Is independent Internet possible?

By name itself, Internet in network of networks.. how can you make it independent? I guess, you can only do it by creating island and controlling gateways for inbound and outbound traffic from your country to another if there is any such well defined things..

I totally understand President Dilma's anger on US. Is she also angry at China (her biggest buyer of raw materials) and Russia and many other countries/nations who do it all the time? Instead of getting angry at US, she should focus on more emphasis on technological build up in Brazil... then she can launch her counter offensive against any country she would like to as most of the other countries do it to her country..

Build infrastructure in your country so Google/facebook like companies are created in your own country rather than relying on silicon valley for all such critical to time passing applications and infrastructures.. Attack at fundamentals.. don't try to dress up the fact that your country let go the golden time of minting money on your natural resources without fixing core issues like infrastructure and education.. Now that you are facing the anemic growth music again, you are creating issues out of almost non-sense issues..

Work on fundamentals.. rest nature will take care of you..

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Angered over espionage, Brazilian President Dilma Rousseff is postponing a visit to Washington.


Brazil seeks online independence

President angered over revelations of U.S. spying

By Bradley Brooks and Frank Bajak

Associated Press

RIO DE JANEIRO — Brazil plans to divorce itself from the U.S.-centric Internet over Washington’s widespread online spying, a move that many experts fear will be a potentially dangerous first step toward fracturing a global network built with minimal interference by governments.

President Dilma Rousseff ordered a series of measures aimed at greater Brazilian online independence and security following revelations that the U.S. National Security Agency intercepted her communications, hacked into the state-owned Petrobras oil company’s network and spied on Brazilians who entrusted their personal data to U.S. tech companies such as Facebook and Google.

The leader is so angered by the espionage that on Tuesday she postponed next month’s scheduled trip to Washington.

Internet security and policy experts say the Brazilian government’s reaction to information leaked by former NSA contractor Edward Snowden is understandable, but warn it could set the Internet on a course of Balkanization.“The global backlash is only beginning and will get far more severe in coming months,” said Sascha Meinrath of the Washington-based New America Foundation think tank. “This notion of national privacy sovereignty is going to be an increasingly salient issue around the globe.”

While Brazil isn’t proposing to bar its citizens from U.S.-based Web services, it wants their data to be stored locally as the nation assumes greater control over Brazilians’ Internet use to protect them from NSA snooping.

The danger of mandating that kind of geographic isolation, Meinrath said, is that it could render inoperable popular software applications and services and endanger the Internet’s open, interconnected structure.

The effort by Latin America’s biggest economy to digitally isolate itself from U.S. spying not only could be costly and difficult, it could encourage repressive governments to seek greater technical control over the Internet to crush free expression at home, experts say.

In December, countries advocating greater “cyber-sovereignty” pushed for such control at an International Telecommunications Union meeting in Dubai, with Western democracies led by the United States and the European Union in opposition.

U.S. digital security expert Bruce Schneier says that while Brazil’s response is a rational reaction to NSA spying, it is likely to embolden “some of the worst countries out there to seek more control over their citizens’ Internet. That’s Russia, China, Iran and Syria.”

Brazil is now pushing more aggressively than any other nation to end U.S. commercial hegemony on the Internet. More than 80 percent of online search, for example, is controlled by U.S.-based companies.

Most of Brazil’s global Internet traffic passes through the United States, so Rousseff’s government plans to lay underwater fiber optic cable directly to Europe and also link to all South American nations to create what it hopes will be a network free of U.S. eavesdropping.

This highlights problem with India.. Social Media is just scapegoat

I think this clearly shows that India need to work more on it's infrastructure and education and awareness.. It is easy to blame on something like Facebook, Twitter or Google.. These are superb tools and like everything can be used or mis-used. We know for sure that all these tools have been greatly used in Arab-spring. There most of the population really used it for their advantage.

Now here in India, we are seeing reverse. These graphics and messages floating are creating reverse impact.. they are meant to be creating hatred and anger among different sects of the population. However, these are just inert messages or images.. Interpretation of these messages and images is up to human brain. How they interpret depends upon the environment, education, social values and trust system among fellow human and rest of the system. If the trust level is so low, then any image or message can inflame any kind of riot.. it doesn't need these social media sites.. it is not that these kind of things didn't happened earlier.. people used paper or print media to do that in past.. did we stop using paper or print media?

This is totally ridiculous.. Government or rather than that, population of India needs to first introspect and find out root cause of these kind of things. Root cause is lack of education, lack of trust on government or police for that matter.. off course rampant corruption at all levels tops it up... Going after these social media sites is simple distraction from core fundamental issue..


Social sites squeezed in India

Leaders pressure Web companies to restrict hate speech

By Vikas Bajaj

New York Times

MUMBAI, India — The Indian government’s efforts to stem a weeklong panic among some ethnic minorities has again put it at odds with Internet companies like Google, Facebook and Twitter.

Officials in New Delhi, who have had disagreements with the companies over restrictions on free speech, say the sites are not responding quickly enough to their requests to delete and trace the origins of doctored photos and incendiary posts aimed at people from northeastern India. After receiving threats online and on their phones, tens of thousands of students and migrants from the northeast have left cities like Bangalore, Pune and Chennai in the last week.

The government has blocked 245 Web pages since Friday, but still many sites are said to contain fabricated images of violence against Muslims in the northeast and in neighboring Myanmar meant to incite Muslims in cities such as Bangalore and Mumbai to attack people from the northeast. India also restricted cellphone users to five text messages a day each for 15 days in an effort to limit the spread of rumors.

Officials from Google and industry associations said they were cooperating fully with the authorities. Some industry executives and analysts added that some requests had not been heeded because they were overly broad or violated internal policies and the rights of users.

The government, used to exerting significant control over media like newspapers, films and television, has in recent months been frustrated in its effort to extend similar and greater regulations to websites, most of which are based in the United States. Late last year, an Indian minister tried to get social media sites to prescreen content created by their users before it was posted. The companies refused and the attempt failed under withering public criticism.

While just 100 million of India’s 1.2 billion people use the Internet regularly, the numbers are growing fast among people younger than 25, who make up about half the country’s population.

