Tech Today w/ Ken May

Tiny sidebar and news feed ads aren’t going to cut it. If Facebook wants to live up to a $104 billion valuation it will need bold new revenue streams. An offsite ad network, big glossy news feed ads, and payments for physical goods are a few ways it could boost its average revenue per user far beyond the puny $4.34 a year it earns today. Facebook has a tough decision to make now that’s going public . It will have to strike a new balance between the good of its users, advertisers, app developers, and investors. If it refuses to explore new business models, its share price could sink. But if it strays too far in favor of making money, Facebook could lose its addictiveness and the faith of its users. Here’s the four aces Mark Zuckerberg could have up his sleeve. The AdSense Killer Most ads suck because most advertisers don’t know much about who you are. But Facebook does. What if any website could use everything Facebook knows about you to show you ads you’d want to click? Well, those sites would pay Facebook a lot of money. They also might use Facebook to replace Google AdSense, the current leader amongst ad networks, which analyzes a site and automatically displays relevant ads. Facebook’s ad network essentially turn ad real estate on any website into places to serve the campaigns that advertisers buy for display on Facebook.com. Anyone currently logged into Facebook who visits one of these sites would be shown ads targeted by their Facebook information, such as age, gender, location, work and education history, interests, app usage, and friends. Facebook and the site hosting an ad would then split the money made on clicks or impressions. Facebook has denied this product is in the works whenever it’s been asked, but last week it revised its privacy policy to expand its ability to serve ads to its user while they’re outside of Facebook.com. There’d be little reason to do this if something wasn’t in the works. The march across the web of its other social plugins such as the Like button have also paved the way for an ad network plugin. It might need to develop or acquire a company with expertise in analyzing site content so it could serve somewhat relevant ads to site visitors who aren’t logged in to Facebook. The biggest obstacle, and likely the reason Facebook hasn’t already launched an offsite ad network, is that the world might not be ready. People are already skittish about Facebook using all their personal data to target them with ads when they’re on its site. Even though Facebook wouldn’t technically be “tracking” user web browsing history to power ad targeting, seeing offsite ads targeted from their onsite data might cause some people to have an all-out privacy meltdown. But if it worked, the ad network could double or triple Facebook’s ad revenue. PayBook Facebook has its own virtual currency called Credits that’s typically used to let gamers make in-game purchases like powerups, clothing for their characters, and of course, cows for their farms. Users buy the Credits for $0.10 each, and when they spend them Facebook gives 70% to the game’s developer and keeps the other 30%. These in-game payments are a healthy business for Facebook, and they’ve made game developers like Zynga rich because creating and selling virtual goods is cheap. The problem is that the 30% tax is too high to for people to sell physical goods for Credits. And while Apple also charges 30% to sell music, games, and in-app purchases through iTunes and its App Store, it has a tight grip on the digital media market. Facebook allows media sales with Credits, but only a few developers and content producers are experimenting with it as the tax is prohibitive. But if Facebook wanted to get serious about making money on payments, it could reduce its 30% tax for digital media and physical goods . In fact, its S-1 filing to IPO noted that “In the future, if we extend Payments outside of games, the percentage fee we receive from developers may vary.” That could turn Facebook into a competitor to Amazon for the huge market of physical goods, and pit it against Apple, Google, and Amazon for selling music, films, and more. The real power of Facebook Payments comes in its tie in with Facebook Connect. Together they could one day let you make a purchase and fill in your shipping info anywhere on the web with just a click or two. Before privacy fear-mongers in the media and congress made Facebook retreat, the social network briefly allowed apps to ask for your home address , aka your shipping address. Eventually Facebook will bring this back. Then this frictionless purchase system could increase conversion rates for ecommerce stores enough that they’d gladly implement Facebook Payments and Connet… Charging For Apps For Your Identity There were over 550,000 apps and integrated websites on the Facebook platform as of a few years ago. Many rely on Facebook’s identity system to replace or provide an easier alternative to signing up for an app-specific account complete with another password to remember and profile to fill out. This service saves app developers from having to build their own identity system, and primes users for social sharing that can drive crucial referral traffic to apps. Could Facebook convince some of the developers to pay either a subscription or per-user fee? Yes, but the price would have to be steep to make it a serious revenue stream. If it got 300,000 apps paying $100 a month each it’d still only be make $360 million a year. $100 a month could be a bargain for popular apps, but it might discourage smaller developers from signing on. Meanwhile a per user fee would disincentivize growth, and force apps that suddenly get popular to abandon Facebook’s identity platform. Charging for identity has potential, but it could also backfire and send developers fleeing to Twitter and Google’s free identity systems. That’s a huge problem because Facebook relies on third-party apps to contribute content to its news feed which Facebook monetizes with ads. So instead I think Facebook’s best bet to boost revenue in the short-term is… Big, Glossy News Feed Ads Advertisers don’t want to have their message crammed into the little sidebar ad boxes. And while they’re happy to have their ads made social as Sponsored Stories and injected into the news feed everyone reads, they also want less subtle marketing options. Facebook is trying to be flexible with the launch of Reach Generator and the big logout page ad unit , but advertisers want a louder marketing channel within the core Facebook experience. But beyond advertisers and investors looking to make a quick buck, nobody wants to see more ads on Facebook. So the trick is for Facebook to make ads seem like content instead. Content we actually want to consume. Tiny boxes don’t do that, but large, high-impact full screen or near-full screen ads could. Flipboard and some other mobile apps have been experimenting with these big, glossy ad formats in their mobile apps. Imagine scrolling down your news feed on the web or mobile and when you got to where there’d be a “More” button or fold (if Facebook didn’t have infinite scrolling), you’d see a large or full-screen ad. You could scroll right over it, or Facebook could make it snap into place for a second before you were free to move on. These ads could be clicked to open an advertiser’s presence on Facebook such as their Page or App, or to open the buyer’s website. Facebook could even require the ads to be social, essentially creating a glossy Sponsored Story format that could only reach you if you Liked the advertiser’s Page or your friends had interacted with or Liked the brand. As Facebook’s user base is quickly shifting to mobile where it only shows a few Sponsored Stories ads a day rather than multiple ads per page on the web, glossy ads could let Facebook make more money on mobile without having to show ads too frequently. Users might complain at first, and it could make people slightly less likely to visit the news feed. Still, Facebook could watch the data and manage rate limits to show these glossy ads only occasionally, and less often to users who immediately leave the site or app when they see them. The fact is that Facebook is responsible to its outside shareholders, even if they don’t have enough voting rights to forcibly change the company’s course. If investors are smart, they won’t grumble if Facebook doesn’t immediately flood the site and the rest of the web with ads, payments, and subscription fees. Facebook got us all to connect. Now its biggest challenge is to remain cool while making more money. If Facebook expands its revenue streams slow and steady, it will have an ocean of users to draw from for years to come. – More Big Facebook News Facebook Will Have The Biggest Tech IPO Ever, Raising $16 Billion With $38 Share Price Here’s What Could Kill Facebook Zuckerberg Will Ring In Facebook IPO From Menlo Park HQ On Friday

