Hundreds of Facebook employees congregated at ‘Hacker Square’ at the company’s Menlo Park headquarters this evening ahead of the company’s insanely-hyped initial public offering. Now, some of the first photos are starting to trickle in. There was a standing ovation for chief executive Mark Zuckerberg, who gave a talk before several long-time engineers bounced in while wearing capes or bringing boomboxes.

Tonight Facebook is having its 31st Hackathon to celebrate the IPO. Hackathons are a company tradition. They’re a place where engineers and other non-technical employees get to stay out all night building concepts into real products that sometimes eventually get shipped. Some of the big products that have come out of earlier Hackathons include Facebook chat and an early version of Timeline.

The company got its employees together around a big yellow crane that’s in the center of their ‘Hacker Square.’ The crane came from their old Palo Alto headquarters where it was originally put in by Agilent Technologies (the company that spun out of Hewlett Packard — arguably, the company that made Silicon Valley what it is today).

Here are some of the photos that have come in so far! The best photos are actually from Facebook product designer Francis Luu. But because we are trying not to be super lame, like various slideshow-addicted blogs that shall not be named, here is the link to his photo album. If you are a Facebook employee and are not living in ungodly fear of having your RSUs, options, etc. revoked on this special day, feel free to send us more photos at tips@techcrunch.com.

Here’s the crowd that gathered before Zuckerberg’s talk:

Here’s a new poster from Facebook’s analog research lab:

Here’s the commemorative T-shirt for the Hackathon:

Editor’s Note: Nir Eyal is the founder of two acquired startups and an advisor to several Bay Area companies and incubators. Nir blogs about the intersection of psychology, technology, and business at NirAndFar.com. Follow him on Twitter @nireyal.

Tomorrow Facebook will sell shares in one of the biggest tech IPOs in history. New investors will gobble up the stock to get a piece of the global phenomenon famously started in Mark Zuckerberg’s dorm room in 2004. But while owning the stock will have quantifiable value when it trades on the open market, few buyers will be able to say truthfully that they understood the value of the company just a few years ago.

Ask yourself candidly, what did you think of Facebook the first time you landed on its homepage? Where you blown away? Could you see how it would fill a gaping need in the lives of nearly a billion people? If you’re honest with yourself, and you’re not Peter Thiel, your answer is probably, “No, not really.”

Don’t feel bad. Like many of the astoundingly successful web companies of the last decade, it was hard to appreciate the value of Facebook at first glance. But one person who “got Facebook” early on was Noah Kagan, who in October of 2005 joined the company as one of its first product managers. In 2006, Noah was the source for an analysis of Facebook written by Nisan Gabbay. The essay identified one of the most important reasons for the company’s ascent to Internet glory and offers a prescient description of opportunities still to come:

“The Facebook success story is most interesting to me because of how daily offline social behavior drove usage of the site. There are plenty of activities in our daily life that could benefit from a complementary online product … Facebook demonstrates you have a great Internet service if offline behaviors can drive nearly daily usage online.”

The analysis was spot on. Facebook succeeded because it built new online habits around frequent offline behaviors. Originally, Facebook was designed to replace the physical face books undergraduates received their first week of school. The printed collection of classmates’ names and photographs was an indispensable artifact of college life and was referenced for everything from study group formation to late-night hookups.

TheFacebook.com, as it was originally known, offered users a digital way to feel connected to others throughout the day and from anywhere they could access the web. The power of this universal human need for social acceptance and connection helps explain how the company grew well beyond college campuses and now touches one in eight people on the planet.

The Need To Feel

Ask a devoted Facebook user why they log-in to the site several times per day and they’ll describe features they love and provide examples of how they use the service. They’ll tell you it’s a great way to share photos or keep up with their friends.

But below the surface is the need for emotional gratification. Though we can all shift our emotional states ourselves, it’s not easy. Instead of going through the hard work of consciously changing the way we feel, we use ready-made solutions to do it for us.

Using products or services for emotional gratification is nothing new; some of the most valued things on earth are those that have the ability to transport us quickly from pain to pleasure. For example, we laud the ability of painters or musicians to “move us” with their art. We shower athletes with millions for their ability to transform the gloomy start of the workweek into the excitement of Monday Night Football. Facebook, and the companies like it, are the new tools we use to quickly elevate our moods. This “emotion arbitrage” is the differential in work between having to create our desired physiological state ourselves versus utilizing a product or service to help do it for us.

Facebook won’t be the last company to help us feel good fast. The next web phenom to fulfill our emotional needs will likely contain the following traits:

Cued By Frequent Feelings

The most successful consumer web companies cater to our most basic and powerful emotions. People may feel emotions differently, but we all feel the same spectrum in varying degrees. The most valuable services create internal triggers in the user, activating desire to use the site whenever experiencing a particular sensation. These cues prompt users to come back to the site unaided by external messages. The site becomes the default solution to satiate their emotional needs.

The key is how often we feel the emotional cue. In fact, the market potential for a new company is a function of the frequency of how often the emotion it addresses is felt. As Gabbay correctly noted in his 2006 article, early Facebook users felt the need to connect to the site on a daily basis. Likewise, companies that successfully address frequently experienced emotions stand to reap huge rewards.

Pain Relief

When we feel negative emotions we seek out experiences to bring us back to more positive mental states. Products that can alleviate powerful negative feelings – like fear, sadness, rejection, anxiousness, inferiority, and uncertainty – even temporarily, can be a major draw for consumers.

Odds are that if you’ve felt restless during your day, you’ve visited Facebook, Twitter, YouTube, Pinterest or one of the other top 25 websites to lift you out of your funk. However, positive feelings fade over time, and when we find ourselves in a negative emotional state again, the cycle continues. The chemistry of the brain ensures this is so.

