Google is under fire in the UK for its tax practices in the country, and a new key witness (who spoke to The Sunday Times) might put them in deeper hot water when he hands over a reported 100,000 emails and documents to the British Revenue & Customs (HRMC) services. Barney Jones, a former Googler who was at the company between 2004 and 2006, says he has material proof that Google’s London sales staff which would negotiate and close sales for the UK market, despite claiming its Dublin HQ handled finalizing all deals.

Jones was prompted to speak out by testimony given to the Commons Public Accounts Committee (PAC) last week by Google VP Matt Brittin, who said that London-based Google staff were never closing any ad sales deals, though some selling efforts were made there. Brittin had previously gone on record in November 2012 with statements asserting that no one in the London office was doing any kind of ad selling.

The matter of where the deals were finalized is especially important because if a sale closes in London, it’s likely they’d be taxable in Britain, rather than in the extremely low tax-rated Ireland. Jones told the Sunday Times that Google is fully aware of this, yet there are still records of Google staff closing major deals from companies like eBay and Lloyds TSB, but Google doesn’t seem at all certain that any of the documentation will absolutely prove that it has done anything strictly against UK tax law, according to a statement provided by Google Direct of External Relations Peter Barron to the Sunday Times.

“As we said in front of the public accounts committee, it is difficult to respond fully to documents we have not seen,” the statement reads. “These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.” Google reiterated this statement to TechCrunch when we contacted them for comment.

Ireland uses its lower corporate taxation rate, which is 12.5 percent, or a little over half of Britain’s 23 percent, to attract big names who base their European corporate headquarters there, including Apple and Facebook in addition to Google. The search giant is currently under fire from UK parliament members for its tax practices, thanks to a Reuters investigation that revealed statements it made last November to the PAC about its London operations may not have been entirely accurate.

Amazon is next in the PAC’s sights for its UK tax practices, as Reuters has also recently uncovered evidence to suggest that it, too, is doing a lot of selling through an autonomous London-based unit, despite routing its sales on paper through a tax-exempt affiliate based in Luxembourg. In fact, for most on Google’s footing, avoiding taxes seems to be the exception, not the rule, and a recent piece by V3′s Madeline Bennett explains that even if this fresh round of hearings reveals that these schemes do run afoul of UK tax regulations, it’s unlikely we’ll see situations change all that dramatically. Governments are too dependent on the general economic benefits of hosting big corporations, and get too much out of awarding them contracts, she says, to risk doing long-term harm to those arrangements.

Still, what Jones claims to have would be incredibly embarrassing for Google, especially if it spells out in no uncertain terms that closing deals was regularly handled by Google’s London staff, in direct contradiction to what Brittin has told the committee, but until we see the goods, there’s no telling how deep down the rabbit hole his information actually goes.

$FB is still stuck at $26.25, way down from its $38 IPO price, but it’s made important progress since going public a year ago. Daily users up 26%, mobile monthly users up 56%, and revenue up 38% are some highlights. It’s running out of people to sign up in the developed world, but with this growth and no serious competitor in sight, it’s survived its hardest year yet.

• Likes – 4.5 Billion – Up 67% – Average number of likes generated as of May 2013, up from 2.7 billion likes generated daily in August 2012
• Content Items Shared – 4.75 Billion – Up 94% – Average number of content items shared daily as of May 2013, up from 2.45 content items shared daily in August 2012

[Stats and images provided by Facebook]

Likes and sharing are growing faster than Facebook’s user count, indicating strong engagement. This contradicts rumors that people are tuning out of Facebook. Zuckerberg’s Law, the CEO’s Moore’s Law-style theory, states that people will share twice as much every year. Facebook almost made good on Mark’s claim. It’s important that Facebook keeps that number growing as it’s shared content that keeps people visiting Facebook and seeing its ads.

To do that, Facebook is working on the more immersive mobile experience Home which has increased time spent on Facebook by 25% for its small number of active users. More time spent could lead to more sharing. This year it doubled the speed of its massively popular iOS and Android by switching them from HTML5 to native architecture, which lead to longer session times. It added content-specific news feed to boost browsing, and launched Graph Search to pull additional value out its data and get people to contribute more.