Sunil Abraham, an analyst who has closely followed India’s battles with Internet companies, said last week’s effort to tackle hate speech was justified but poorly managed. He said the first directive from the government was impractically broad, asking all Internet “intermediaries” — a category that includes small cybercafes, Internet service providers and companies like Google and Facebook — to disable all content that was “inflammatory, hateful and inciting violence.”

Ministers have blamed groups in Pakistan, a neighbor with which India has tense relations, for creating and uploading many of the hateful pages and doctored images.

Is this the only way left for Facebook to make money?

Initially, I was kind of surprised to see this news. but then later on realized.. what else to expect from FB. To prep up their stock prices they can resort to anything. Bingo is just beginning.. This is where I feel Google as much better company.. at least for now.. there is no pressure from Google founders to really make stock go super north.. where as we can see here in Facebook, that they will do anything and everything to make stock go up.

I am fine with it.. there is nothing wrong legally or for that morally.. who we are to decide what is moral and what is not.. It is just that.. this thing is not aligned with my values. I personally am great fan of facebook as platform and had much higher hopes of its usage and applications.. may be I was wrong.. may be not.. time will tell..

Facebook debuts bingo game played for real cash in U.K.

By Salvador Rodriguez

Los Angeles Times

When it comes to the U.K., most people are getting into the Olympic Games, but not Facebook. It’s getting into a different type of gaming in the U.K. — gambling to be exact. The 955 million-member social network began allowing users in the U.K. to play a new bingo game using real money.

The game, called Bingo & Slots Friendzy, lets users 18 and older ditch Facebook Credits and play with their real money while Facebook takes in 30 percent of the money collected by the app, as it does with all other apps.

“Gambling is very popular and well regulated in the U.K. ... For millions of bingo users it’s already a social experience so it makes sense for us to offer that as well,” said Julien Codorniou, Facebook’s head of gaming for Europe, Middle East and Africa, according to the Financial Times.

The decision to allow this type of gaming in the U.K., where gambling is more accepted than in the U.S., is seen as a test by Facebook to determine if it may want to bring the practice stateside.

“Facebook is a place that allows people to connect and share,” a Facebook spokesperson told TechCrunch. “Real money gaming is a popular and well-regulated activity in the U.K. and we are allowing a partner to offer their games to adult users on the Facebook platform in a safe and controlled manner.”

Business Insider says, quoting an “industry insider,” online gambling would turn Facebook into a $100 billion-revenue company. That number seems a bit high, but Facebook likely would stand to see its revenue grow drastically.

Currently, its Facebook Credits revenue stream has been growing at a snail’s pace, growing by only $6 million between its last two quarters. The infusion of gambling could change that.

Interesting innovation.. but is it really that big a problem to be solved?

People think a lot and come up with innovation.. This is not a problem for me.. neither I got so many baby pics nor I am bored with them.. Yet!!! But in case you are.. feel free to use. for curiosity sake, I would love to try it out but nothing more than that.

However, I would like to extend this idea further.. I would use this type of app to update my feeds and pictures of friends I don't like to see any more.. moreover, it should further go into my albums and posts and clean images which contains such friends or references.. essentially data cleansing type of app/code but with image processing. In case any graphic developers are listening to it.. go ahead.. I won't sue you for patent rights like Apple and Samsung are wasting their time..

Cheers!!!

Taking babies out of the Facebook picture

Tired of all those too-cute photographs?

Website replaces them with cats, manatees

By Deborah Netburn

Los Angeles Times

Tired of looking at baby pictures on Facebook? Now you can fight back. A new service called Unbaby.me is designed to automatically replace all the baby photos on your Facebook feed with pictures of something more palatable — like cats, or manatees, or album covers.

Unbaby.me launched last week, and its website has already received 41,000 Facebook likes. That’s a lot of people who were really sick of seeing babies on Facebook. The photo-replacing plug-in is the brainchild of three New Yorkers — Yvonne Cheng, Chris Baker and Pete Marquis — who work together at the advertising agency BBDO. They are, unsurprisingly, in their late 20s and early 30s.

“We were having drinks one night after work and were joking around about how Facebook is just lousy with babies, and wouldn’t it be funny if you could replace all those photos with cats,” Cheng said.

The friends, who all work in interactive advertising, contacted a developer to help them make their joke a reality. Cheng said it took about one month from the initial conversation to the launch of Unbaby.me.

The plug-in can be downloaded from the Chrome Web store. It’s easy to install — and, if you feel guilty, to uninstall.

Once it is running, it will scan your Facebook feed for key words such as “cute,” “adorable” and “first birthday” — trigger words that indicate a baby photo may be attached. You can also add your own key words. Then it replaces the offending baby photo with a different photo from an RSS feed of pictures. The current default feed is cat photos.
Pictures of babies that have no captions will not be replaced, though, so if you are looking for a complete baby-photo-eradicating solution, this may not be it.

Cheng insists that not wanting to see pictures of babies on Facebook does not correlate to not liking babies at all.

“Personally, I don’t hate babies. I love babies. But I do get tired of looking at babies,” she said. “I think we just addressed the fact that people use social networks for different reasons, and I guess because of the age we are, the majority of people we knew were just using to post pictures of their babies.”

I think investors are over-reacting on FB stock

I think investors are way too much over reacting on this. This concept of watching quarterly results every quarter will eventually hurt them only.. at least in this case.. or may be benefit them by letting them buy FB dirt cheap now..

You have to understand one thing, Facebook controls biggest and most significant and most strategic information about consumers. There is no denying about it. Even Google or any other company doesn't have that detailed and accurate information about customers. FB just needs to figure out how and where to use this power properly without annoying there very customer as well sourcing base of this immense wealth. Nobody can do better or more accurate advertising than FB.  However, they have not been able to do it properly or I should say, show it off to investors. FB's privacy policies are always in news.. Let us see what they come up with now.. Pressure is high, my hope is that they won't try to squeeze their user base with something totally ridiculous policy change or something like that.

Having said that, I don't know the fact that how much of it is already analysts have taken into account. In my view, FB pricing was based on this fact only, but subsequently they were not able to keep this idea in brains of analysts and investors.