With Facebook, it’s often loneliness that cues a visit to the site. Twitter is cued when the user fears being out of the loop about what’s happening. Pinterest users feel the urge to capture and collect visual scraps of the web, worried they’ll lose the image lest they pin it.

Specific Solutions To Fuzzy Needs

You may be thinking that to claim websites are used to satiate unpleasant emotions is a stretch. Clearly, no one logs into Facebook after saying, “I’m seeking to be taken out of a state of loneliness. Let’s check my timeline!” Yet, it’s undeniable that the mind compels us to do everything we do as it endlessly searches for rewards and avoids pain.

So how does a consumer technology company communicate what their product is for, without actually stating what the product is for? Obviously, no one would have signed-up for Twitter with the tagline, “Twitter alleviates your anxiety of social rejection.” Instead, the company made the value of the service concrete with the tagline, “Find out what’s happening, right now, with the people and organizations you care about.”

Yet, in Twitter’s early days even this messaging was still too opaque. So Twitter had to be even more specific about the value of the service. As Josh Elman, an early product manager who led the Growth Team at Twitter, explained to me, “We had to more actively tell the story and came up with use cases around knowing what was happening. One great example is when Conan O’Brien tweeted he was going on tour and sold it out quickly. We told the story as, ‘if you are a fan of Conan O’Brian and were on Twitter the morning of Thursday, March 11, you may have seen the tweet announcing his tour and quickly bought tickets. If you weren’t checking Twitter then, you missed out.’” Same message delivered, but with a specific example to drive the point home.

Things To Come

With the imminent Facebook IPO, Instagram’s recent billion dollar sale, and unprecedented new sources of capital funding seed-stage investments, a new tide of entrepreneurs will answer the enticing call of opportunity and pursue their Silicon Valley dreams. Though almost all will fail, a tiny few will create products, which will touch the lives of not just millions, but billions of people. Those entrepreneurs will have a firm understanding of human behavior and their products will be grounded in fundamental emotional needs.

If there’s something on Facebook that won’t stop pinging you with Notifications, tell it to shut up instantly with Facebook’s new granular, in-line notification controls. Hover over an alert in the Facebook.com homepage’s globe icon drop-down and click the ‘x’ for the option to turn off notifications from that app, group, event, or post you commented on. The whole drop-down has a slick new look, too

Previously you had to dig your way to the dedicated Notifications Settings pageto make these changes, and there was no way to turn off a specific source of alerts — you had to silence all your events or all your posts. Facebook has confirmed with me that most of the changes to notifications will be rolled out to everyone by tonight, except for app alert controls which are still in testing.

As we accumulate more friends and apps, Facebook’s notifications can turn from delightful pointers to annoying distractions that interrupt our lives. These new controls mean if you want a more zen Facebook experience, you can make it so.

Now that some of us have been on Facebook for eight years, Facebook needs to be mindful of exhausting its most active users. These are the people uploading the photos, starting the groups, and throwing the events that engage everyone else that uses the social network more casually. It’s already moving in the right direction by offering notification summaries instead of individual emails

If power users become even a bit annoyed with how often Facebook alerts them to minor occurrences, and they don’t feel like they have tight control, they could drift away and stop generating as much content. That could have a ripple effect on overall time-on-site and engagement that could hurt Facebook’s ad business.

The new controls should be especially helpful for quieting noisy groups. One minute someone adds you to a group without your consent, and the next minute you’re getting dozens of notifications about weird music genres or lame club nights. Facebook recently made it much easier to find notification controls on group pages, but now you don’t even have to visit to shut off these alerts.

With the IPO tomorrow, it’s good to see Facebook launching new features today. It seems it’s really serious about the message plastered all over its headquarters. “Stay Focused & Keep Shipping”, even if you’re about to be a paper millionaire. And now it’s got a new poster for all the haters who are gonna hate on its new-found riches…

Silicon Valley venture capital stalwart Kleiner Perkins Caulfield & Byers is announcing this evening that it has closed on a $525 million round for its fifteenth venture fund, dubbed ‘KPCB 15.’

The fund will be headed up by 10 managing members: Mike Abbott, Chi-Hua Chien, Amol Deshpande, John Doerr, Bing Gordon, Wen Hsieh, Randy Komisar, Matt Murphy, Beth Seidenberg, and Ted Schlein. Longtime Kleiner Perkins investment partners Brook Byers, Ray Lane and Bill Joy are all notably off the list, which appears to confirm earlier reports that they will be declining their participation in future funds as part of a gradual general change in the partnership structure at the firm.

Kleiner Perkins says it will focus the fund toward making investments in early-stage digital consumer and enterprise, green technology, and life sciences companies. According to Kleiner Perkins, which for years has been known for placing more emphasis on green tech, it will place an extra focus on all things web going forward: “While KPCB has invested in the digital enterprise space for decades, a further emphasis will be made in KPCB 15,” the firm wrote in a press release.

$525 million is certainly big, but it’s not outsized given Kleiner Perkins’ history and the larger environment. The offering price for KPCB’s 14th fund was $650 million, and its 13th fund’s offering was sized at $950 million, according to regulatory documents. It’s also important to note that this is by no means KPCB’s only fund. In late 2010 the firm raised $1 billion for its digital growth fund, focused on later stage companies, for example, and the firm has a number of other funds focused on specific initiatives and markets.

Meanwhile, other venture capital firms have raised some truly massive rounds in recent months. Last week NEA filed documents indicating that it is raising up to $2.5 billion for a new venture fund that could be one of the largest ever in VC history. And earlier this year, Andreessen Horowitz and Tiger Global each raised $1.5 billion rounds for new VC funds.

Facebook’s $38 share price would make its deal to buy Instagram worth nearly $1.2 billion, up from the roughly $1 billion price the company announced in April.