It’s also been beefing up its mobile SDKs for iOS and Android to make it easier for apps to share content to Facebook. That’s a big reason Facebook cares about helping its developers grow — they’re scratching each other’s backs.

• Monthly Active Users – 1.11 Billion – up 23% – As of March 2013, up from 901 million MAUs in March 2012
• Daily Active Users – 665 Million – up 26% – On average as of March 2013, up from 526 million DAUs on average in March 2012
• Mobile Monthly Active Users – 751 Million – up 54% – As of March 2013, up from 488 million mobile MAUs in March 2012
• Instagram – 100 Million Monthly Active Users – As of February 2013

Facebook is still signing up people pretty quickly, but all users are not created equal. While it earned $3.50 per user in the U.S. and Canada in Q1 2013, it only made $0.50 per user in much of the developing world including India and Brazil. Those emerging markets are where Facebook is getting most of its growth, meaning each subsequent 100 million users added is worth less than the last.

Growth in mobile has a similar issue. Facebook can show as many as seven ads per page on desktop whereas it has to be more careful not to overwhelm the small screen on mobile. So as Facebook’s users shift their access medium to mobile, it may earn less on each of them. Facebook is hoping that getting developers to pay for mobile news feed ads to get their apps discovered could counteract this, and that market is poised to grow as more businesses launch apps and the developing world switches to smartphones.

Overall, though, Facebook is still growing strong nine years after launch. The network effect of its ubiquity should not be underestimated. Dislodging Facebook as the premier general purpose social network will require something that’s not just better, but much, much better. Competitors might pick away at certain use cases, but are unlikely to replace it as the core identity provider for the web. Considering Facebook’s willingness to buy out threats like Instagram (which is still growing quickly in the first world), could stave off disruption and let it reign for years to come.

• Local Businesses – 16 Million – up 100% – Number of local business pages as of May 2013, up from 8 million in June 2012
• Promoted Posts – 7.5 Million – Number of promoted posts made from June 2012 to May 2013
• Revenue – $1.46 Billion – up 38% – In the first quarter of 2013, up from $1.06 billion in the first quarter of 2012
• Ad Revenue – $1.25 Billion – up 43% – In the first quarter of 2013, up from $872 million in the first quarter of 2012
• Employees – 4,900 – up 38% – As of March 2013, up from 3,539 in March 2012
• Game Payers – 24% more – Increase from March 2012 to March 2013

There’s no doubt about it. Going public made Facebook focus more on making money. It went from nearly zero revenue on mobile to $375 million a quarter, or about 30% of its total ad revenue. That in large part came thanks to the mobile app install ads it launched late last year. These let developers promote their apps in the Facebook news feed with ads that link straight to download pages in the Apple App Store and Google Play. These stores are getting more and more clogged with apps, inspiring developers to pay Facebook to get found.

Facebook also made big headway with Facebook Exchange, its retargeted ads that use people’s browser histories to show them highly relevant ads. FBX is absorbing advertiser budgets set aside for retargeting. Less successful has been Facebook Gifts, its entrance into direct e-commerce. Gifts has failed to produce meaningful revenue and may need to be overhauled to get more users purchasing real-life presents for their friends. Growth in payments revenue has been relatively slow too, as more game developers move from Facebook’s web canvas where it earns 30% to mobile, where Apple and Google get that cut.

One opportunity that should excite investors is that Facebook started showing ads in Graph Search. While they use the standard Facebook targeting now, they’re expected to incorporate keyword targeting, which could make them a more direct competitor to Google’s wildly lucrative AdWords business. The increasing technological savvy of local businesses could be a boon to Facebook in the future. Right now few of them actively buy social ads, but expect revenue to shift towards Facebook and away from less targeted print and telephone book ads in the future.

Still, Facebook isn’t trying to make as much money as it could. Another year went by without TV commercial-style auto-play video ads (though they’re rumored to be getting closer to this), and it even paused its experiment with a mobile ad network. If Facebook built out these streams it might piss some people off or make them feel like they data is being exploited, but it could definitely produce a huge boost in revenue. Off-site and off-app ad networks could let Facebook leverage its enormous wealth of personal data to power ads elsewhere so it can earn money without showing more ads on its own properties. That potential more than any is an argument for why Facebook is undervalued.