All this Zynga fallout etc.. is non-sense. It was a very small piece of the pie for FB any how. In long term, this Zynga shinga is not going to matter for FB. This will definitely matter in Quarter to Quarter earnings and that is one reason, I really don't like them and definitely won't react much to them. They do indicate your operational health but that is very very tactical and unless totally botched, they are not going to impact long term growth of the company.

Final disclaimer, I don't have FB stock neither do I have any plans to acquire or short them in any short/medium term.

COMPANY HURT BY EARNINGS, ZYNGA FALLOUT

Investors pummel Facebook

Social media giant’s bad week ends with 12 percent drop in stock

By Brandon Bailey

bbailey@mercurynews.com 

MENLO PARK — Facebook continued taking a pounding on Wall Street Friday, as its stock price hit a new low, wiping out billions in shareholder value after a week of bad news for the social networking giant.

Facebook’s market value is now close to half the record $104 billion valuation that the company set when it began selling shares in May. Other social media companies are also struggling, despite early excitement over what was expected to be a new “hot” industry. Zynga, Pandora and Groupon are all trading far below their initial public offering price.

Shares in Facebook fell 12 percent on Friday, closing at $23.70, after heavy trading in the wake of an earnings report Thursday that showed the company’s revenue growth is slowing. While some Wall Street analysts stood by their earlier conclusions that Facebook has significant earnings potential, they said investors are worried about rising operating costs and the company’s unwillingness to predict future revenue.

“We acknowledge that it is difficult to determine the true value of Facebook,” Wedbush Securities analyst Michael Pachter wrote in a note to investors Friday. Although he said he expects Facebook’s business to grow, Pachter said this week’s earnings report, coming after the company’s “messy” stock market debut in May, “will likely keep some investors away from the stock.” 

Adding to investor worries is the bombshell dropped Wednesday by Zynga, the online gaming company whose business is closely tied to Facebook. Zynga’s stock fell nearly 40 percent over two days, closing Friday at $3.09, after the company reported earnings far short of estimates and lowered its forecast for the year. 

Facebook executives did not speak directly about Zynga’s troubles during a conference call Thursday, but they reported that Facebook saw virtually no growth over the past three quarters in its revenue from fees for processing online payments. 

Zynga’s games are a major source of those Facebook fees, although Facebook recently introduced a new online “App Center” that’s expected to help diversify its revenue base by helping users find games and apps from other developers besides Zynga. 

Analysts generally gave good marks to Facebook CEO Mark Zuckerberg for his presentation during the company’s conference call Thursday. The 29-year-old company co-founder answered questions and outlined the company’s strategy for increasing revenue by developing new forms of mobile advertising and by serving as a platform for other companies to base a variety of online businesses. But as Facebook seeks to build its own business, the company is increasing its spending on hiring, marketing, research and facilities. That drove the company’s operating margin, a measure of profitability, down to 43 percent from 53 percent a year ago. 

Chief Financial Officer David Ebersman reported the company has grown from 3,200 employees to nearly 4,000 in the past six months. “At this early stage of our growth,” he told analysts, the company is focused on “investment” to expand rather than on managing its costs. 

Ebersman declined to give a revenue forecast for future quarters, but he warned analysts that spending will grow even more in the second half of 2012. That worries many investors, according to Macquarie Securities analyst Ben Schachter, who blamed “a general unease about revenue visibility” among reasons for the plunging stock price. 

Also in the back of shareholders’ minds, Schachter said in a research note, is the looming expiration of a regulatory “lockup period” that barred employees and early investors from selling stock. If enough of those shares go on the market next month, that could drive the price down further. 

The value of Facebook shares has fallen 38 percent since the company’s initial public offering, when the stock was priced at $38. Estimates of the company’s total market value vary according to the number of shares used to calculate the value. 

As the company’s biggest shareholder, Zuckerberg saw the value of his holdings drop more than $2.8 billion in the past two days, although his 503.6 million shares are still worth nearly $12 billion. 

Analysts who are bullish about Facebook said its falling stock price represents a buying opportunity for new investors. Needham’s Laura Martin argued in a report Friday that Facebook has enormous potential to increase its revenue from advertising and e-commerce — in part because the social network is heavily used by women, who Martin said have more influence over consumer purchasing than men. 

But analyst Trip Chowdhry of Global Equities Research, who has consistently criticized Facebook for setting its IPO price too high, advised investors to “remain on the sidelines for now.” 

Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/ BrandonBailey. 

Seriously.. people are still playing Farmville???

I can't understand rationale for playing games like Farmville... Nashville et all.. may be it is just me.. an old timer..

On top of that, why will anyone buy things in that dumb game.. really? I can't understand business model.. I could understand why and how facebook plans to make money.. they have bloody my entire history/geography.. but Farmvilllllleeeee... nah.. I don't belong there.. neither could I understand why will people spend money.. on top wasting time.. or whatever..

Mobile games outperform Facebook, Zynga CEO says

But S.F. company makes 92% of sales on social network

By Gerry Shih

Reuters

SAN FRANCISCO — Some of Zynga’s most sophisticated games, including “FarmVille,” generate greater revenue per user on smartphones than on Facebook’s Web-based platform, the company’s CEO, Mark Pincus, said Wednesday.

Some of Zynga’s deeperengagement games — titles like “FarmVille” that falls into what the company calls its “invest-and-express” category — successfully generate revenues from smartphone users because of their mobile format as well as gamers’ demographics, Pincus said.

“On mobile, they actually monetize higher than on the Web,” Pincus said.

The comments came at a technology industry conference hosted by Fortune Magazine, where Pincus fielded questions about San Francisco-based Zynga’s sagging stock price and its closely watched mobile strategy. Zynga shares gained 3 cents, or 0.7 percent, to close at $4.61 Wednesday. The shares are down by more than 50 percent since going public at $10 a share in December.

The company, which makes 92 percent of its income from games on Facebook, has made a major push in recent months to expand its mobile offerings and lessen its dependence on the world’s largest social network.

Pincus’s comments provide a point of optimism for the company — and a consumer Internet industry that has broadly struggled to squeeze revenues out of mobile users. Many companies serve ads to make money, but the smartphone screen offers a limited canvas to display ads.

