Mike Butcher

Facebook has quietly launched a keyword advertising system to rival Google’s AdSense. Disguised as a simple upgrade to Flyers, its system for selling cheap ads on a self-service basis, the new system charges per click and lets advertisers target by city, gender, age, relationship status, employer, educational level, political views, and keywords. Facebook has the data, generated by its users and the new system will have “detailed reporting”.

Adverts continue to appear beside far-right and racist groups on Facebook despite major advertisers pulling their campaigns following revelations that their brands were appearing alongside such groups.

First Direct, Vodafone, Virgin Media, Halifax, AA, and Prudential have already pulled their ads after finding they were appearing next to the far-right BNP party, following a story broken by New Media Age this week.

But research by tbites has found that adverts continue to appear alongside groups associated with the BNP, including the groups BNP – People Just like you making a difference, Old-Fashioned Fascists and Vote BNP and Save The World.

In each case the advert in question is for Searchanything.co.uk, an affiliate advertising search engine run by Advertising.com International Ltd, the UK subsidiary of US-based Advertising.com Inc, one of the world’s largest interactive advertising network. There is no suggestion that Advertising.com is aware that their adverts are appearing beside these groups. In all likelihood there is an automated script making these ads appear which Facebook appears not to have taken down.

A Comscore survey of global visitors age 15 and older highlights how Facebook has grown by 270% in the last year, which would put it on track to being larger than MySpace by the end of this year. In North America it has racked up 68.4% of the total unique visits to MySpace’s 62.1%. Facebook only opened its APIs on May 24th, 2007.

Comscore said social networking behemoth MySpace.com attracted more than 114 million global visitors age 15 and older in June 2007, representing a 72-percent increase versus year ago. Facebook.com experienced even stronger growth during that same time frame, jumping 270 percent to 52.2 million visitors. Bebo.com (up 172 percent to 18.2 million visitors) and Tagged.com (up 774 percent to 13.2 million visitors) also increased by orders of magnitude.

Bebo.com has a particularly strong grasp on Europe, attracting nearly 63 percent of its visitors from that region, while Orkut is firmly entrenched in Latin America (49 percent) and Asia-Pacific (43 percent). Friendster also attracts a significant proportion of its visitors (89 percent) from the Asia-Pacific region.

“A fundamental aspect of the success of social networking sites is cultural relevance,� said said Bob Ivins, executive vice president of international markets. “Those doing well in certain regions are likely doing an effective job of communicating appropriately with those regions’ specific populations.

Since February, Facebook has doubled its ad rates for sponsored groups from $150,000 to $300,000 in the US, reports ValleyWag which has obtained Facebook’s PowerPoint rate-card deck. Facebook now says it’s the top photo site. The minimum sponsorship remains $50,000, and Facebook claims the click-through rate is 20 times that of banners. This higher fee means the number of homepage links and sponsored stories advertisers get also doubles.

Since February, Facebook has doubled its ad rates for sponsored groups from $150,000 to $300,000 in the US, reports ValleyWag which has obtained Facebook's PowerPoint rate-card deck. Facebook now says it's the top photo site. The minimum sponsorship remains $50,000, and Facebook claims the click-through rate is 20 times that of banners. This higher fee means the number of homepage links and sponsored stories advertisers get also doubles.

King of Shaves, the shaving brand and e-commerce site, is planning to release a Facebook application in what could be the first ever brand marketing use of the social networking site in this manner. Word leaked out via Twitter and a screen shot has been posted to Flickr.

So far brands in the Uk have hung back form developing full-blown applications, preferring instead to use traditional advertising banners on the site.

Dating site Match.com is to launch a mobile web and text service for mobile phones in the UK, US and Canada, expanding out to a further nine countries by the end of the year.

Subscribers will be able to search Match.com from their mobile’s browsers and receive an SMS text message whenever another user sends them a message. According to research firm M:Metrics 3.6 million US mobile users made use of a mobile dating service in May 2007.

An earlier version of Match.com for mobile phones was used by nearly half a million subscribers, but the new service will allow subscribers to tap into Match.com’s database of nearly 15 million registered users.

Here in the UK two startups will be keenly interested in this news. Flirtomatic which has been playing in the SMS flirting game for a while now and newer startup Flirtnik.com.

ValleyWag today runs an interesting insider piece from a startup developing Facebook applications. Until recently FB members could invite all their friends to an app. creating massive viral adoption. Hence why some apps like Top Friends by Slide ended up with millions of users. Now Facebook is limiting app invitations to just 10 per day. That mean anyone creating a new app and trying to go viral has a mountain to climb. This is basically Facebook shooting themselves in the foot. Previously there seemed to be a great ecosystem developing where startups would be able to hook into revenue share deals based on the adoption of their app. Now, the ‘head’ of the apps ‘long tail’ will win because FB has artificially rigged the system in favour of those apps that came out before the “invite all” gate closed. Given that there are even a few UK developers who were banking on the Facebook app platform to create some success, this news makes for some depressing reading. Why is Facebook the new AOL? It’s just another a walled garden baby…

It’s all very well for Facebook to be smug about it’s new found success but a new report suggests that the latest vogue for social networking is built on the same shaky ground as any other site on the Net which is but a click away.