That’s a nice little bump but the deal hasn’t gone through given regulatory reviews. On top of that, we don’t know the restrictions on the shares like when they vest or if they’re subject to lock-up period. Plus, shares may pop tomorrow and their value will probably fluctuate a lot by the time six-month lock-up date hits. When Facebook agreed to buy Instagram, it said it would pay with $300 million in cash and 22,999,412 shares of stock. That stock is now worth nearly $874 million, creating a $1.17 billion price tag.

Originally, Facebook said the deal was going to close by the end of June, according to its IPO filing. But now it appears that it may take longer because of a more thorough FTC investigation. There’s a requisite investigation if a deal is more than $66 million. But because of the more than $1 billion price that Facebook paid and the reach of both companies, the commission is said to be looking a little bit more closely at the deal, a source with knowledge of the talks tells us. The FTC usually doesn’t publicly confirm investigations until they’re over, and hasn’t publicly confirmed if they’re doing one on this deal.

But there is evidence that it’s taking longer than expected. Facebook changed its IPO filing earlier this month by amending a sentence projecting a second quarter close for the Instagram deal. It now forecasts a close sometime by the end of the year. If the government blocks the deal, Facebook has agreed to pay Instagram a $200 million kill fee, according to its IPO filing.

Because of this, Instagram’s dozen or so employees haven’t even started at Facebook. They’re still in limbo and they’re working from their San Francisco headquarters on the app, instead of Facebook’s Menlo Park office. Meanwhile, Facebook is also trying to improve its own mobile offerings; it recently boosted the size of photographs in the mobile news feed, making the overall experience more Instagram-like.

While the deal is ultimately expected to go through, a Facebook-Instagram acquisition poses several challenges for the FTC. For one, the FTC’s merger guidelines happen to focus a lot on pricing power, and how a merger would affect a company’s ability to raise prices and decrease output. But both Facebook and Instagram give their products away for free.

The other components of the FTC and Department of Justice’s guidelines have to do with market share. They’ll add up the square of different market shares for competing firms, creating a number called the Herfindahl-Hirschman Index. If it’s above 2500, then the market is highly concentrated. If it’s below 1500, then it’s unconcentrated.

But again, it’s not clear how this applies in a market where companies can rise and fall so quickly. Instagram basically appeared out of nowhere. It racked up nearly 40 million users in about 18 months. Plus, the time it takes for any given company to gain millions of daily active users is declining, partly because of the virality of the Facebook platform itself and then because the iOS and Android platforms are finally reaching scale.

So how do you apply a formula like this when changes in market share are so dynamic? The last time the FTC took a close look at a consumer web deal of this size, it was back in 2009 with the $750 million Google-Admob acquisition. The commission unanimously closed it after Apple entered the competitive field with its acquisition of rival mobile ad network Quattro, which became iAd. However, there hasn’t been a smartphone app deal of comparable size to Instagram — yet.

Teaching. In spite of George Bernard Shaw’s now infamous “those who can’t do” proverb, teaching is one of the most important professions out there. Even for the many self-taught coders out there, at some point along the way, we’ve all had our lives shaped by a great teacher — in the classroom, or out. That’s why, on the whole, teacher compensation in the U.S. is embarrassing. To pick on marketers, some might see the fact that the average marketing manager makes twice the average salary of just about every type of teacher as just a wee bit backwards.

Luckily, there are a number of startups that are starting to change that, thanks to the Web and the growing popularity of open, online educational platforms. For example, Udemy, a web platform that allows anyone to host and take online classes, this morning announced that its top ten instructors earned a combined $1.6 million over the last 12 months.

Of the top ten, all made over $50K in the last year, with highest earner at over $200K. Though Udemy courses focus on everything from design and corporate training to programming, most of Udemy’s top ten teach courses on the latter and are heavy on entrepreneur-focused content. And given the popularity of CodeAcademy and others, this isn’t surprising.

And the number of platforms offering or facilitating online courses, video and otherwise, (often free) is growing fast, including Khan Academy, 2tor, Udacity, Pathwright, StraighterLine, TED Ed, Course Hero, etc. Considering the high cost of education, the more, the merrier.

But the number of platforms where teachers make money is far smaller. Udemy offers courses for free, or for $20 or $250 a pop, and take 30 percent of those fees. Since Udemy is available to all teachers, and content on most subjects, there’s a lot of potential, and based just on the platform’s top earners, the startup is making money.

Give teachers technology that makes their lives easier, flips their classrooms, or allows them to make extra income, and you’re on the right track. It’s a little know secret that teachers are/can be extremely active and supportive early adopters. ShowMe’s CEO San Kim talks about this a lot. Given this to be true, it’s no surprise that Engrade founder Bri Holt told us that, since teachers generally don’t get much discretionary spending from schools, they tend to pay out of pocket for new technologies.

While they love to be early adopters and early testers, Holt says that banking on teachers isn’t such a great business model. Instead, for ed software (as in Engrade’s case), make schools and districts pay — they have budgets. Or, there’s Top Hat Monocle, which is finding success (surprisingly) charging students for their learning tools, while teachers use it for free.

If not saving teachers money, then help them make money. Of course, for Udemy, most of thsoe instructors outside the top ten aren’t making nearly enough for it to be a full-time salary, and those who do make money are generally experts — established names. It’s a model that’s been proven out by Lynda.com, which has been around for years, but is saw $70 million in revenue last year without having taken a penny of outside funding.

Lynda.com makes sure that the quality of its affordable, paid online course material is of high quality by hand-picking instructors who are experts in their field. And not just experts, but those who are experts and great teachers, which don’t always go hand-in-hand. But the Lynda co-founders told us that nearly 90 percent of its educators earn their entire annual income by producing videos for the platform.