The smartphone format, however, benefits games like “FarmVille,” because mobile users are more inclined to make in-game purchases, Pincus suggested.

“The friction around spending — the behavioral friction is much, much lower on mobile,” he said.

He also cited demographics as playing a role in the performance on mobile. “Smartphones are more concentrated in North America and Western Europe,” he said. “Facebook is more evenly dispersed.”

But he acknowledged that some of Zynga’s most popular mobile games, casual titles like “Draw Something” and “Words with Friends,” do not “monetize as well as our high-engagement games.”

Pincus spent more than $180 million earlier this year to acquire the game studio behind “Draw Something,” which began to wane in popularity after the deal.

When Fortune Magazine writer Adam Lashinsky asked Pincus if he rejected the notion that the deal proved ill-advised in hindsight, Pincus demurred.

“It’s too early to call it after one quarter,” Pincus said.

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KEVORK DJANSEZIAN/GETTY IMAGES

Zynga CEO Mark Pincus says it’s too soon to say if the $180 million deal for the “Draw Something” studio was worth it.

This is Valley.. The Silicon Valley!!

Where fortune changes frequently.. and everyone can't be Mr. Zuckerburg.. I am sure Kevin will still be fine.. I am sure he is already one of the best consultant for Google Ventures.. He can hopefully see failures or advise his clients on right time to exit.. He could have made couple of hundred's of million dollars.. but at that time he probably was looking for couple of billions..

Cheers!!

WEB 2.OH NO

Once hot Digg sells for paltry $500,000

Firm saw fortunes fall as other social sites rose

By Patrick May and Peter Delevett

Staff writers

In a remarkable Silicon Valley rags-to-riches-to-rags saga, the onetime social media darling Digg was sold Thursday for a reported $500,000, an embarrassingly paltry sum given that Internet rock star Kevin Rose’s company had raised a total of $45 million in venture funding and was once valued at more than four times that amount.

Digg’s fall was spectacular in both its steep pitch and cultural resonance, serving up a sobering reminder that a valley superstar can turn into a shadow of itself in a relative heartbeat. The collapse is even more startling because Digg was center-stage as the era of social media was launched. Digg, a social news site that let people “vote” online stories up or down and share them with others, was once called “the new New York Times.” 

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Founded: 2004 by 27-year-old Kevin Rose, above

Former darling: Google reportedly considered offering $200 million for firm Sold: For $500,000 to Betaworks 

The sale to New York tech incubator Betaworks came after the majority of Digg’s engineering staff left in May for Social Code, a subsidiary of The Washington Post Co. 

“Over the last few months, we’ve considered many options of where Digg could go, and frankly many of them could not live up to the reason Digg was invented in the first place — to discover the best stuff on the Web,” Digg CEO Matt Williams said in a blog post. “We wanted to find a way to take Digg back to its startup roots.” 

Digg’s website will continue to exist, and Betaworks will soon launch a new “cloud-based version of Digg” to complement its current offerings, Williams wrote. 

Launched in 2004 by then 27-year-old Rose, San Francisco-based Digg rose to prominence as an aggregator of online news and other content, becoming at one point one of the more highly-trafficked stops on the Internet. The site let users endorse — or “Digg” — links, an early precursor to how Facebook and Twitter help spread “viral” content today. 

The company raised a total of $45 million in funding from established venture capital firms like Greylock Partners. At one point, Google was reportedly considering buying Digg for $200 million. And in 2006, Rose starred on a widely circulated BusinessWeek magazine cover, flashing his thumbs next to the headline: “How This Kid Made $60 Million In 18 Months.” Digg struggled over the past few years, thanks to turnover among top management, user-generated problems such as some heavy users dominating the site with their submissions and growing competition from newer and flashier websites like Twitter. In September 2010, Williams took over as CEO, ending Rose’s troubled tenure as interim chief executive as the company grappled with technical snafus and disgruntled users. Last March, Rose went to work at Google and later became a venture partner at Google Ventures. Rose could not be reached for comment Thursday. But late Thursday on the Digg website, he praised Betaworks founder John Borthwick, saying, “John understands the real-time nature of the Web and how to capture and surface trends as they occur.” Saluting Borthwick’s work with several other startups, Rose said, “I can’t wait to see what he does with Digg.” 

The 2006 Business-Week story documented the front end of the fateful arc of Digg from initial redhot success to looming failure. “Digg is emblematic of the ethos of Web 2.0, new consumer and media sites revolving around social networking and do-it-yourself services,” wrote authors Sarah Lacy and Jessi Hempel. “Others include YouTube, which serves up some 100 million requested videos a day, rivaling the audience of NBC. Then there’s Facebook, where the college crowd practically lives. 

“Some even refer to Digg as the new New York Times,” they wrote. “News sites are discovering they can benefit too: Get a story on Digg’s front page, and in comes a flood of traffic from people clicking on the link to read the story on your site. So far, Digg is breaking even on an estimated $3 million annually in revenues. Nonetheless, people in the know say Digg is easily worth $200 million.” 

Adam Kalsey, a blogger and serial tech entrepreneur in Sacramento, was among those tweeting scoldingly Thursday about Digg’s demise. He chided Rose for turning down Google’s reported mega-offer and said the company’s fate is a warning for other social media startups. 

“You don’t create a community and try to control it,” Kalsey said in an interview. “They made a bunch of changes, there was a user revolt, and the base dropped off.” 

Digg’s monthly traffic, which topped 14 million unique visits in January 2010, had plunged to fewer than 9 million a few months later after Rose forced through unpopular changes to the site, according to data at the time from comScore Media Metrix. 

The reported sale price — less than the median price of a Silicon Valley house — doubtless comes as an embarrassment to Digg’s backers, who include topflight investors such as Ron Conway and Marc Andreessen. But Kalsey quipped, “You’ve got to figure at this point, any VC was just looking for a way out. Investors would rather have a dud than a zombie.” 

Contact Patrick May at 408-920-5689 or follow him at Twitter.com/ patmaymerc. 




Digg’s phenomenal early success landed founder Kevin Rose on the cover of Business Week in 2006. 

Microsoft going Social..