Most importantly of all, Facebook’s efforts to earn more money have not significantly impeded its mission of connecting the world. There are definitely more ads on Facebook, especially on mobile, but the data shows that they’re not annoying users enough to reduce their engagement.

Facebook has grown up. It’s no longer the red-hot startup that could double its user count every year. And it’s not the mature corporation churning out amazing profits by squeezing every last dime out of its data and usage. But Facebook has weathered the storm of going public without letting it destroy its regard for the user experience. It’s now a fundamental utility for most of the world. If it can keep from getting too greedy and stay focused on the long-term health of its community, it will have plenty of time to figure out how to turn the world’s life story into serious business.

Google and Facebook working together? They’re actually friends, in no small part thanks to Erick Tseng. The former Android leader, now Facebook’s mobile product manager, today launched the official Facebook For Google Glass app. Here he tells me about how a tiny team designed the app around simple photo sharing and Facebook’s strengthening relationship with Google.

Josh Constine, TechCrunch: What was it like getting Facebook involved in the Glass program?

Erick Tseng, mobile product manager for special projects at Facebook: It was great. I used to work at Google [as the lead product manager on Android until 2010]. We’re very close, but I have a personal relationship with a bunch of folks on the Glass team. It came out of a pretty informal chat with folks on that team. We both quickly came to the conclusion that it would be pretty awesome to get Facebook on Google Glass.

It all developed in just a few months. Two engineers built the whole app. There were no formal designers. Just me project-managing it. We got early access to some developer hardware and Google Glass prototypes. We had a very small team build a prototype [of our app]. We liked what we saw, showed it to Google, they liked what they saw, then we productized it. It was fun to work on a new platform like Google Glass.

“Our starting principle was the user experience”

TechCrunch: What was it like working on a fast-moving development platform like Google Glass? How do you think about what features to include in Facebook For Glass?

Tseng: From a developer perspective, our starting principle was the user experience. What functionality makes the most sense when you have a device like Glass sitting in front of you? What we came up with was the idea that we wanted to do things very simply and easily. You don’t want a lot of text. We started playing with it and saw photos as a very powerful user interaction with Glass. It’s natural that when you take photos on Glass, you want to share them with the people you care about. We wanted to make the photo uploading process as quick and easy as possible, so we focused on that use case. 

As we were playing with Glass, we were really impressed with voice functionality, so we added in the ability to speak a photo description that gets added to your photo.

TechCrunch: There’s a lot of other functionality you could have added. Did you run into constraints on the Glass platform?

Tseng: To be fair, it wasn’t all that much of a constrained platform, considering we wanted to do photo sharing. Photo-taking on Glass is very fast. It’s just one click to share, and one more to decide who to share with. It’s going to be an evolving platform and we’re excited to see what Google has for developers. My expectation is that over time a lot of the user functionality will get easier. 

“When you have an opportunity like this, you jump in with eyes wide open”

TechCrunch: What was it like working on a moving target, where you might not know what the device your app eventually launches on would be able to do?

Tseng: It was fun! When you have an opportunity to jump in on an emerging category like this you jump in with eyes wide open, knowing there will be some dynamics before things start settling in. We went in fully aware that this is very early and still in development, but the opportunity to build on Google Glass was quite thrilling.

We always like to think of massive scale and how we can increase happiness in our users live. With Glass, even though it’s very early, it does feel like the natural evolution of where computing is going. As it evolves from the desktop to phones to computers we wear all over our bodies, it behooves us to start only on any technology like this so we get an early glimpse of what users want.

TechCrunch: There’s no way to read the feed or get notifications on Facebook For Glass right now. Did you consider the balance between building an immersive experience and one that might interrupt and overwhelm people?

Tseng: I think it really comes down to how a device like Glass will continue to evolve in our daily lives and the role it will play. We wanted to keep it simple, but it was a no-brainer that photos are a very enjoyable use case. Starting with that was a very straight-forward decision. We’re excited to see Google’s feedback and get people to tell us what they think, what they wish the device could do in addition to photo uploading and we’ll take that into consideration.

TechCrunch: What’s it like being at Facebook and working with Google? Is there any of the animosity people think there is?