But it’s not only video. One big, under-the-radar success story is TeachersPayTeachers, an open marketplace in which teacher can buy, sell, and share their original lesson plans. Like Lynda.com, the startup is not only making money, it’s profitable and self-sustaining without having taken any outside investment.

Teachers on the site passed $7 million in earnings last week, with the highest earner (a kindergarten teacher from Georgia named Deanna Jump) having made a total of $700K on the platform. She’s currently earning $60K per month, the startup’s founder Paul Edelman tells us. Yep.

For a historical perspective, Edelman tells us that, in 2011, teachers on its platform collectively made $3.4M. Today, that’s jumped to $7 million today, and since sales are growing at an average of 300 percent annually, the founder expects to hit $10 million by the end of the year and $24 million in 2013. Edelman has to be feeling good about the way things have worked out.

A former teacher, Edelman launched TeachersPayTeachers in 2006 and sold it to Scholastic later that year. But the recession saw the site’s growth dwindle, so Edelman offered to buy back the site. Scholastic agreed, so Edelman bought back his site in 2009 and it’s been profitable ever since.

As to the business model? The site is subscription-based, with two plans: A free option, which gives teachers 60 percent of all sales, and a premium membership that runs $57 a year and allows teachers to keep 85 percent of their earnings. Compare that to Udemy’s flat 30 percent cut, Pathwright’s 4 percent cut of sales, and Lynda’s $25 subscriptions (granted these three sites focus on courses, not lesson plans), and it might seem surprising that TeachersPayTeachers is growing like it is.

But Edelman tells us that the site hit 700K registered teachers last week, which is about the same number of teachers as the popular, venture-backed Edmodo, and 3.5x the size of Udemy’s entire user base.

Regardless, each of these sites, along with WeAreTeachers — an online community for teachers which allows them to collaborate and submit ideas for cash and prizes — are finding traction, adoption among the world’s savvy educators, and more importantly, are offering them supplementary online revenue streams. It’s still too early to say just how big these platforms will become, but with startups like Pathwright and Udemy opening the doors of online courses to one and all, there’s a lot more competition for eyeballs and dollars ahead.

For more on Udemy’s high earners, go here, and for TeachersPayTeachers at home, go here

This is the age of thinking thermostats and, not to be outdone by a well-known circular model, hardware startup Ecobee has released the Smart Si. It is a smart thermostat with small color screen and a web interface so temperature wonks can update their heating models on the fly.

The Smart Si is not quite as sleek as the Nest but offers more accessible settings – think of this as the Linux to Nest’s OS X. The web interface allows you to see your home’s current status, set a vacation profile, and view reports on your system’s performance including HVAC and heater usage.

The system pulls in weather alerts as well as alarms from your home system and you can chart and graph all of your performance parameters. Arguably, I doubt many will get very intense with this stuff, but it’s definitely available.

Ecobee has been around since 2007 and the introduced one of the first Wi-Fi-enabled thermostates. This is their effort at building a high-end thermostat but the company has plenty of experience in the space. The company also recently announced wireless Smart Plugs that allow you to control electronics in your house using the ZigBee networking standard.

The Smart Si costs $220 and is available now for pre-order.

Product Page

Pulse, the popular free mobile news reader for iPhone, iPad and Android, could soon get ads. Until now, Pulse, which launched its first app in May 2010, was ad free and the company focused more on user acquisition than monetizing its service. A new job posting on Pulse’s site, however, clearly spells out the company’s plans to start making money through advertising in the near future. The company is currently looking for its first sales executive and says that it is “building innovative and disruptive ways of empowering brands to share their content and tell their story in a way that’s natural and native to Pulse.”

Even though it’s now been more than two years since its launch, the company never revealed its monetization plans beyond a few glimpses here and there. Now it looks like some form of advertising is definitely coming to Pulse. Judging from this announcement, though, those ads won’t be standard mobile ads.

The job posting stresses that Pulse is not looking to sell standard ad units and is instead “reinventing what marketing can be and should be on mobile devices.” Pulse notes that, in the long run, it plans to build a global sales organization, but for now, the new sales executive’s job will be to establish the company’s relationship with brands and agencies and to evangelize the Pulse platform and the company’s approach to marketing.

Asked about the job posting, Pulse CEO Akshay Kathari told us that Pulse ads won’t look and feel like ads. Instead, they will “resemble the high-quality content that keeps users coming back to the app.” As the product is still a work in progress, though, he wasn’t in a position to say more about it at this time.

So far, Pulse has raised $9.8 million. Its mobile apps had about 11 million users by the end of 2011 (up from just 1 million a year go) and the company was seeing a new download every 2 seconds. Pulse also comes pre-loaded on a number of devices, including Amazon’s Kindle Fire.

It’s worth noting that, for a short time in 2010, Pulse was actually banned from the App Store for a few days after the New York Times complained that the app was using its content and making money off it (at that time, Pulse for iPad was still a $3.99 app). It’ll be interesting to see how Pulse plans to avoid similar issues once it starts selling its own ads.

It’s been about a month and a half since peer-to-peer bike rental service Spinlister launched in San Francisco and New York. Since then, the New York-based startup has been busy trying to attract bike owners to list their bikes and improve its inventory, while also trying to improve the overall experience of using its site.

Despite only being available in two cities and for six weeks, the startup has already attracted a fair amount of interest from listers and renters. It has an inventory of about 400 from bikes from individuals, and more than 2,000 from bike rental shops listed. And it’s seen rental interest from all over the world, with renters from six of the seven continents. (Antarctica is the only holdout.)

That’s translating into cash for those who list bikes that otherwise weren’t getting ridden. In the first six weeks, 25 percent of listers have completed a rental, with 25 percent of those receiving multiple rentals. Those folks have made an average of $50 each so far — and if your bike is popular, you can pull in upwards of $100 a week, depending on pricing according to CEO Will Dennis.

