Buddy Media Raises $54mm for Facebook Marketing
Buddy Media, provider of high-end Facebook pages to large brands, has raised another huge round to fund further expansion. Facebook seems eager to have companies raise money in order to expand on their platform. This, despite Facebook being ranked the worst API in a survey of developers.
Opt-In Privacy on the Rise
One of the key themes Digital Due Diligence has followed is the idea that average Internet users don’t care about privacy enough to opt out of tracking. That assumption is starting to erode: PaidContent reports that 6% of Firefox users opt out when it’s a prominent option. This isn’t necessarily the start of a trend:
- Firefox users are early adopters.
- Chrome, another browser popular with early adopters, probably won’t make privacy options so prominent; it’s used to encourage more searches and ad views.
- 94% of Firefox users didn’t opt in.
At Least One Google Ad Affects Organic Results
Google has long promised that their ads won’t affect non-ad results. Here’s a counterexample: AdWords Express (their easier-to-use local AdWords product) can apparently eliminate #1 rankings for local searches. Apparently AdWords sales representatives are aware of this, and tell people to work around it. It sounds like a bug, but Google is usually good about conceding that something is a bug and promising to work around it.
Social Traffic Continues to be Low Quality
Socia media mentions tend to help SEO, but traffic from social sites remains low-quality. This varies substantially from one social network to another: Facebook is comparatively high-quality, while StumbleUpon is notably poor. One predictive factor: Facebook generates a few clicks from people who know the person sharing the link; StumbleUpon generates hundreds or thousands of clicks from strangers. A stumble is a weak endorsement.
A Counterintuitive Negative Ranking Signal
Could asking for direct feedback be a negative signal in local search? It’s possible. Mike Blumenthal offers tips on avoiding negative reviews, which include asking for people to email the site’s owner about negative experiences. That’s an on-page factor that Google can easily check for; sites that ask for direct reviews will have fewer public negative reviews. Since sentiment analysis is increasingly likely to make up part of Google’s local ranking algorithm, this could directly affect rankings.
This could create an odd market for lemons: a site would want to solicit these reviews if its reviews are more negative than the average reviews of sites soliciting such reviews. But that skews the average even more negative, selecting out all but the worst of businesses (as well as a few who didn’t think the whole process through).
Spreading Malware Through Unicode Games
A Microsoft security blog documents the threat of malware hidden through unicode text that’s designed to look like a legitimate site. It’s similar to a prank from last year. This has all sorts of possibilities—here’s a fake Google query indicating that Google has delisted itself, for example.
Meanwhile, Bing needs to clean up its act; Malware in ads is a problem.
Peer-to-Peer Editing
New startup Kibin offers a clever peer-to-peer editing system: users can get their work edited for free if they edit other user’s documents, and can pay for expedited service. This is eerily similar to how Bittorrent’s creators intended to profit from their program.
Google+ Fights on Pricing
Apple and Facebook have made 30% the default price for massive distribution. Google+ is trying to change that by charging only 5% of the value of in-game transactions. This sends developers the wrong signal: any smart optimist is going to look at those market prices and assume (accurately, for now) that Facebook and Apple are better platforms for growing a business.
In other Google+ news, psuedonymous have just a few days to switch to real names. They still have better odds creating a new social norm (that a ‘real name’ is like a handle or a phone number—it’s a unique identifyer, but not something your friends have to call you).
Startup Incubators as a Bubble Predictor
Startup incubators nearly doubled in 2010, which sounds like a good sign that there’s a bubble. But look at the declining cost curve for startups: for the moment, they don’t need massive servers, expensive in-house development teams, or ludicrously expensive proprietary software. In fact, their big expenditure is, well, rent. If every other cost drops, then one would expect the number of startups—and the number of offices catering to them—to rise. Incubators are only growing so fast because the market is adjusting to how many of them there should be. They’ll quickly hit saturation and slow down.
Angry Birds’ Developers May be Raising Funds at a $1.2bn Valuation
Just months after raising a round from VCs, Rovio is scouting out strategic investors. The company has been surprisingly successful at finding new revenue sources, but $1.2bn is a heady valuation for a company with one brand, albeit a brand that can sell game downloads, ad units, movie tickets, and stuffed animals.