Seems okay step to me. Microsoft seems to be doing okay on strategy and execution. Interesting thing will be on how well they assimilate these different components in their core office and share point suits.

Enterprise Social Networking is a big area and in my view still very much under developed. All these Enterprise Collaboration Management (ECM) vendors are trying their best to copy and mimic Facebook while navigating with myriad rules and complexities of enterprise relationships within and outside of company and partners. They all seems to be okay but still need more ease of use and more importantly transfer of ownership of content and pages from one individual to another as people move on to different places and roles. I think rationalization of this without any complex administration is going to be key for success of any of these ECMs. Rest all things can be easily copied from FB.

Biggest threat to these guys is again their biggest gorilla Facebook.. Right now, FB is on fringe of ECM. It will be interesting when and if ever they get into ECM.

Lastly, good job Yammer guys.. Keep on bringing more money and do proud to Silicon Valley!!!

Cheers!!




Yammer CEO David Sacks, left, and Microsoft CEO Steve Ballmer shake hands after officially announcing Monday that Microsoft will acquire Yammer for $1.2 billion cash.

MICROSOFT’S $1.2 BILLION ACQUISITION

Yammer deal lifts eyebrows

Analyst says software giant’s foray into social realm too late; others say it aids other products

By Peter Delevett

pdelevett@mercurynews.com 

Confirming rumors that had been swirling for weeks, Microsoft on Monday said it will buy San Francisco social-networking startup Yammer for $1.2 billion in cash.

Yammer, founded in 2008, lets business customers set up private, Facebook-style networks among employees and clients. It boasts 5 million users from such companies as Deloitte, 7-Eleven and Ford, CEO David Sacks said Monday.“We had a vision for how social networking could fundamentally change the way people work,” said Sacks, the former chief operating officer of PayPal. He will continue to lead Yammer as it joins Microsoft’s Office division, which also includes SharePoint and Skype. Sacks said linking up with such “household name” business applications will help Yammer grow even more rapidly.

But Microsoft is still lagging rivals such as Salesforce and Oracle, which already have made big-money moves into the social-networking realm. 

San Francisco-based Salesforce offers a socialnetworking tool called Chatter and this month bought cloud-based socialmedia company Buddy Media for nearly $700 million. Redwood City’s Oracle recently snapped up two software companies in the social-media sector, Vitrue and Collective Intellect, as part of its push into cloud computing. 

“Microsoft is too late to the social party,” Global Equities Research analyst Trip Chowdhry wrote in an email Monday. “Imitation is not a strategy.” 

Still, Microsoft CEO Steve Ballmer on Monday said he was intrigued to learn more about Yammer’s “freemium” sales model, which relies on individual users inside a company to adopt the product at no cost, then gives that company’s IT department an option to pay for more advanced security and support after a critical mass of users has developed. 

“They were pretty unique in the viral adoption model,” Ballmer said of Yammer. 

Constellation Research co-founder Ray Wang said Monday that Yammer’s ability to convert about 19 percent of its free users to paid customers is at least double the industry average. He generally praised the deal, while adding that Microsoft’s own failure to develop new products has forced it to become more reliant on acquisitions. 

Tony Zingale — CEO of Yammer rival Jive Software, which went public last year — predicted that Yammer will struggle to remain innovative as part of the Redmond, Wash., behemoth. “At Microsoft, ‘move really fast’ is not in their vocabulary,” he quipped. 

Zingale said Palo Altobased Jive is already making plans to woo away Yammer customers, and he predicted Salesforce will do the same. 

On the other hand, Zingale said, the deal “once and for all validates that the social enterprise software space is here to stay. When somebody like Microsoft says they’ve got to have it, I think we’re heading for a very vibrant market.” 

Karl Keirstead, an analyst with BMO Capital Markets who follows Jive’s stock, agreed with that assessment, noting that Jive’s shares have risen about 18 percent in the two weeks since rumors of Microsoft’s interest in Yammer surfaced. (Jive closed trading Monday slightly down at $19.75, while Microsoft finished at $29.86 — a decline of 2.7 percent.) Keirstead — whose firm helped underwrite Jive’s December IPO — estimated Yammer’s yearly revenue at about $25 million to $30 million, which would mean Microsoft paid a multiple of 50 times revenue for the company. Yammer had reportedly amassed $142 million in venture capital from Draper Fisher Jurvetson, PayPal co-founder Peter Thiel and former Facebook vice president Chamath Palihapitiya , among others. 

With Jive recently trading at 10 to 12 times revenue, and with hefty numbers being shelled out for Yammer and Buddy Media, Keirstead predicted it won’t be long until another big suitor such as SAP makes a bid for Jive. “It just feels like there’s an M&A frenzy around anything that says social enterprise,” he said. 

Microsoft did not say when it expects the deal to close. 

While Ballmer predicted his army of sales reps could boost the number of Yammer customers who agree to pay for the product, Keirstead thinks the merger might ultimately be less about bolstering Yammer as a stand-alone product and more about integrating its features into Share-Point. The cloud-based enterprise offering includes email, file sharing and the Microsoft Office suite of applications. 

“Microsoft, in an effort to protect its SharePoint franchise, needs to make it more social and do so fast,” Keirstead said. The $1.2 billion layout for a company with modest revenues, he added, is “a little bit of a defensive move.” 

Staff writer Jeremy C. 

Owens contributed to this report. Contact Peter Delevett at 408-271-3638. 

Facebook Phone with fOS or Fboid?

Seems that we might have new competitor for iPhone and our beloved Samsung and other Android phones.. There could be fOS or FABoid or  something like that coming soon. or Blackberries or blueberries could be become Face-berries or book-berries :-)  or even Nokia could be Fokia.. Just kidding..

 I am in lighter mood today so all this crap.. But there is some reality to this news and it does make sense from one angle...

FB is getting hit hard by their mobile strategy where they are felling little lonely.. lot or most of the users access their FB account thru their smart phones which are currently being controlled by apples, oranges, berries and goggles of the world.. Poor FB is left with free service on them without any revenue gain.. They can hardly show anything to users on these fruit ninja phones..