Tseng: We love working with the Google Glass  team. From the very first conversation I had with the team when we said “Wouldn’t it be great if we did this?” to launch was just a couple months. That’s a testament to both teams working very closely together to get this shipped.

More broadly, it’s often forgotten that we have a great relationship. Facebook is one of most popular Android apps today. We already work very closely on that experience as well. And then Home is the latest manifestation of that relationship.

TechCrunch: What about your previous arguments about data portability and who can import whose email contacts or social graph?

Tseng: Data importation? With the Glass team that never came up at all, so I haven’t even thought about that in this context.

TechCrunch: Is wearable computing the future of social networking?

Tseng: No, I think social networking is a broader concept. It permeates everything we do in our lives. Wearable computing is a way of helping you connect more closely and see context about what’s around you, but I think it’s a misnomer to say it represents the future of social networking.

TechCrunch: Are there specific Google Glass features you’d like to see?

Tseng: Oh yeah! I’d like to keep some of those secret for now. We want to surprise folks when they come out. This app is really our first foray into anything like a Glass form factor. We expect to learn a lot.

For the first time, Facebook users can now give star ratings to movies, TV shows, and books. That data could help Facebook show more relevant content and results in news feed and Graph Search. The feature comes alongside Facebook’s announcement that it’s finished rolling out “Sections” that show what apps you use. Sections let people express themselves and gives developers a new way to grow.

Facebook first started testing the new Sections in mid-March as part of a redesigned Timeline with all user posts in the right column. Now all users have the cleaner looking Timeline with posts and Sections divided rather than mixed up. Down the left column, each content type and app gets its own Section, which you can configure in your profile’s About tab. The Music Section displays what musicians you Like, the Spotify Section shows off what songs you’ve been listening to, and the OpenTable Section features restaurants you’ve favorited or recently ate at.

Right now Facebook is trying to get more of your opinions codified in its graph, and Sections with ratings are a big step in the right direction. As I wrote, Sections and now ratings could be a data goldmine for Facebook’s Graph Search, as they encourage people to forge connections with apps and media they care about. Graph Search relies on those connections to generate and sort search results for queries like “Movies my friends Like”. Facebook would know to show your friends’ five-star rated movies above lower rated flicks they’ve Liked.

For developers of content consumption apps like Spotify, Hulu, GoodReads and more, Sections will offer another way to grow beyond posts to the news feed. Considering people add 200 million items to Sections each day and it only just reached all users, the growth opportunity could be signficant.

Facebook now has an Insights dashboard specifically for showing developers how much traffic they’re getting from sections. Facebook says “more than 17 billion songs have been added to people’s music sections through Likes and listening activity from apps.” Now Rdio and Spotify can track how those sections are netting them new users.

If Sections catch on and people properly curate them, scrolling through a friend’s sections could be a great way to discover new art and apps. Meanwhile Facebook gets to chow down on the data you volunteer. Give Game Of Thrones a five-star review? Facebook will know to show you more of its Page’s updates in your news feed than a show you Like but only give three or four stars to. Add RunKeeper to your visible app sections and Facebook will probably show you more runs posted by friends.

The fact is that the apps we use and the media we consume are becoming an important way we express ourselves. Facebook wants Timeline to tell you life story, and that story would be incomplete without this data.

We recently wrote about an app for Google Glass that lets you share photos to Facebook, but another one has come out that has a way more interesting feature, the ability to create status messages or comment on on the social network with the sound of your voice.

ThroughGlass gives you more opportunities to interact, rather than simply share. You can post a status update, then see all of the comments and likes that come in. If you want, you can even reply to the interactions you’re getting using the same voice commands.

The app was built by Drew Baumann and Andrew Skotzko, and they’re calling it the best Facebook app for Glass…until Facebook releases one of its own:

Just launched the best Facebook app ever** w/ @askotzko for Google Glass. throughglass.io

**Until FB +1’s me—
Drew Baumann (@DrewBaumann) May 14, 2013

I’ve found that voice commands, for Glass or on any mobile device, are only useful for utility purposes, such as asking for directions or providing a search. However, for the first time, I’ve found that sharing a quick thought using the device might be useful. ThroughGlass is closer to something that Facebook would build itself.

