & Byers. The latest cash injection brings the company’s valuation to $1.6 billion, according to a report on NYT’s DealBook. Square’s technology lets people use their mobile phones to accept credit card payments from other people.
Sony is still playing damage control months after hackers launched a massive attack against the electronics company. It’s latest move? Reshuffling management in its videogames unit. Kazuo Hirai, Sony Corp’s second-in-command, will relinquish day-to-day control of the company’s videogames unit in September, making way for a Welsh-born Sony veteran to take over.
Apple’s iPhone turns 4 years old today. Mashable has created a fun infographic with a timeline and other notable facts about the smartphone that ushered in massive changes to the mobile industry. CNN tech writer John D. Sutter asks whether the iPhone has changed all that much in four years. His conclusion: not really.
In iPhone rumor news, a report on popular tech blog Boy Genius Report quotes an RBC analyst as saying Apple will offer the iPhone 3GS for free on contract after its iPhone 5 launches later this year in an effort to take on Android more directly and reach out to mid-market smartphone buyers.
Your daily dose of technology. Join DiscussionTencent, De Wolfe among interested buyers for Myspace
Chinese Internet holding company Tencent, Myspace founder Chris De Wolfe and Myspace’s current management team are among the 20 odd names kicking the tires at the once might social network to see whether it’s worth buying outright or partnering in some sort of spin-out with current owner News Corp.
Tencent has previously said it is interested in possible US acquisitions.
The names come up in Reuters’ Special Report on ‘How News Corp got lost in Myspace‘, a behind the scenes tale on how the focused Facebook beat the partying Myspace. (We have the story in a handy PDF format here)
In the story, we highlight some of the key problems Myspace faced, some well-known and some not often mentioned:
- It was built on a poor technology base which couldn’t keep up with the fast-evolving Web 2.0 environment
- The $900 mln Google search advertising deal put a lot of limits on what executives could do to improve the site
- There was a lot of political in-fighting between Myspace management and their Fox Interactive overseers
Chinese Internet holding company Tencent, Myspace founder Chris De Wolfe and Myspace's current management team are among the 20 odd names kicking the tires at the once might social network to see whether it's worth buying outright or partnering in some sort of spin-out with current owner News Corp. Join DiscussionOpen Letter To News Corp:
Dear Rupert, Chase, and Jonathan,
Bet you never thought your mistakes, as well as your practice of lying to people, would ever become public did you?
We will assume it is hard to dispute the facts when there are correspondences and audio recordings of all communications that support any representations as it relates to the conduct and activities by, and/or on behalf of News Corp, MySpace, and its representatives.
If Chase, Jonathan, or Rupert would personally, and on behalf of News Corp and MySpace, provide authorization and permission to release all correspondences and recorded telephone conversations related to this matter. We would be willing to accommodate that request by providing to several media outlets, including Fox News, all related materials so that a “fair and balanced” determination could be made as to how News Corp does business.
This shall also allow outside individuals, parties, media and the public to determine how badly Carey and Miller, through their activities and conduct, destroyed MySpace and drove it from a success to a complete failure.
As a result of their unwillingness to further discuss and initiate a process that would have generated the stated revenues and results as referenced due to their egos and the greed obstructing their ability to apply common sense to this matter, and to utilize their brains. They have effectively destroyed MySpace and drove its value down more than any other reasons for the decline and eventual failures of MySpace.
We shall see if Carey, Miller, or Murdoch are willing to let the public in on the truth, and provide authorization so that the referenced material may be released, as well as all related documentation in support of these same representations as have been made and as they relate to this matter.
Here are the facts; Carey and Miller were provided the opportunity to change the direction of MySpace last year with a proposal that would increase the net profits of MySpace to 1.5 billion dollars by the third year.
Based on our experience with News Corp, Carey, and Miller no one should trust any of them.
They requested that we disclose the plan to them without any written agreement in place. When that was refused there were no further discussions. And for the record New Corp has a documented history of being given ideas and concepts, and then incorporated those same ideas or concepts. They later claim that they already had been developing those ideas or concepts, and effectively cut out the party or parties providing them with any such ideas or concepts.
This knowledge not only comes from similar occurrences experienced by other individuals. But this was also learned from previous experiences in prior dealings with News Corp and/or their affiliates. You should not trust News Corp and demand that a written agreement be in place, accompanied with detailed documentation of all transactions, and well maintained records of any business dealings you may have with News Corp, their representatives, and/or affiliates.
I would venture to guess that any entity they claim to be offering more than 10 million dollars for MySpace would be another misrepresentation when considering the current state and condition of MySpace.
It is believed that the damage that Carey and Miller have inflected to MySpace has brought its value down to nothing.
Anyone that would be willing to pay the 50 to 250 million dollars to purchase MySpace, as News Corp alleges, would probably mean one of two things. Either they lied to MySpace about what they were willing to pay.
Or a more likely scenario would be that News Corp, Murdock, Carey, and Miller are making gross misrepresentations in an effort to drive the sale price of MySpace up.
TIME WILL TELL!!!
from Reuters Investigates:
Myspace and Facebook: the numbers tell it all
Yinka Adegoke delves into what happened at Myspace in his special report today: "How News Corp got lost in Myspace."
Weak technology, management in-fighting and a rival called Facebook led to the rapid decline of the once dominant social network.
Read the special report in multimedia PDF format here.
These two graphics are telling.