But just like Airbnb and Getaround before it, Spinlister still has a lot of work to do to educate consumers about peer-to-peer rentals, and to reduce friction in the process. As a result, it’s put up new resources on its website, including handy guides for renting and listing bikes on the site. The goal is to decrease fulfillment times and increase the likelihood that both renters and listers respond to one another. Spinlister also has general guidelines for those who haven’t been on a bike in a while, as well as city-specific resources for New York and San Francisco.

For those who are still unsure if they should list their bikes, for fear of theft or damage, the startup has also introduced the Spinlister Guarantee, which will insure the fair-value price of a bike for up to $5,000. That should set some folks’ minds at ease.

What’s next for Spinlister? The company expects to expand to several new U.S. cities over the next six months, with plans to expand internationally soon after that. It’s also hoping to go mobile and roll out an iPhone app. It has raised $225,000 in seed funding and is in the process of hiring an iOS developer and looking for a Rails developer as well.

For those of you who will be in New York City for TechCrunch Disrupt and wish to skip the cab line and bike around town instead, Spinlister is offering up $20 credits to the first 25 people to email TCDisrupt@spinlister.com and sign up for an account. Happy biking!

Editor’s note: Peter Vogel is co-founder of Plink, a Facebook Credits-based loyalty program that rewards Facebook members for dining and making purchases at their favorite restaurants and stores. Reach him via email at peter@plink.com or follow him on Twitter @pvogel.

Although introduced in 2009, we’ve only seen glimpses of what Facebook Credits will become when it grows up, and Facebook is about to kick off the training wheels.

So far, Facebook has done little to promote the virtual currency of Facebook Credits and it’s been used almost entirely in social gaming. But even with this limited exposure and promotion, Facebook Credits’ fees already represents $557 Million in revenue or 15 percent of Facebook’s entire 2011 revenue. Even more remarkable is that less than two percent of Facebook users bought virtual goods with Facebook Credits in 2011, yet it still represented 15 percent of Facebook’s revenue, primarily from just one vertical – social gaming. One vertical and two percent of members represented 15 percent of Facebook’s 2011 revenue!

Why hasn’t Facebook promoted the Credits Economy more aggressively? 

Some believe that Facebook has waited to promote Credits as a Facebook-wide currency until after the IPO; a valuation based on advertising revenue is less volatile and less likely to attract concern from investors.

A second theory is that Facebook tends to introduce features slowly and let them develop; even though Facebook’s App Platform was opened in 2007 and hundreds of millions of members were playing games, Facebook did little to monetize the platform until they required game developers to use Facebook to process payments on July 1, 2011, about four years later.

Now, about three-and-a-half years after Facebook Credits were launched, Facebook is ready and they’re going to need the revenue to satisfy shareholder expectations.

What will change after the IPO?

It certainly looks like, post-IPO, Facebook will begin promoting Facebook Credits heavily and will soon be making Credits easier for consumers to use and more profitable for developers.

On the consumer front, we’re predicting that a user’s Facebook Credits balance will be more prominently displayed (still privately) on their profile. Currently it’s hidden a few clicks deep under Home>Account Setting>Payments.  Facebook will also start featuring a list of places where members can spend Credits. Facebook’s new App Center is a great start for this, increasing the ease with which users can find new apps – not just games – some  for free, some for purchase with Credits. Facebook could also feature a new category under “Favorites,” listing recommended ways to spend Credits based on that specific member’s interests, friends, etc.

In addition, Facebook will likely run more promotions offering consumers Credits at a discount, “Buy  $1 in Credits and get $2-3 dollars worth of Credits for free.” This is similar to promotions Facebook ran in games just few months ago, but Facebook will use the same strategy outside of games to attract a wider audience.

Developers will also benefit from all the promotion that makes Credits easier to use for consumers, but for most developers, increased discoverability is key. No matter how great an app or game they build, if a consumer can’t find it, everyone loses. For the Facebook credits economy to flourish, discoverability is essential; increased listings, rankings, categories and a well organized App Center is key and Facebook is already on their way to providing developers with these features.

Facebook has also hinted, with little explanation, that in certain verticals outside of gaming, Facebook will consider lowering the 30 percent tax they typically keep on Credit transactions. This may open the door for Open Graph participants like Netflix, Spotify and the Washington Post, to name a few, to begin accepting Credits for monthly subscription plans, created just for Facebook. Since these partners and more than 50 others and counting are all integrated into Facebook’s Open Graph, already with the ability to share “like’s” “listening to,” and “watching,” the next logical step is to begin accepting Credits as payment. By lowering the 30 percent fee it is now financially possible for these partners to participate in the Facebook economy.

What does all this mean for the Facebook Credits Economy?

I’ve predicted and still believe the revenue generated from Facebook Credits will double every year for the next five year, eclipsing the revenue generated by advertising by 2016.

Credits will emerge from gaming this year and be used Facebook-wide for all sorts of paid apps ranging from dating to entertainment (TV, movies, music and live streaming of pay-per-view events) to more functional utility apps you might be used to buying for your smart-phone.

Facebook Credits is about to grow up fast.

Social gaming was its birth, the new App Center is its first step … and we’re all waiting to hear its first few words. I’m guessing it will be some version of, “Pay… here… always.”

“People are sick of shitty customer service,” said FastCustomer co-founder, Stephanie Hay. And she and her team aim to do something about it.

Their first product, for the iPhone, Android, and other platforms, allowed you to search for a customer service number – say Adam & Eve – and press a button. The program waits on hold for you and then calls you on your phone immediately upon connecting. The company saw 100,000 downloads and estimates that they saved people 1 million minutes of hold time.

They’ve just launched a new telephone concierge service, 1855-DONT-HOLD (855-366-8465), that allows you to call in and perform the same operation. In short, this thing stays on hold for you. The whole process usually takes less than an hour.