So here they come back.. armed with 16 Billion dollars in their bank account.. they go for investment cum shopping spree.. Off course, their senior leadership has to take bigger risks and make better futuristic strategies.. You never know.. they may hit jackpot or just blow off all the IPO money and relegate FB to Yahoo status.. problem is, that if they don't act now and act totally differently, they will be Yahoo in next 5-7 years any how (or may be faster)..

Some how I don't buy into all this crap of mobile issue.. I would rather work on making it more easy to use on mobile and even on tablets so users can more easily access and enjoy their tool. Also, they need to come up with something like Google's ad-sense platform where even user benefits if user creates content and they try to sell users targeted adds based on the content users have created.

But for now, If I could, I would be short on FB stock.. I may be wrong (many times I have been wrong, otherwise, I would have been writing blogs full time instead working for someone else)..

Enjoy the news or I should say rumor..  you never know it may change the face of the world again....

http://www.siliconvalley.com/news/ci_20728939/facebook-hoping-release-smartphone-by-next-year

HIGH-TECH CROSSOVER

Facebook may revive smartphone

Social network has hired former iPhone engineers as it explores future in hardware, sources say

By Nick Bilton

New York Times

Can a software company build its own smartphone? We may well find out soon.

In the past week, Google completed its acquisition of the hardware maker Motorola Mobility for $12.5 billion, which could lead to the search giant making its own smartphone. And another software titan might be getting into the hardware game as well: Facebook.

Employees of Facebook and several engineers who have been sought out by recruiters there, as well as people briefed on Facebook’s plans, say the company hopes to release its own smartphone by next year. These people spoke only on condition of anonymity for fear of jeopardizing their employment or relationships with Facebook.

The company has already hired more than half a dozen former Apple software and hardware engineers who worked on the iPhone, and one who worked on the iPad, the employees and those briefed on the plans said.

This would be Facebook’s third effort at building a smartphone, said one person briefed on the plans and one who was recruited. In 2010, the blog TechCrunch reported that Facebook was working on a smartphone. The project crumbled after the company realized the difficulties involved, according to people who had worked on it. The website AllThingsD reported last year that Facebook and HTC had entered a partnership to create a smartphone, code-named “Buffy,” which is still in the works. 

Now the company has been going deeper into the process, by expanding the group working on “Buffy,” and exploring other smartphone projects, too, creating a team of seasoned hardware engineers who have built the devices before. 

Meeting with chief 

One engineer who formerly worked at Apple and worked on the iPhone said he met with Mark Zuckerberg, Facebook’s co-founder and chief executive, who then peppered him with questions about the inner workings of smartphones. It did not sound like idle intellectual curiosity, the engineer said; Zuckerberg asked about intricate details, including the types of chips used, he said. Another former Apple hardware engineer was recruited by a Facebook executive and was told about the company’s hardware explorations. When asked Friday, Facebook did not deny or confirm that a project to build a smartphone existed, but pointed to a previous statement it gave to AllThingsD last year that said in part, “We’re working across the entire mobile industry; with operators, hardware manufacturers, OS providers and application developers.” 

For Facebook, the motivation is clear: As a newly public company, it must find new sources of revenue, and it fears being left behind in mobile, one of the most promising areas for growth. “Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms,” a Facebook employee said. 

Facebook is going to great lengths to keep the phone project a secret, specifically not posting job listings on the company’s job website, but instead going door-to-door to find the right talent for the project. 

But can a company that is wired as a social network learn how to build hardware? Mixing the cultures of hardware and software designers is akin to mixing oil and water. With the rare exception of Apple, other phone makers aren’t very good at this. 

The biggest names in consumer electronics have struggled with phone hardware. Hewlett-Packard tried and failed. So did Dell. Sony has never done very well making phones. 

“Building isn’t something you can just jump into,” explained Hugo Fiennes, a former Apple hardware manager for the first four iPhones who has since left Apple and is starting a new hardware company, Electric Imp. “You change the smallest thing on a smartphone and you can completely change how all the antennas work. You don’t learn this unless you’ve been doing it for a while.” 

He added, “Going into the phone business is incredibly complex.” 

Facebook also faces hurdles, often of its own making, on mobile. Twitter, for example, is fully integrated into the Apple iPhone and allows people to seamlessly send Twitter messages with photos or article links. Facebook, which has had a contentious relationship with Apple, is still not integrated into iOS. 

One Facebook employee said the phone project had been rebooted several times because Facebook originally thought it could figure out hardware on its own. The company has since learned that it needed to bring in people with previous phonemaking experience, several people said. So it is hiring hardware engineers to work with a phone manufacturer and design the shape, style and inner workings of a Facebook phone. 

Easy market entry? 

Despite the difficulties, Facebook seems well positioned in certain ways to enter the smartphone market. It already has an entire operating system complete with messaging, calendar, contacts and video, and an immense app store is on its way, with thousands of highly popular apps. There’s also that billion-dollar camera app, in the form of Instagram. If Facebook fails with its own team of engineers, it could buy a smartphone maker. The company took in $16 billion from its bumpy IPO. It could easily scoop up an infirm company like Research In Motion, which is valued at less than $6 billion, and drop a beautifully designed Facebook operating system on top of RIM’s phones. HTC is upset with Google for buying Motorola, which is worth about $11.8 billion and becoming cheaper by the day. Facebook would not necessarily challenge Apple if it enters the smartphone marketplace. Instead, it could be Facebook vs. Google, which makes the Android operating system, with both companies going after a huge number of buyers of lowerpriced smartphones. 

For Facebook, the motivation is clear: It must find new sources of revenue, and it fears being left behind in mobi le . 

FB Bloodbath continues..

Sad but there is no stopping to bloodbath stemming out of FB IPO fiasco...These type of smaller losses are going to come up more in next couple of days or weeks..

I hope FB is able to recover from this and continues to growth part..

FACEBOOK

Citigroup reportedly loses $20M on IPO

Citigroup’s Automated Trading Desk had trading losses of about $20 million stemming from Facebook’s botched initial public offering on Nasdaq OMX’s U.S.

exchange, a source with knowledge of the situation said Friday.

ATD’s losses come on top of claims at market makers Knight Capital and Citadel Securities of $30 million to $35 million each in losses. UBS was the other large market maker involved in the Facebook IPO on May 18.