Once you install the app and turn sharing on for it, it gives you the option to “pin it,” which tosses it under all of the pre-installed Cards that Google provides you with. That way, you have instant access to the app, whenever you want to share a status update or photo:

Tap status update, and then you’ll get the dialogue to start speaking your mind:

Once you share your update, it will show up on Facebook like any other update would, allowing people to comment and like it:

As people start interacting, you’ll be alerted on Glass and then given the opportunity to reply, which is what makes this app really useful:

This is an example of the incremental improvements that we can expect for Glass apps, as developers start exploring the Mirror API. For example, this is the first time that I’ve seen an app utilize the “pin” functionality, something that is akin to adding apps to a dock. As we wait for official apps from Facebook and Twitter, developers are trying to bring the future to Glass wearers now.

If you want a digital detox, you’re going to have to pull the trigger yourself. Social Roulette is an app that would delete one in six users’ Facebook account data, but its founder confirms it’s been blocked by Facebook so it no longer functions. While there’s no specific policy prohibiting apps from deleting your data, Social Roulette is clearly counter to Facebook’s mission and business model.

Social Roulette launched on Saturday as an online version of Russian Roulette, the lethal real-life game where a player places one bullet in a six-chamber revolver pistol, spins the cylinder, and fires the gun at their head. You die, you lose. But on Social Roulette, it’s implied that having your Facebook account deleted means you won. If you’re hit that one in six chance, the site explains “we can completely remove all your posts, friends, apps, likes, photos, and games before completely deactivating it.” Otherwise, it just posts to Facebook saying you survived the game, and encouraging your friends to risk their digital lives.

Social Roulette describes itself, saying “Everyone thinks about deleting their account at some point, it’s a completely normal reaction to the overwhelming nature of digital culture. Is it time to consider a new development in your life? Are you looking for the opportunity to start fresh? Or are you just seeking cheap thrills at the expense of your social network? Maybe it’s time for you to play Social Roulette.” Co-founder Kyle McDonald tells me he came up with the idea a few weeks ago, but hacked it together in just four hours with Jonas Lund and Jonas Jongeja after Lund had an idea for how it could actually work.

The app capitalizes on exhaustion with social networks. The dizzying stream of information, constant success theater, and perceived “responsibility” to be contactable can grow tiresome after a while. When I asked co-founder McDonald about the philosophy behind Social Roulette, he told me,”Everyone talks about deleting their Facebook account, but we rarely take action. Sometimes we need a simple game to help take the responsibility off our shoulders, and provide a moment for reflection. Social Roulette is more of a provocation rather than a tool.”

Social Roulette seemed to be looking for a fight, considering it’s selling t-shirts of its logo, which rips off Facebook’s and sticks it inside a chamber of a six-shooter pistol. Facebook has aggressively pursued others who’ve tried to coin off of its trademarks. Facebook has also recently shut off API access to apps it perceives as competitors like Vine, as well as ones like Voxer that don’t share much back to it.  Facebook has also blocked apps without specifying a reason but that have been accused of spamming like Path.

Now McDonald tells me, “It took us 4 hours to create the project, and it took another 4 hours after the launch for Facebook to respond by blocking the API key and restricting our ability to create Facebook applications. The app was flagged by an automated system for ‘creating a negative user experience.’ After review, they decided they don’t like our logo either. We tried to follow the branding guidelines but we must have misunderstood them.” You could say the shut down was a bit murky as there’s not a specific platform policy that the app’s data deletion function violates, but Facebook typically enforces the spirit, not the letter, of the law. It might end up adding a specific provision banning apps that focus on deleting your data.

Facebook tells me in an official statement, “We take action against apps that violate our platform policies as laid out here: https://developers.facebook.com/policy/, in order to maintain a trustworthy experience for users.” It didn’t specify which policy, though. However, the app did allow users to circumvent Facebook’s account deactivation feature, which is designed to let people turn off their account but turn it back on later without losing their content and connections. This could be considered a violation of Facebook Platform Policy I.3 that states “You must not circumvent (or claim to circumvent) our intended limitations on core Facebook features and functionality.”