“We asked ourselves ‘How can we remove the pain for the customer service experience for the end user?’” said Hay.

The co-founders are Aaron Dragushan of Wondermill, the aforementioned Hay, and Paul Singh of 500 Startups. They closed a $750,000 seed round last September.

The company currently handles 1,000 calls per day and hopes to handle more with the new phone number.

“After hearing ‘Please stay on the line, your call is important to us,’ on repeat, we talked about how awesome it would be if humans never had to wait on hold with technology again,” said Hay. “So now, with the introduction of our concierge-level service, we’re trying to make customer service experiences — dare I say — actually enjoyable.”

The company works closely with companies to ensure proper routing. Premium services allow companies to completely control the user experience, from assigning the correct phone numbers to modifying the notification messages. They also white label the service for corporate clients.

The new phone service will launch shortly but you can try the in-app service now.

There are a few lessons you could take away from the fact that FacebookIPODayClosingPrice.com exists right now:

1.  Ask and ye shall receive, especially if you’re Chris Sacca.
2. The Hacker Way goes way beyond Facebook headquarters.
3. Facebook IPO fever is definitely in full swing and we should all just give in to it.

Here’s the story: Angel investor and all-around web magnate Chris Sacca wrote a quick tweet early yesterday about how it’d be cool if there was a website where people could predict where Facebook’s stock will end up at the end of its first day as a publicly traded company. Horse races in general are always fun to watch, after all, and it’s definitely a conversation that’s happening around many a watercooler now that Facebook’s IPO is officially on for tomorrow morning.

So a programmer named James Proud answered the call, hacking together FacebookIPODayClosingPrice.com, a fun little website that keeps a running tally of people’s bets on where Facebook’s stock will close on IPO day.

@sacca Ok!—
James Proud (@jamesproud) May 16, 2012

The site, which went live yesterday afternoon, says it was “quickly knocked together with Python, Tornado, Postgres, Redis, Heroku, no sleep and Bootstrap.” It’s pretty simple: Anyone with a Twitter account can sign in and place his or her bet on what price Facebook’s stock will be at market close tomorrow afternoon.

Some big names in the web have weighed in on the site already: Chris Sacca thinks it will close at $56, while Chris Dixon predicts a slightly more modest $50.

And what’s the general consensus at the moment? As of press time (or clicking publish on WordPress time) the site says that 475 people have predicted an average closing share price of $54, which values the company at more than $135 billion. That’s a 42 percent boost over the $38 share price of its IPO — not too shabby. Anyway, if you’re so inclined go on over and place a bet of your own. At this point there’s no fighting the Facebook IPO fever — and if you can’t beat ‘em, join ‘em.

Twitter does a lot of things right, but it still hasn’t solved the problem of turning its noise into signal. After joining Twitter, it can take a lot of following and unfollowing scores of accounts before you’ve curated a stream that makes sense for you. With its platform growing fast, Twitter is looking to make the onboarding process a little easier (and more personalized) for new users, which is why it announced today via its blog that it will begin serving users tailored suggestions of who they should follow.

Twitter is calling its new personalization features “experiments,” (in other words, they’re in beta), which will manifest for users in several ways. The first being that it will show new users a list of recommended accounts, which will be accompanied by a timeline that features tweets from those recommended accounts. New users (who are part of the beta testing) will see the list as soon as they sign up, but will not be required to follow their suggestions.

For those of us already using The Twitters, if you’re a lucky winner, you’ll begin to see Twitter’s suggestions in the “Who To Follow” box on the left side of your homescreen. From what we can tell, the box won’t be altered from its current placement/design, but will instead just start showing more relevant suggestions. To see who Twitter will recommend for you, check out their preview page here.

So, how exactly is Twitter going about serving you these recommendations? The suggestions are “based on accounts followed by other Twitter users and visits to websites in the Twitter ecosystem,” meaning that Twitter is culling the data that it receives from other websites that are utilizing its buttons/widgets, identifying the accounts that are most followed by people who visit those sites, and recommending it to you based on similarities with those users in your own Twitter activity.

Twitter will be offering the ability to turn this functionality off. This comes with the context of the announcement earlier today that Twitter will be supporting Mozilla’s “Do Not Track” feature, which allows users to opt-out of those pesky third-party cookies, including … wait for it … those used in advertising.

This morning, that seemed just a symbolic gesture on Twitter’s part, because they weren’t really tracking you anyway. With the addition of their follow recommendation engine, now this move makes perfect sense, and is obviously timed perfectly. Now Twitter can just say that, hey, if you don’t like it tracking your activity, turn on Do Not Track. As to who’s supporting: Firefox, Safari and IE9 already have some form of Do Not Track features built-in, but it seems that only Firefox is really evangelizing. However, all three browsers should be compatible with DNT, and allow for opt-outs.

There is more information about Twitter’s integration with Do Not Track reflected in its privacy policy, so, as mentioned, if you’ve got it enabled in one of those browsers, you won’t see any tailored suggestions. With the heightened interest and concern over the way social networks (and beyond) are using our personal data, this is a smart move on Twitter’s part to ensure users that it’s taking transparency (and privacy) seriously.

The other important piece of this is that people who are new to Twitter will see an option to tailor their feeds based on the sites they’re visiting from twitter, accompanied by a “learn more” link, whereas current users will find a “personalization” section added to their account settings.

Users can disable personalization at any time, which prevents Twitter from collecting information on your activity, and as the blog post adds, “You can even choose to turn off tailored suggestions from the preview page (which shows some suggestions we’d make for you).”

What’s really interesting here is that this is the first sign of Twitter getting serious about building its own interest graph, as if you’d ever get tired of all this “graph” talk, right? But this is the social network’s first big move that shows it following in the footsteps of Facebook, as the more personal info they collect on your interests and activity on their platform, the more info there is to feed targeted advertising and tweets.

