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Criticism of Facebook

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Facebook's user-targeted ads have been fueling profits and unsettling privacy advocates since the beginning, but a new report shines a light on just how extensive the company's research is. As it turns out. Facebook's data-collection efforts don't stop once you leave their site. They don't even stop when you leave the internet.

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facebook credits

Editor’s note: Dean Alms is the VP of Marketing & Business Development at social entertainment company Milyoni. Follow him on Twitter @deanalms.

Roughly 16 billion Facebook Credits were distributed and consumed in 2011. In 2012, I predict that the use of Facebook Credits will soar by three times to over 40 billion Credits spent on virtual goods, digital goods and more. The growth will be fueled by new digital content available on Facebook, use of Facebook Credits to reward brand loyalty and better marketing of a social currency that is still in its infancy.

The following chart shows the growth of Facebook Credits revenue reported by Facebook from 2009 to 2011.

This chart demonstrates that with a growth rate of 300 percent in 2012 (lower growth rate than in prior years) the number of Facebook Credits in circulation will soon reach 47 billion. If 7 billion remain unused in consumer accounts by the end of the year, then 40 billion will have been spent on social gaming, social entertainment and new innovative applications. At 10 cents per credit, total revenue generated from the Facebook Credits market in 2012 will reach approximately $4 billion.

Can Facebook Credits really grow to over 40 billion in circulation in 2012? The answer is yes. Here are some of the key assumptions and business drivers of this new international currency for virtual and digital goods.

  • Facebook, seeing the opportunity and its contribution to the bottom line, will put forth a stronger marketing effort in order to communicate the value this currency brings to both merchants and consumers. Facebook Credits are still new and their value can still be hard to understand. Many don’t know much about this currency, where to get them, what they can and cannot use them for, and why they matter. This marketing effort will likely leverage mainstream marketing channels: TV, Radio, and Print to simply get the message out—Facebook Credits are hugely valuable and everyone should use them.
  • Retail efforts will pick up steam. iTunes gift cards will face stiff competition from Facebook as young consumers begin asking for these cards for birthdays and holidays instead of a single-brand card like iTunes. The variety of apps with built-in social interaction will create a strong demand for the next-generation of entertainment.
  • Hundreds of big brands and thousands of smaller brands will use Facebook Credits in 2012 as an incentive tool. Facebook Credits will be the airline miles of the next decade as consumers are rewarded with Facebook Credits for brand loyalty. Companies will encourage customers to visit online stores and reward customers with Facebook Credits in varying amounts because the online world-of-mouth and viral effects are endless.
  • Social Gaming will continue to grow with new games and new audiences playing them. Social Gaming, currently led by Zynga, will make billions of dollars in this market with Facebook taking a fee from every transaction conducted on its social network.
  • Social Entertainment will grow in size and significance. In 2012, thousands of movies and hundreds of live events (concerts, sporting events and more) will be available on Facebook for 30 to 100 Facebook Credits each. Today, 89 of the top 100 Facebook Fan pages are entertainment-oriented – music, movies, and sports properties or personalities—and fans always want more content from these pages. In 2012, they’ll be more and more likely to use Credits to access it.
  • Facebook Credits are a global currency. My company, Milyoni, has created a number of live and video on demand offerings on Facebook. Many of them have reached fans from over 30 countries using Facebook Credits as the only currency. This frictionless currency conversion experience is a key factor in the global adoption – no need to worry about exchange rates or fluctuating monetary values. Facebook provides seamless currency conversion for 47 currencies, and climbing.
  • The Facebook Open Graph. Less appreciated, but very important, is the open graph API’s and Facebook’s support of the platform where people, apps and interactions continuously grow. If Facebook’s team does not meet a specific need, there are other innovative start-ups that will leverage the Open Graph to produce the apps and services that both consumers and merchants need to make this ecosystem thrive.

Given this context, spending 40 billion Facebook Credits or $4 billion in virtual and digital goods is achievable. As music, movies and other entertainment content supplements an already growing base of social gamers, this number may end up being on the low side. The bottom line for all businesses with social media ambitions is: create a strategic initiative to leverage Facebook Credits; ignoring it means missing out on the massive market opportunity they represent.

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Brian Kennish Disconnect.meBrian Kennish is a former Google engineer who never intended to found a startup, much less one that helps people protect their online privacy. He had been making his living writing apps that use people's online activities.

But that's exactly what his young company,, does.

About 18 months ago, Kennish had been happily writing advertising apps for Google. But he discovered something that shook him.

"I had been on other side, doing data tracking at Google, and at DoubleClick before that. I helped write some of the original ad servers. I was knee deep," he recounts. "But the thing that alarmed me was that even I had no idea how many third-party places my data was going to online."

In researching a talk on online tracking for a conference called Defcon, he was shocked to learn that in addition to 1,000 top level sites collecting data on users, another 7,000 third parties were tracking users' activities. (Here's a YouTube of his talk.)

And this stuff was starting to be attached to people's real names, too, thanks to Facebook. When the news broke last year that Facebook had been accidentally leaking people's personal data to its application developers, Kennish took action. (Facebook has since plugged that hole).

"I spent three or four hours writing a Chrome browser extension and called it Facebook Disconnect. I uploaded it to the Chrome store and didn't think anything more about it. I had done extensions before. But this one got media attention. Within a few weeks 50,000 people had installed the thing."

That might have been that, but something else was bugging him. He came to work at Google because he loved the culture of always putting users first. Google had beat out other search engines for doing things like not sneaking paid search results in with organic results.

But that was changing.

A couple of weeks after writing Facebook Disconnect, he made the "hard decision to leave," he says. "I felt like the user wasn't being put first anymore. Compromises were being made today that Google in 2003 wouldn't have made. What I would have called ambition turned into something more like greed." was launched in 2010 along with co-founders Austin Chau, fellow Google engineer, and privacy advocate Casey Oppenheim. The company has since raised about $600,000 in seed funding from Highland Capital Partners, and Charles River Ventures, Kennish says.

It has since been extended to block tracking from Google, Twitter, LinkedIn. It's still free as a browser extension in Chrome, Firefox and Safari. Internet Explorer is coming soon. Over 400,000 people are using and when the company hits a million users, it hopes to launch a paid service.

Eventually, Kennish sees a market to be made in not just letting people control their data, but in selling it. This could work something like how people can put ads on their personal blogs today.

The funny thing is, Kennish isn't even one of those privacy alarmists. "I don't care that much about my own privacy," he says. "I care a little bit about this stuff. If you give me a simple tool to protect my privacy and doesn't interfere with how I use web, I'm going to do that."

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An anonymous reader writes "The Facebook Immunity System (FIS) processes and checks 25 billion actions every day, or 650,000 actions every second. The social networking giant's cybersecurity system was developed over a three-year period to keep the service's users safe from spam and cyberattacks. FIS scans every click on Facebook for patterns that could suggest something malicious is spreading across the social network."

Read more of this story at Slashdot.

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Gamasutra recently got a chance to sit down with Facebook's Sean Ryan, the social network giant's director of games partnerships, to find out what the company is doing for developers now that it has a team dedicated to improving the infrastructure and fielding requests.

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