Macro Update: Apple Still Dominates
Marco Arment compares android tablet sales to obscure console sales, which is unfair but illustrative. Apple remains a powerful platform.
Giving Up on Word
Microsoft’s vendor lock-in continues to fade. Author and journalist Steven Poole offers a detailed history of his word-processing habits, culminating in a full-screen text editor that, crucially, is not Microsoft Word. This is an increasingly common narrative, often driven less by Word’s feature creep and more by the easy availability of online alternatives.
It’s easy to start a rough draft in Google Docs. All Google has to do is make it easier and easier to use Google Docs for the final copy, too.
Facebook Closes Ranks with New Policies
Facebook has updated their platform policies in order to ban some forms of linking out to competing platforms. This is the kind of move a dominant company can make; most other platforms will net benefit from mentioning Facebook, and after a certain level of saturation they’ll lose more than they gain from sharing traffic with others. This must be provoking some interesting conversations at Zynga, which has used the App Store and a Yahoo partnership to lessen their dependence on Facebook.
Meanwhile, Zynga’s latest game update focuses on a few strong ties, instead of many weak ties. That’s a smart social experiment; strong ties are harder to break, so they’ll see lower churn here. And reciprocation is much more common in smaller groups, so if Zynga can get just one player to spend money to help out another player, they’ll end up with several of those “whales” they’re going after.
And Facebook has changed their news feed policies, too, promoting games more than they have in some time. This might be a response to Google+, but it looks more like a way to backtrack from their extreme crackdown on viral games earlier in the platform’s life.
AdExchanger Handicaps Fall’s M&A
This is a compelling but tongue-in-cheek look at the next few months of ad tech mergers. The weirdest: “The AdExchanger.com Swami says, “Wal-Mart Buys Criteo (maybe TellApart)” before year end. Probability: 39%”
Guessing Google’s Real Market Share
Gabriel Weinberg of DuckDuckGo (and other projects) doesn’t buy into the public numbers on Google’s market share. Anecdotaly, this is true: very few sites report Google’s alleged 65% market share. A follow-up discussion on Hacker News sheds some light on this: navigational queries are more common on other search engines, and skew towards huge sites.
Demand Media’s Cash-Out Habit
Peter Kafka reports that one of the companies Demand Media just purchased was 40% owned by a Demand executive.
That’s not the first time this has happened. From the S-1: “In January 2008, the Company acquired substantially all the assets of The Daily Plate (TheDailyPlate.com), a community-based website for nutrition and fitness enthusiasts for total purchase consideration of [about $5 million], including acquisition costs. The Daily Plate was owned and operated by four employees of the Company prior to the acquisition by the Company.”
This doesn’t mean that Demand is cashing executives out of bad investments. It’s more likely that they’re just less concerned with the appearance of impropriety. Demand’s Daily Plate acquisition looks like a success (it’s now part of LiveStrong, so it’s hard to get traffic numbers, but the site got a fair number of links when it was independent).
An API for an API: Refining Mechanical Turk
MobileWorks, a new startup tries to create an interface on Mechanical Turk, minimizing the amount of micromanaging drudgery necessary to use the service effectively. The original purpose of Mechanical Turk was to allow humans to answer API calls. It’s worked in a few specialized cases, but hasn’t become the ubiquitous tool it could have. Another smart move:
“The other key to ensuring quality, says MobileWorks, is that most of these manual tasks fall in one of twenty or so buckets. So the company is doing everything it can to optimize around these common tasks (which currently include data scraping and form entry), to make it easier to both submit a task and for workers to complete them.”
StockTwits Launches Social Web Index
StockTwits has launched a new index of social-sensitive companies. It’s heavily weighted towards large companies that get some of their growth from social media, like Google and Amazon, but also features a few of the smaller social names. It doesn’t have much overlap with our short list of social media plays, though there’s one point we agree on: Fusion-IO is a perfect picks-and-shovels play for betting on the continued growth of social media as a trend, without picking a winner.
Digital Due Diligence Weekly