For more, check out Twitter’s blog post here, and current users can test out preview here. Do Not Track info here. Do Not Track info here.

Additional reporting from Frederic Lardinois

Verizon CFO Fran Shammo ruffled a few feathers yesterday when he mentioned at an investor conference that every one of their customers would be on one of the carrier’s new data share plans.

In an effort to clarify his meaning, Verizon sent a statement to a handful of news outlets today that shines a bit more light on how they plan to make this situation work.

First thing’s first — Verizon still intends to make those pesky (for them, anyway) unlimited data plans a thing of the past, they’ll just be doing it more gradually than originally anticipated.

That said, subscribers currently clinging to their unlimited data plans can actually keep them in certain cases. If you’re a customer who just upgraded from a 3G to a 4G device with that older data plan intact, congratulations — you’ll be able to hang on to it until the next time you waltz into a Verizon store to upgrade your smartphone.

Furthermore, customers who pay the full outright price for their handsets will be able to keep their unlimited plans as well, though that’s hardly anything new for them — by buying the device outright, you’re able to dodge another multi-year contract extension. As far as Verizon seems to be concerned, you’re fine unless you take them up on the offer of a discounted device (and the contract that goes with it):

“When we introduce our new shared data plans, Unlimited Data will no longer be available to customers when purchasing handsets at discounted pricing.”

That little “discounted pricing” proviso is an interesting one — does that mean customers would be able to hold onto those unlimited plans if they opted to pay full price for devices from now on? It certainly seems that way, though I can’t imagine too many people would be eager to take them up on that deal considering how damned expensive smartphones are without that nifty little subsidy to help out. Still, the option seems to be there for anyone who doesn’t mind spending gobs of money to prove a point.

The ongoing interest and use of cloud-based services has brought a generally good set of results to one of the leaders in the enterprise software-as-a-service business. Salesforce.com released Q1 earnings just now and in a quarter that is traditionally slower for the company, it swung to a net loss of $19.5 million, compared to a net profit of $530 million a year ago. Nevertheless, total revenues for the quarter were $695 million and earnings per share of $0.37 — beating estimates from analysts as polled by First Call, who expected adjusted EPS of $0.34 and $678.21 million for revenue. The figures were also better than Saleforce’s own guidance of $0.33-$0.34 for the EPS and revenue of $673 million – $678 million.

The sales were an increase of 38 percent on revenues for the same period a year ago, and Marc Benioff, chairman and CEO, salesforce.com, says that the company is on track for its first $3 billion year; last year the company broke new ground with $2 billion in sales.

Within salesforce’s revenues of $695 million, the company is making the vast majority of its money on its core, cloud-based CRM software, for which subscription and support revenues were $655 million. Professional services accounted for a much smaller portion of sales at just $40 million. Subscriptions are growing more: they were up by 38 percent compared to 30% for professional services.

Deferred revenues — that is, revenues that Salesforce has yet to collect from its customers — is up by quite a lot. Salesforce notes that overall deferred revenue on the balance sheet was $1.33 billion, a rise of 46 percent on last year. Meanwhile unbilled deferred revenue — business that is contracted but unbilled and off the balance sheet — was up to $2.7 billion from $2.2 billion a year ago. Rises in both might be a reflection of Salesforce’s own growth, but could also be a sign of customers delaying their payments, which Salesforce cites as a risk factor in its business.

Salesforce says that it generated cash of $213 million in Q1, up 53 percent over last year. Total cash, cash equivalents and marketable securities are at $1.7 billion.

In addition to the bullish projections on $3 billion in revenues for the full year, Salesforce.com says that it expects revenues for the next quarter to be up on this quarter and in the range of $724 million and $728 million, up 33 percent on last year’s Q2.

Looks like tomorrow might be a good trading day for Salesforce.com. In a research note, Canaccord Genuity analyst Richard Davis noted that the thinks that shares of Salesforce.com might rise by as much as three-eight percent on Friday, due to “at least temporary exhaustion of risk-off selling of high valuation growth stocks,” and “a positive halo effect from a successful Facebook IPO.”

Love’em or hate’em, despite the best efforts of Bump and others, traditional business cards aren’t going away anytime soon. At least, though, some companies are trying to bridge the gap between paper cards and efforts like Bump. New York-based Vizibility first announced its NFC-enabled businesses cards during SXSW earlier this year. Now, the online identity management platform for professionals, is ready to take this project out of beta and is making it widely available as a standard feature for its paying subscribers and for a one-time fee of $15 for users with free accounts.

With these cards, Vizibility promises, users will be able to wirelessly exchange contact information and share “hand-picked profiles, video bios, verified Google results and more.” Given that many phones, including the current generation iPhone, don’t yet support NFC, Vizibility is also printing a QR code on the front of the card as well. Vizibility users can also buy additional QR stickers and business cards and allows users to track when and where their cards were scanned.

Once scanned, the user’s browser will open up a mobile-optimized microsite with the contact’s information. The site lets you download you contact’s vCard and will also show mutual LinkedIn and Facebook friends. According to Vizibility, its cards are “the first commercially available mobile business card using QR code and NFC technologies.”

Vizibility has raised about $2.6 million since it was founded in 2009. The company’s latest funding round was a $1.3 million round last August that was led by Launchpad Venture Group of Boston.

Facebook shares will start trading at $38 tomorrow, the company confirmed in a release, giving it a valuation of $104.12 billion. Facebook and its early shareholders will raise just over $16 billion in tomorrow’s much anticipated IPO.

At a $104 billion valuation, Facebook is worth more than any other tech IPO candidate at the time of its offering.  It also perfectly matches what Facebook shares have been trading at in secondary markets over the last several months. Google was worth $23 billion at the time of its very unusual Dutch auction IPO back in 2004. As of tomorrow Facebook will be worth about half of what Google is worth now.