FB IPO - Illustrates fundamental Character differences between Mark & Larry/Sergey

Though it is too early to predict about long-term future of Facebook but the way IPO was handled clearly shows extreme greed as the key driver in Facebook founder/s. This is simply case of extreme greed. Which is fine but definitely buy a big question mark on future of FB. It is truly great product and I have personally love it. But as Investor, I would be seriously skeptical of investing in it even if they consistently perform well on stock market.

I think there is way too much personal ambitions and pride in top management of FB, there should be some but at the same time there has to be due respect for others. It is important to treat average investor as now perception is big thing.

Whereas if we look at Google's IPO, they were the first one to open up IPO to general public and now looking back, it was fairly prices. They didn't kept on raising offering price till the last moment and kept on off-loading founder's stocks..

I am not expert in Finance or legal matters.. but this definitely leaves bad taste and will result in further cutting of my Facebook's face time :-(

Here is the link for full story..


http://www.siliconvalley.com/ci_20705548/facebook-could-face-huge-damage-claims-from-ipo

FACEBOOK STOCK SALE

Tipoff at root of IPO uproar

Social media giant could be at risk if its bankers got alert that others didn’t

By Troy Wolverton and John Boudreau

Staff writers

Facebook could be on the hook for $1 billion or more in damages if plaintiffs lawyers can prove allegations that the company and its bankers misled investors in its initial public offering.

The Menlo Park-based social networking company and its banking partners face a slew of lawsuits in the aftermath of its bungled IPO last week, which raised $16 billion for Facebook and company insiders.

The suits accuse the company of misleading investors by failing to share with them information it passed on to select Wall Street analysts — a warning that its current quarter financial results weren’t going to be as rosy as expected.


“There appears to be a good argument that it is misleading,” said Mercer Bullard, a securities law professor at the University of Mississippi. “That’s definitely a potential problem for Facebook and the underwriters.”

If plaintiff’s lawyers can show that the warning wasn’t included in the offering documents Facebook filed with the Securities and Exchange Commission and that it was “material” — meaning it could have a significant impact on a company’s stock price — then Facebook could face huge damages, said John Coffee, a securities law professor at Columbia University.

Securities experts say the company could be liable for investors’ losses on the stock after it plunged on the second and third days of trading. One of the lawsuits asks for damages of $1 billion or more, but the potential payout could be much bigger.

“Facebook has plenty to fear,” Coffee said. “It’s up to a jury to determine what’s material, (but) if the case survives a motion to dismiss, it’s likely to settle — and to settle at a dear price.”

Facebook has vowed to defend itself against the charges. Morgan Stanley, its lead underwriter in the IPO, also denies any wrongdoing.

At the heart of the controversy are alleged discrepancies between what Facebook said in a document filed May 9 with the SEC and what company officials told select analysts soon afterward.

Buried deep within that filing was a warning to potential investors that Facebook’s number of average daily users was continuing to outpace the number of advertisements it was delivering to them.

That potential revenue problem had first come up in the previous quarter’s results and was due in part to a growing number of users accessing Facebook through its mobile site and applications, which generally don’t include ads. Elsewhere in the document Facebook vaguely warned that the shift in usage to mobile devices might “negatively affect” its financial results, but didn’t acknowledge that it already was affecting revenues or say by how much.

After Facebook published the document, one or more company officials contacted a select number of Wall Street analysts, according to published reports. According to those reports, the officials warned analysts, including at least some who worked for the banks underwriting Facebook’s offering, that they needed to cut their forecasts for the company’s current quarter.

Analysts at Morgan Stanley and those from at least three of the other underwriters of Facebook’s IPO followed that advice, according to Reuters. It’s highly unusual for a company’s underwriters to cut their forecasts in the run-up to an IPO, and apparently that information was shared with only a small number of their major clients.

The updated forecasts led at least some of those in the know either to not participate in the IPO or to dramatically scale back their purchases, according to the reports.

Despite the flagging demand from some big investors, the IPO not only went forward, but the initial price and the number of shares sold were raised in the days immediately before the offering, reportedly on strong demand from individual investors.

Under a regulation that was put in place during the dot-com boom, public companies are generally prohibited from sharing material information with some investors but not others. However, there’s a loophole in the regulations for nonpublic companies, even those that are about to go public, securities law experts said. So even though investors may feel mistreated, such selective disclosure probably wasn’t illegal.

“In every roadshow there tends to be information revealed that’s likely material but that does not get given to the ordinary investor,” Coffee said.

The key question for Facebook, the banks and its investors is whether the information company officials shared with the Wall Street analysts was significantly different from what the company was telling investors in the documents, securities law experts said.

Under the securities laws, companies don’t always have to disclose material information to investors or potential investors, Bullard said, but they do have to make sure that what’s in their regulatory documents isn’t misleading.

Facebook and its partners could face other problems as well. Congress, the SEC and the Financial Industry Regulatory Authority have all said they plan to investigate the IPO, which was also marred by glitches in the Nasdaq’s trading system. Such investigations could lead to civil charges by the SEC. Although the SEC tends to levy only minor fines against security law violators, a settlement with the SEC can often aid plaintiffs who have filed private lawsuits.

“Given the high-profile nature of Facebook, and given the massive number of small retail investors investing in it, the regulators would like nothing more than to make a high-profile example out of Facebook” should they find wrongdoing, said Andrew Stoltmann, a securities attorney.
Contact Troy Wolverton at twolverton@mercurynews.

com or at 408-840-4285.

“Facebook has plenty to fear. … If the case survives a motion to dismiss, it’s likely to settle — and to settle at a dear price.”

— JohnCoffee, securities law professor, Columbia University 

Wao.. another very interesting Social Network Site!!!

I was surprised to see simplicity and ease of use of this.. more importantly, I was surprised to see that there is still scope for newer social network sites and there is still great risk to Facebook etc.. I am amazed by people's imagination..

That is the best part of current times.. you have some idea.. you can easily test waters.. if people like it.. you could be next Zuckerburg or Brin or Page!!!