In particular, MySpace users are chronically unfaithful, according to Parks Associates‘ “Web 2.0 & the New Net,” a new report that focuses on the social networking market. Nearly 40% percent of MySpace users keep profiles on other social networking sites such as Friendster and Facebook. Loyalty among the smaller social networking sites is even lower, with more than 50% of all users actively maintaining multiple profiles.

The report also found that nearly half of all social networkers regularly use more than one site; one in six use three or more. The end result is mish-mash of sites, blogs and profiles tied together by links, widgets, and the users themselves. “MySpace is a growing ecosystem and one that ironically now extends beyond MySpace itself,” said John Barrett, the lead author of the report, “Web 2.0 & the New Net.”

Indeed. Some might say it’s either an “ecosystem” or it’s part of a diaspora to other networks. The jury is out.

Although Parks calls this trend a “fertile ground for new social networking sites and application providers”, the reality is that Facebook is getting all the media airtime at the moment, and one wonders how long MySpace can continue with its tendency towards a walled garden (promoted by aging News Corp. executives) strategy in the wake of such extreme competition.

As hinted at back in February, Last.fm has been trawling around looking for a buyer and today it found its harbour in the form of a US media giant. The ’social music’ site has been bought by CBS Corporation for $280m (£140m). This is less than the earlier rumour, but still the largest-ever buyout of a UK-based “Web 2.0″ site.

The site was founded in the UK five years ago (you may have heard the stories about the founders sleeping on the office roof in a tent when they couldn’t afford accommodation). It now has more than 15 million active users. Users basically connect with other listeners with similar music tastes, build their own personal radio stations and watch music video-clips.

Although the announcement today says that Last.fm’s managing team (founders Felix Miller, Martin Stiksel and Richard Jones) will stay and the site will maintain its own separate identity, I can’t see this staying this way forever, now that it’s part of CBS, which will probably ditch the European sensibility of the service.

Stiksel reportedly said: “This move will really support us to get every track ever recorded and every music video ever made onto Last.fm.” He also says LastFM will “put the users in charge. CBS gets this.” Time will tell, time will tell.

Meanwhile for the less cynical among you, here is co-founder Richard Jones on the company blog today:

“The team here have spent a lot of time this year discussing what the future should hold for Last.fm, and while contemplating raising some additional venture capital we were approached by CBS. As you can imagine, we have been approached numerous times in the past few years from all the usual suspects regarding acquisitions and so on; CBS are one of the few companies who needed no explanation of what we are doing, and we were impressed at how progressive their plans are. This deal with CBS gives us a chance to really make Last.fm shine, and gives us more flexibility than other funding options would for doing all the crazy stuff we’re had scribbled on whiteboards for years.”

So why did CBS buy it? CBS radio is the largest radio group in the United States, with 179 stations in the top 50 markets, but traditional media growth is stagnating and all the action – as everyone knows, especially when it comes to music and the youth market – is all online. The purchase thus adds to an advertising portfolio that already includes conventional radio, broadcast and cable TV and outdoor services.

CBS now has a strategy of reaching as big an audience as possible, not on creating content. It sounds like they plan to rely more on the users and viewers themselves to do that. In fact, CBS CEO Leslie Moonves says Last.fm’s community play us “central to CBS”. In truth CBS is coming late to the now established idea that music is a natural community builder and therefore a very ’sticky’ eyeball attractor. As an anonymous CBS executive has already said: “We see it as a chance to get new eyeballs — or in this case earlobes.”

As for the price, it looks easily affordable by US standards. Consider some earlier deals: News Corp bought MySpace for $580m (£290m) in 2005. Google paid $165bn (£82bn) YouTube in 2006. But according to the LA Times, the final price for closely held Last.fm could rise substantially if performance targets are met. Last.fm got its first round of funding last May from Index Ventures.

There may be a problem for LastFM in that in the US the recent ruling by the Copyright Royalty Board massively increases the royalties Internet broadcasters have to pay for streaming digital songs. This has already hit Pandora’s plans to expand outside the US.

However advertising may offer more hope. Although LastFM recommends music for purchase, sales are not in fact a big revenue earner. Instead CBS will probably create sponsored channels, garnering bigger corporate deals with its existing sales contacts.

Expect also CBS radio stattions to start to appear on LastFM. Country AND Western anyone?