This brings up the larger issue of where Facebook draws the line when determining when something is too close to its native functionality. Some developers believe the Facebook Platform is unstable because of Facebook’s power to pick and choose who can do what.

Without API access, Social Roulette can’t let people login with their Facebook account, or delete content from their profile. Surprisingly, McDonald is optimistic that Social Roulette will win Facebook’s approval and live on to kill another account. “We’re currently working to address this and other issues and expect a return to normal service some time this week.”

I wouldn’t hold my breath, though. Facebook’s goal to connect the world and earn money through advertising based on their personal data is directly threatened by Social Roulette. Facebook purposefully makes deleting your account tough so you don’t do it in a momentary fit of anger. Even if it receives jeers for shutting down apps at will, it’s not going to put that gun in any third-party developer’s hands.

Facebook didn’t realize just how important widgets, docks, and app folders were to Android users, and that leaving them out of Home was a huge mistake. That’s because some of the Facebookers who built and tested Home normally carry iPhones, I’ve confirmed. Lack of “droidfooding” has left Facebook scrambling to add these features, whose absence have contributed to just 1 million downloads for Home since launching a month ago.

As I wrote in November, Facebook has been desperately trying to get more employees “droidfooding” — carrying and testing Android devices. You can see the posters encouraging employees to pick up a droid below. The issue was that Facebook handed out iPhones to employees for years. Facebookers could request an Android handset, but otherwise would basically get an Apple phone by default. That wasn’t as dangerous years ago when the iPhone still had more marketshare and Facebook users, but since then Android has rocketed into the lead. If Facebook wants to reach the largest audience, it needs employees living and breathing Google’s mobile operating system.

The lack of droidfooders didn’t have serious consequences until Home, Facebook’s new “apperating system”. It replaces the lock screen, homescreen, and app launcher of compatible Android phones with a Facebook-centric experience. It offers Cover Feed, a big, beautiful way to browser the news feed the second you bring your phone out of sleep. It’s missing the ability to build real-time information widgets, put your most used apps in a persistently visible dock, or organize your collection of apps into folders.

When I first tried out Home, I admit I was wooed by Cover Feed and Chat Heads, while those absent Android personalizations didn’t phase me. Why? Because I’m an iPhone user.

First off, the iPhone doesn’t offer widgets at all, so I didn’t really know what I was missing. Second, I was running Home on a brand new loaner “Facebook Phone”, the HTC First. I didn’t expect to be able to port my iOS dock and folders to Android. I accepted that my experience would be somewhat unpersonalized. I was naive.

The real problem? Facebook’s developers were just as naive. Employees I’ve talked to admit that iPhone users testing Home made Facebook fail to see how wrong it was to overwrite people’s widgets, docks, and folders. Unlike working on some standard app, sticking a new Android device in an employee’s hand to test Home wasn’t sufficient. It needed long-time, diehard Android users — something Facebook doesn’t have as many of internally as it would like.

On Thursday at Facebook headquarters, VP of Engineering Cory Ondrejka and Director of Product Adam Mosseri admitted this is a critical flaw in Home — one that’s dissuading people from downloading or actively using Home, and that’s inspiring the 1- and 2-star reviews dragging down Home’s rating the Google Play store. Those reviews, people’s unwillingness to trade their personalized launcher for Home, other problems, and Home’s invasiveness have caused Facebook’s apperating system to slip far down the charts. It’s dropped out of the top 100 apps according to several analytics providers, as Sarah Perez detailed yesterday.

“There a lot of feedback that not having a Dock on Home is an issue” said Ondrejka. So instead of spending its first few monthly updates enriching Home with a better status composer or starting to monetize it with ads, Facebook’s team is backtracking. Instead of pitching Home as something that  ”replaces the lock screen and home screen”, Facebook is shaving it down into a thinner layer on top of your existing phone.

To do that, first Facebook will offer a more in-depth new user onboarding experience that illustrates exactly how to access your other apps. Next, it will introduce “Dock”, pictured on the right. It’s a way for users to import their old navigation bar of their four most frequently used apps. Mosseri tells me Facebook doesn’t want users to have to sacrifice the work they did customizing their Android in order to use Home. Eventually, expect Facebook to add an app foldering system or folder importer to Home, as well as a way to display widgets.