Weak technology, management in-fighting and a rival called Facebook led to the rapid decline of once dominant social network Myspace. Join DiscussionTech wrap: Amazon’s storm cloud
Amazon.com faced a backlash from the music industry after it introduced Cloud Drive, an online “music locker” that lets customers store music files on the company’s Web servers instead of their own hard drives and play them over an Internet connection directly from browsers and on phones running Google’s Android OS. Sony Music was upset by Amazon’s decision to launch the service without new licenses for music streaming.
Amazon’s Cloud Drive “is an amazing value and pretty easy to use”, but won’t kill rival Dropbox just yet, Business Insider’s Steve Kooch wrote. The Wall Street Journal’s Peter Kafka thinks Amazon’s cloud move isn’t earth shattering and “if you’re a music lover looking for a paradigm shift in the way you consume tunes, this won’t be it”.
Mozilla released its Firefox 4 Internet browser for Android phones, which allows desktop users to synchronize their history, bookmarks, tabs and passwords, according to Mozilla.
Twitter co-founder Jack Dorsey, who returned this week to the company after a two-year absence, said he wants to make the microblogging site more approachable to the masses, acknowledging that the service is “something that people can’t immediately get their head around”.
AT&T’s $39 billion bid to buy T-Mobile USA came under scrutiny from New York’s attorney general, who said he is looking into its possible anti-competitive impact.
News Corp held talks to give control of Myspace to the music label-owned video site Vevo.com, but the likelihood of a deal being reached was slim, a person with knowledge of the talks said.
Separately, News Corp said that an increase in new, paying digital subscribers to its UK paper The Times has more than compensated for a drop in print circulation.
Your daily dose of technology. Join DiscussionWhat a colossal waste of bandwidth if all music was in the cloud. Pay as you go internet will soon follow, and you will have to keep on paying for access to your already paid for music. This will be the not-so-popular streaming services re-packaged as ownership. Fortunately, I can store all my music myself, and play it flawlessly anywhere, already. iPod rules!
Today In Music: MySpace’s entertainment focus to lead to job cuts. Tomorrow perhaps?
We’d previously heard that MySpace is on course to cut jobs soon and AllThingsD today put that number at around 550 to 600 jobs and promises the announcement will be coming tomorrow.
The way one person familiar with the company’s thinking puts it, MySpace will be restructuring to realign its staff better with its new focus as a social entertainment site targeting Generation Y. It would also give it an opportunity to resolve various legacy issues. Being a social entertainment site would probably be an easier path than as a social networking site on a hiding to nothing versus the all mighty Facebook but there are probably still questions about how it will make its money beyond advertising. MySpace despite its troubles still remains a key venue for promoting established bands and thousands of aspiring musicians.
The other story from AllThingsD is that News Corp, as we’ve reported, is also being considered for sale but ATD (which is also owned by News Corp) points out that the parent company is shopping MySpace primarily to private equity buyers though Yahoo is also being considered.
Currently, no talks are happening at News Corp with outsiders on this but it’s a very fluid situation which could change very rapidly once the ‘realignment’ has happened.
It seemed only a few years ago MySpace was the new hot thing on the block but times change rapidly in social media. Below is a pic of News Corp chief Rupert Murdoch and MySpace founder Chris De Wolfe in happier times in 2007.(Photo: Reuters)
We've heard that MySpace is on course to cut jobs soon and AllThingsD today put that number at around 550 to 600 jobs and promises the announcement will be coming tomorrow. Join DiscussionTwitter’s Costolo: not quite footloose and fancy free
You’d think fast-racing Twitter would keep one eye firmly fixed on the rearview and side mirrors.
With the Internet landscape littered with also-rans — from pets.com to AskJeeves.com to a Facebook-steamrolled MySpace — you’d imagine the one thing overnight Internet microblogging phenomenon Twitter would fear the most would be to get displaced by an up-and-comer with the same alarming speed.
Not so. Chief Operating Officer Dick Costolo insists no one at the company he has worked at for less than a year worries about two theoretical guys in a garage dreaming up the next social networking sensation.
“That’s a fun question. The way I think about that is the only thing to prevent us from being successful is us,” said the co-founder and CEO of FeedBurner, a digital content syndication platform that was acquired by Google in the summer of 2007. “This stuff that’s out of my control — I’ve got no hair and I’m too stressed out as is,” said the bespectacled, balding executive who joined Twitter in September.
“We all kind of make it our job to understand what the landscape looks like but we make it a point to reinforce to each other that we’re the people that are going to make Twitter successful, not the success or failure of the competition.”
That’s not to say Costolo and his company are luxuriating in a carefree existence. With more than $100 million raised from the likes of T. Rowe Price, Benchmark Capital and other investment names – granting the four-year old firm an eye-popping $1 billion valuation — tons of hype and the attendant hopes, Costolo is well aware of the need to meet some of those lofty expectations.
“We’ve got things to prove before we get there,” admitted Costolo, an amateur stage performer. “I constantly, constantly, constantly worry about what we need to do to be a self-sustaining business.”
With the Internet landscape littered with also-rans -- from pets.com to AskJeeves.com to a Facebook-steamrolled MySpace -- you'd imagine the one thing overnight Internet microblogging phenomenon Twitter would fear the most would be to get displaced by an up-and-comer with the same alarming speed. Join Discussion
OMG! It’s a good business decision, not an act of desperation. It is fraught with peril, but me thinks Abell is desperate for a story!