Thing is, the pie is so big and there are so many diverse group of people that you can still carve out niche for yourself. Once you reach critical mass, your concept can explode and bring you in the league of Zuckerburg.. Do you care if you have just one billion or few tens or hundred's of billions.. at least I won't..

This new social network site which claims to be easy pin board is really easy to use and view and makes total sense.. amazingly beautiful pictures.. whatever you like.. you can pin on it..

I just copied some sample pins from it below for users to get yummy taste of it..

Enjoy and here goes another few minutes a day of yours into yet another newer social network site!!!

Cheers!!!

http://pinterest.com/

http://pinterest.com/pin/123075002286918127/

http://pinterest.com/pin/123075002286918122/

http://pinterest.com/pin/123075002286918113/

MARKETING RESEARCH

Pinterest leaps to third among social networks

Digital bulletin board website pulls ahead of LinkedIn, Google+

By Jeremy C. Owens

jowens@mercurynews.com 

Pinterest has become the third most popular social network in the United States, behind only Facebook and Twitter, a marketing- research report has found.

An Experian Marketing Services report found marked increases in visitors to Pinterest’s website, including a 50 percent gain from January to February that made it more popular than LinkedIn or Google+.

The Palo Alto company has found an ever growing audience for its digital bulletin boards, which allow users to collect and share digital images and link them to websites. Since co-founder and CEO Ben Silbermann launched the social network in January 2010, it has become extremely popular, especially with hobbyists. 

Silbermann 

Experian research showed that the site’s visitors were demographically different from those visiting other social networks, with women accounting for 60 percent of the visitors and a higher percentage of users in the Midwest, Northwest and Southeast. Alexa, a web-analytics company that uses a combination of visitors and pageviews to rank the most popular sites on the Web, disagrees with Experian, currently ranking Pinterest fourth among social networks, behind LinkedIn. The site does rank Pinterest as the 16th most popular website in the United States, ahead of such stalwarts as PayPal, ESPN.com and The Huffington Post. 

Social networking accounts for 15 percent of all U.S. Internet visits, Experian reported, but much of that metric can be attributed to Facebook. The Menlo Park social network captures one in every 10 U.S. Internet visits and one in every five page views, Experian reported. 

Other social networking sites are still growing as well, though not at as fast a pace as Pinterest,  Experian reported. From December 2010 to December 2011, Twitter grew 45 percent and LinkedIn grew 98 percent, according to the annual report. Growth will be hard to sustain, however, as Experian says that 91 percent of adults online in the United States already use social networking “regularly.” 

Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak. 

Power of Silicon Valley's Innovation machinery

This news article shows clear power of Silicon Valley's Innovation Machinery.. Hopefully resulting around 600 Million USD one time tax gain this year for The State of California!! and 1.4 Billion USD for Federal Government and much more to continue in coming years!!

This very clearly shows another side of silicon valley.. Whatever criticism you make about higher cost of doing business or higher state/local tax.. Doesn't matter.. If you want to do something new/innovative thing.. this is "The Best" place on the face of earth.. as of now.. and hope that it will continue like this.. 

Now the hope is that it will be used for something useful to continue oiling this Innovation Machinery instead of sucking it out.. 

http://blogs.wsj.com/wealth/2012/02/03/mark-zuckerbergs-2-billion-tax-bill/

Mark Zuckerberg’s $2 Billion Tax Bill

By Robert Frank

Buried in the registration statement of Facebook’s IPO was this startling line:

“We expect that substantially all of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur upon his exercise of an outstanding stock option to purchase 120,000,000 shares of our Class B common stock.”

What that means, in dollar terms, is that Facebook founder Mark Zuckerberg may face a tax bill this year of more than $2 billion. The Financial Times puts the figure at $1.5 billion. But if the IPO values the company at the hoped-for $100 billion, his bill could be higher.

Facebook declined comment. But here’s the math. Zuckberberg received the 120 million options in 2005, presumably for being CEO and being, well, Mark Zuckerberg. Those options will be treated as ordinary income, which means he would pay the top federal income tax rate of 35%.

The cost basis for those options is six cents a share. So if the company is valued at $100 billion, and the shares are valued at around $50 each, his gain from the sale would be up to $6 billion. Taxed at 35%, the tax bill would be more than $2 billion. The FT puts a more conservative value on the company for its $1.5 billion total.

What’s more, Zuckerberg would have to pay an additional 10.3 percent for California sate taxes, though he would likely be able to deduct those taxes from his federal bill.

It’s unclear whether the $2 billion would make him America’s biggest taxpayer, since the IRS doesn’t disclose such things. But given that the 400 top earners in the U.S. paid an average of $48 million each in taxes, chances are he’ll be at least one of the biggest taxpayers in 2012 or 2013.

Mr. Zuckerberg’s tax bill will also provide an important counter-point to the notion that the rich pay lower tax rates than the rest of America. That may be true for professional investors and private-equity chiefs, but not for dot-commers and many entrepreneurs.

Power of Internet in Egypt

Lot of discussions are going on this issue. Media and news groups are openly saying that Twitter and Facebook has lot do with these revolutions in Tunisia and now in Egypt.
I would say that, they had some impact on these revolutions. Definitely, these are great collaboration tools and you do need great collaboration to organize something on that big scale.

However, one story in a way further validated very interesting role of internet and these applications in revolution. This is about Egyptian revolution. Revolution supporters were almost double very next day after Internet was shut down in the Egypt. I think that was Mubarak's biggest mistake and final nail on his coffin. Without Facebook and twitter, people didn't had anything to do at home. They came out in even bigger numbers. No offense to these revolutionist, but it would have been better for Mubarak if he had not only continued access for Facebook and Twitter so people keep on screaming on it sitting inside home but also ask ISPs to open some streaming of nice movies on Internet free of cost so people can enjoy at home. May be he won't have to appoint Vice-President. Just kidding.

I think power of internet with support of these excellent applications and tools is becoming more and more. Unfortunately US has very big role in supporting these regimes in all over the world. However, it is these same US companies, which are kind of counteracting US government's sins. So we are even out and in process making good money by first selling arms and ammunition then further hype our Companies like Facebook and Twitter and get huge valuations for them.. I smell conspiracy by Goldman Sachs on this ;-)