The Wall Street Journal made waves yesterday. Citing unnamed sources, the Journal reported Apple is ordering larger touchscreens for the next iPhone. Now, citing its own unnamed sources, Reuters somewhat confirmed the reported. Prepare yourself, iPhone diehards. All signs point to a larger iPhone. The thought of a larger iPhone clearly scares people. Read the comments on my post yesterday, “ It’s Time For A Larger iPhone. ” They say 3.5-inches is the best size. You don’t have to move your thumb to navigate the whole screen, they say. A phone with a 3.5-inch screen fits in my hipster jeans! But really, the main underlying thread seems to be some people are afraid that, just perhaps, Apple will adopt something from Android like the trend of a larger screen. Scary, I know. Change is hard. Apple has used the same form factor for 4 iPhone generations spanning 5 years. The iPhone 4, and the 4S for that matter, is still one of the best looking phones on the market, with an impossibly thin design and stunning good looks. But it’s time for a change. Besides, logic and other credible rumors point to an internal change that might be forcing Apple’s hand in using a larger screen. Along with a larger screen, the next iPhone is said to have 4G data connectivity. This requires a new mobile chipset, which, as proven by the new iPad presents a new set of challenges. Instead of growing the iPad’s height and width (and therefore the screen size), the new iPad was made a bit thicker to accommodate the larger battery needed to power the 4G chipset and retina display. Apple doesn’t have that luxury with the iPhone. The next iPhone cannot be thicker than the current iPhone. But it can be taller. 4G chipsets are generally not as mature as their 3G counterparts. They require more power and thus require a larger battery. Instead of making the iPhone thicker, logic suggests that Apple would then make the phone a bit taller, making room for a larger, likely retina, display. This change will likely upset the Apple diehards. As the screen size increased on Android phones, iPhone users took to Internet comments and forums to defend the smallish iPhone’s 3.5-inch screen. It seems sooner versus later now, Apple will use a different screen for the iPhone. Change is hard. [image via Mark Wilkie/ Flickr ]

afabbro writes “Verizon mentioned in an investor conference that it will be eliminating unlimited data plans, even for those it grandfathered in. From the article: ‘Speaking at the J.P Morgan Technology Media and Telecom conference today, Verizon Communications CFO Fran Shammo told investors that the company’s 3G unlimited data plans that customers were allowed to hang onto last year when Verizon switched to a tiered offering will soon go away entirely. Instead, the company will migrate its existing and new 4G LTE customers to a new “data share plan.” The company has yet to announce the details of this new plan, but it has said previously that the data share plan will be introduced in midsummer. The plan will allow people on the same family plan to share buckets of data each month, much like they share voice minutes and text messaging. It will also allow individuals to share data across different 4G LTE devices. ‘” Read more of this story at Slashdot.