The proceeds of the sale are actually split between Facebook and early shareholders like Peter Thiel, DST and Accel Partners. Facebook is only selling 180 million shares while the other stockholders are parting ways with 241,233, 615 shares. On top of that Facebook has given the investment banks underwriting the IPO the 30-day option of selling up to 63,185,042 extra shares. At final pricing, that would be worth $2.4 billion, but it’s likely that Facebook stock will pop a bit tomorrow.

Because Facebook priced at the higher end of its $34 to $38 price range, this suggests that there will unsurprisingly be a lot of demand tomorrow. Bankers will want to price the deal so that there’s a bit of a pop for good publicity, but Facebook won’t want to underprice the deal so much that they leave billions of dollars on the table.

Accel Partners, the first venture firm that backed Facebook, will walk away with $1.9 billion from the sale of its shares. Goldman Sachs will take away $1.1 billion after its late stage investment in the company last year.

Facebook will have the third largest IPO in U.S. history. Only Visa and Italian electric utility ENEL raised more in their IPOs. It’s valuation would also make Facebook worth slightly more than Amazon, which has a $98 billion market cap.

A $104 billion market capitalization puts Facebook at more than 100 times its trailing earnings. That’s a big multiple to live up to, and it will likely need to add bold new revenue streams to justify the mammoth valuation.

Shares will begin trading tomorrow at 11am Eastern Time after Mark Zuckerberg remotely rings the NASDAQ opening bell from Facebook’s Menlo Park headquarters. Zuckerberg is expected to give a speech or at least a few remarks from Facebook HQ courtyard tomorrow morning, and preparations for the ceremony are already underway.

Last night, Time Inc. threw a pretty badass party in Manhattan to celebrate “Ten NYC Startups To Watch.” Among the ten were Fancy Hands, a site that offers up a personal assistant for every and any need you might have, and Stamped, a social network that lets you put your stamp of approval on the things you like.

We pulled aside founders of both companies to find out a little more about them, their business models, and why they think they deserve a spot on Time Inc.’s list.

In the case of Fancy Hands, founder Ted Roden justified his slot on the list with staying power. He’s been working on the site, that up until a recent $1 million funding round was entirely bootstrapped, for three years, with the site alive and growing for the past two years.

In his opinion, Time Inc. chose Fancy Hands because it’s not necessarily all about how much hype you get at launch, but your ability to scale and grow over time.

For Stamped the story is a bit different. After asking co-founder and CEO Robby Stein why he was named one of Time Inc.’s 10 best startups, his answer was all about disruption.

“We think that we’re trying to do something that will hopefully disrupt the way people think about discovering new information, and really transform the model from one that’s more crowd-sourced and anonymous to one that’s extremely personal,” said Stein.

Freshdesk is trying to make waves in cloud customer support. Launched in June of last year, the young company is on a mission to help businesses of all sizes manage customer service through both traditional channels, like email and phone, as well on social networks like Facebook and Twitter. Earlier this week, Freshdesk added to its customer support suite, launching support for private customer messages via the new Brand Pages Facebook launched back in February. This means that, using the new Pages, customers can initiate private conversations with brands, with the ability to share the kind of sensitive information they wouldn’t post publicly on Facebook or Twitter, like passwords and credit card numbers.

Freshdesk said that it’s the first customer support platform to offer this kind of integration, a shot across the bow of its two largest and well-established competitors, Zendesk and Salesforce’s Desk.com. To compete, the startup is making a push to differentiate its platform, adding private messaging via Brand Pages on top of what it believes is its core differentiator: Allowing its customers to support and manage multiple products and brands from one simple web interface.

In less than a year, Freshdesk has already raised $6 million in venture funding from Tiger Global and Accel, and, though it believes that the biggest market opportunity down the road will be in offering its brand of cloud customer support to the enterprise, Freshdesk wants to entice (and give back to) the little guys as well.

That’s why the startup is today announcing the first phase of its “Future Fund,” which will provide customer support services to 501 startups and early-stage businesses through a $10 million “fund,” which includes free support for one year. Freshdesk has teamed up with incubators and angel funds, like YouWeb, Tandem Entrepreneurs, Internet India Fund, 500 Startups, and Proudly Made to begin giving their early-stage businesses customer support tools so that they don’t have to worry about allocating their own money to CRM tools at those critical, early stages of growth.

Not unlike any other fund that provides growth services, value, or support to young businesses, Freshdesk is looking to give startups a painless way to start generating customer love early on in their growth.

So what does the Future Fund offer? Qualifying startups (any company that has under $1 million in annual revenues is welcome to apply, it’s not limited to the accelerators we mentioned earlier) will get up to three full-time customer support agents free for an entire year as part of Freshdesk’s “Garden” plan. The plan includes multi-channel support, which startups can use to support customer relation management through email, phone, their website, Facebook, and Twitter from one dashboard.

This means that they can view and manage queries, lead or sales questions, ticketing functionality, as well as community management capabilities that allow teams to engage customers in discussion forums and let early adopters suggest and vote on ideas. Startups with multiple brands or product lines can support their brands through a single account.

Freshdesk is supporting the fund from its internal revenues, and although it’s not disclosing rev growth, the team did say that it was supporting 700 companies as of April, which has doubled since February. With its Future Fund, Freshdesk believes that it’s doing a community service by way of a free service that lets young businesses focus on their product while maintaining quality customer support, but this is also very much an initiative that it hopes will introduce SaaS support to a new generation of companies, which it will try to convert to paying customers when the year of free service expires.

Like others, Freshdesk is free to start, with a tiered pricing scheme that escalates based on the number of agents and customization features a business needs. More on pricing here.

For startups looking to participate in the Future Fund, check out its landing page here.

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.

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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