“We wanted to ease the transition from your old launcher to your new launcher,” said Moserri of the planned changes. Facebook would have known to make that s priority before Home launched, but its iPhone culture meant there was no one to cry foul. Team members didn’t have old launchers to transition from.

Home has big potential. People who do get by its shortcomings and settle into Home see a 25% increase in the time they spend on Facebook. But it’s stuck at under 1 million downloads and likely many fewer active users because its overly aggressive invasion of Android scares people away.

Never has it been more apparent. If Facebook can’t get Androids in more pockets at 1 Hacker Way, it will continue to misstep in mobile.

Facebook Home, the app which CEO Mark Zuckerberg touted as the “next version of Facebook,” has not been an immediate hit. Its Google Play rankings have been dropping steadily after the launch buzz wore off, according to new data from top app store analytics firms. Despite having an active user base of over a billion on the social network itself, the company announced on Thursday that it was just now “nearing” 1 million downloads for its Home app. Plus, AT&T also slashed pricing this week on the HTC First, the first Facebook Home-powered handset, which went from $99 to just $0.99.

The data shows it’s been a struggle so far, in terms of user acquisition, for Facebook Home. The lack of support for widgets, docks, and app folders seems to be the central barrier to downloads, active use, and recommendations.

The application became available for download on April 12th on Google Play, where only a limited selection of devices were supported: the  HTC One X, HTC One X+, Samsung Galaxy S III and Samsung Galaxy Note II. A preloaded version of the app was made available via the HTC First, which officially went on sale that same day. This week, support for the HTC One and Galaxy S4 was also added.

To be fair, the limited rollout is partially responsible for the app’s inability to maintain a higher ranking.

On April 24th, Facebook Home reached its best position on the charts in many of the countries where it was available, but its ranks have declined in several key markets since. Its moves indicate an early rush from curious Android owners, but then a tapering off as word got out that the app wasn’t quite ready for primetime.

App Annie’s data demonstrates this rise, then subsequent fall. Shortly after becoming publicly available, Facebook Home reached #72 overall in the U.S., on April 16th. By April 23th, it had also reached the top 100 overall in 8 countries (Norway, Singapore, Canada, Denmark, Australia, Hong Kong, Hungary, U.K.), and the top 500 in 38 countries. By the end of April, it started to drop, then ranking in the top 500 in 29 countries, and having dropped out of the top 100 worldwide altogether.

It has yet to return to the top 100 in any market.

Distimo’s analysis of the top 500 apps on Google Play, also confirms the same general trends. Towards the end of April (4/29), the firm found that Facebook Home was ranked highest in Luxembourg, where it was #83 overall, and was lowest in Portugal where it was ranked #477, but its ranking was on the decline.

In the chart below, you can see Facebook Home’s top ranks as of 4/29 as well as its ranking change since just a few days prior (4/24), indicated by the small number at the top of each country’s bar.

As of a few days ago (5/8), Distimo found that the picture for Facebook Home has gotten even worse. In key countries including France, Germany, Brazil, and Argentina, Facebook Home remains out of the top 500 overall apps.

And the number of countries where Facebook Home is even ranked is fewer still. (Compare the number of bars in the chart below to the above).

You can also see the ranking decline for the U.S., Germany and Australia, pictured below as a line graph.

App Annie confirms this decline, too. As of May 10th, their data shows Facebook Home is only in the top 500 in 19 countries. And it’s not close to breaking the top 100 in any of these, with #191 being its highest ranking – and that’s in Norway.

Most countries are somewhere in the 300-400 range – for example, the U.S. is #338.

Still Time To Recover? 

This is not what you would call a hit.

Even Facebook itself fudged its numbers when discussing Facebook Home traction earlier this week, noting that the app was “nearing 1 million downloads.” Those are downloads, not actives. And as the above data indicates, the app is losing steam on the charts.

That being said, for those who adopt Home, engagement soars. To summarize an earlier report: among those who use the app, 25 percent more time spent on Facebook as a whole, with comments and likes up 25 percent, Chat usage up 7 percent, and messages sent up by 10 percent.