Popular Science reported yesterday on an ambitious plan to build a functioning scale replica of the Starship Enterprise — a plan which has been carefully considered and proposed by engineer BTE Dan (BTE stands for “Build The Enterprise”, which is also the name of the project’s website).   Labelled the Gen1 Enterprise , the enormous ship would incorporate ion propulsion technology, powered by a 1.5-GW nuclear reactor, and could travel to Mars in three months and the moon in 3 days.  The 0.3-mile-diameter gravity disc would spin at two rotations per minute, and provide 1G of gravity to the crew.  It is a fully-functioning, full-size replica of the Starship Enterprise, and due to the legendary ship’s exact size, if built, it would be the largest structure ever built in the history of humanity (its length would be more than the height of the Burj Dubai Tower).   “We have the technological reach to build the first generation of the spaceship known as the USS Enterprise – so let’s do it,” BTE Dan writes. He even provides a cost feasibility study with regards to the U.S. Federal Budget, and proposes tax hikes and spending cuts to cover the $1 trillion cost of the ship: “These changes to spending and taxes will not sink the Republic,” BuildTheEnterprise.org reads.   Gen 1 Enterprise would be built in space and have a triple function as not only a space station, but also a spaceport and travelling spacecraft all-in-one.  The goal of the ship is not only to create the first space station that exists outside of earth’s orbit, but also to accelerate space exploration to distant targets much more quickly.  Its first mission would be to the Moon, Venus, Mars, and perhaps Europa. As  Universe Today  notes, the ship’s onboard laser would be used to sear through the moon’s ice crust to allow a ship to drop into its oceans. Three additional nuclear reactors would provide electricity for this laser and other ship needs. The project is not the first of it’s kind either.   The Defense Advanced Research Projects Agency  (DARPA), an agency of the United States Department of Defense responsible for the development of new technology for use by the military, announced the  100-Year Starship  project in early 2011.   DARPA says the 100 Year Starship Study  is a project to develop a viable and sustainable model for persistent, long-term, private-sector investment into the myriad disciplines needed to make long-distance space travel practicable and feasible.  The Department of Defense and NASA are also involved in the project .  DARPA’s 100-Year Starship was also designed partly to foster ideas exactly like the BTE project, from a project planning roadmap to a real ship.  You can learn more about BTE’s Gen 1 Enterprise by visiting the project’s  website  (NOTE: the site’s servers have been off-and-on due to the unpredicted spike in demand over the past 24 hours) and follow BTE Dan on  Twitter . SEE ALSO:   US Defense Dept.Laying Groundwork For Starfleet Program To Explore Deep Space SEE ALSO:   MIT Research Indicates We Will Soon Travel 1/4 Speed Of Light By Using Ships Made Of Metamaterials and “General Relativity” Source: Network World , Popular Science , Universe Today , DARPA and US Department of Defense

New submitter Adesso writes “Seem [anti-virus vendor] Avira is having difficulty with a update of all their Premium customers. A update that has been downloaded over 70 million times is causing the 32-bit version of Windows to block almost all critical application. Avira has responded promptly with an interim solution for this problem. In most cases this causes Windows to not boot properly.” Read more of this story at Slashdot.

A Finnish court has ruled that merely operating an open WiFi access point does not make you liable for copyright infringements committed on your network. From the defense attorney’s press release : This alleged copyright infringement had taken place in a specific 12-minute period in July 14 2010, a date when a summer theater play with an audience of around hundred people was held at the premises of the former school owned and resided by the lady. The applicants were unable to provide any evidence that the connection-owner herself had been involved in the file-sharing. The court thus examined whether the mere act of providing a WiFi connection not protected with a password can be deemed to constitute a copyright-infringing act. Crucially, the applicants also sought an injunction to prevent the defendant for committing any similar acts in the future. Had the injunction been granted, the legal status of various open WiFi providers would have turned out extremely difficult, as rights-owners would have been provided with a powerful legal weapon to shut them down in cases of similar, arguably insignificant infringements by incidental visitors and customers… Finally, the court concluded that the WiFi owner cannot be deemed liable for the infringements actually committed by third parties. Finnish court rules open WiFi network owner not liable for infringement ( Image: Warchalking , a Creative Commons Attribution (2.0) image from isaacmao’s photostream )

The California office of In-Home Supportive Services, which provides health support to elderly and disabled people, reported on Friday that the personal records of some 700,000 caregivers and care recipients were either lost or stolen. But this data loss was not due to a server breach, or some complex phishing attack—instead, the Social Services office said that Hewlett Packard, which manages the data controlled by the office, notified the IHSS of the breach after a physical package containing microfiche with thousands of entries of payroll data went missing from a damaged package shipped by U.S. Postal Service to the State Compensation Insurance Fund in Riverside, CA. As the package arrived damaged and incomplete, it’s unclear whether the information was lost or stolen, but the state has launched an internal investigation and notified law enforcement in the hopes of resolving the issue, according to the Los Angeles Times . “The possibly compromised information, dating from October to December 2011, for 375,000 workers included names, Social Security numbers and wages. For 326,000 recipients, state identification numbers may be at risk,” the LA Times reports. The In-Home Supportive Services office is also sending out hundreds of thousands of letters to potentially affected parties. Read more on Ars Technica…