But the goal now is to get more people to download – and then not abandon – the application. Facebook admitted that the replacing people’s custom widgets and app folders was a mistake. [Update: And as Josh Constine writes, that mistake was in part due to Facebook's iPhone culture. Some of the Facebook employees building and testing Home were regularly iPhone users, and didn't realize how big of an issue the missing customizations were.]

Facebook outlined its plans for getting Home back on track, saying it will soon offer a better onboarding experience for new users, add an icon dock (the tray of favorite apps at the bottom of your homescreen), make it easier to initiate chats with a new “Dash Bar,” and will work towards becoming more homescreen layer than replacement, so as not to disrespect the work users have done in customizing their phone.

Time well tell whether or not Facebook can make these changes in time, before it loses further mindshare among early adopters who are now spreading word that the app is a flop.

“House Of Cards” proved that great, exclusive content can create loyal customers. While Facebook isn’t about to produce TV shows, it tells me that it plans to ramp up production of its Facebook Live original programming starting with a talk with Star Trek celebrities today at 5:15 p.m. PST. Comedian Andy Samberg will interview film director JJ Abrams and classic cast member and social media maven George Takei.

Randi Zuckerberg, CEO Mark Zuckerberg’s sister, started Facebook Live in 2010. A website and Facebook app powered by Livestream, Facebook Live streams talks and offers an archive of past video clips. Users can discuss the videos in real time with other users and ask questions. Facebook Live moderators then pick from submitted questions, name-check the people who ask them, and pose them to the celebrities.

It featured Randi’s interviews with celebrities, as well as instructional talks on Facebook’s products and marketing tools. Later it would host Facebook’s election coverage, including Barack Obama’s town hall talk at Facebook headquarters in 2011. Over the years, Oprah Winfrey, Vin Diesel, Madonna, astronaut Ron Garan, and Israeli President Shimon Peres all came on the air.

For the last six months, though, Facebook Live has been pretty quiet. Since Bravo’s Andy Cohen interviewed Rihanna in November, the only video it’s added was from the Facebook Home launch event. While fascinating to tech insiders, there wasn’t much wide appeal.

But now, the social network is putting Facebook Live back in gear. A Facebook spokesperson for the project tells me “Facebook Live is something we’ll be utilizing more.” While more shoots haven’t been lined up, they should come at a brisker pace.

Why invest in original programming? “The purpose of Facebook Live is to give fans an opportunity to interact with public figures and give the public figures a global platform to present how they are using Facebook [or are engaged in conversations happening on Facebook] in an authentic way,” is the rather dry answer I got from the spokesperson.

But digging a bit deeper, Facebook Live accomplishes several strategic goals for the team at 1 Hacker Way. First, it can turn fans of the stars that Live brings on air into more frequent Facebook users. On the flip side, it can turn celebrities into more hard-core Facebook content creators. Facebook wants to be the place where people follow their favorite public figures, but it needs them posting frequently.

Most importantly, though, it demonstrates Facebook’s potential as a live events discussion platform. Becoming the second screen to important global events can generate tons of time-on-site and engagement. This has historically been Twitter’s domain thanks to its unfiltered, real-time feed, but Facebook wants a piece of the pie.

If you have a great time chatting with other Star Trek fans today, maybe you’ll choose Facebook to discuss the next Star Trek TV show premiere rather than on its 140-character competitor. With the potential to promote them to a billion people, Facebook shouldn’t have much trouble getting the world’s VIPs into the revamped Facebook Live studio.

“Home is the first product we’ve released that’s really about ‘mobile-best’ and the transition beyond ‘mobile first’” said Facebook’s VP Cory Ondrejka. To further that, Facebook previewed some new features Home will get eventually including a “Dash Bar” buddy list for starting chats, an improved “Dock” for your favorite apps, and a better “new user experience” onboarding flow.

Later today around 3pm PST, Facebook will release its first update for Home in the form of a Google Play update to Facebook For Android (which hosts some nuts and bolts of Home). The update is predominantly performance and bug fixes, and doesn’t include these new features mentioned above. Dash Bar, Dock, and NUX will come in future monthly updates, but no specific schedule has been revealed.

As for ads in Home, VP Of Mobile Engineering Ondrejka says there’s no timetable for that yet either. “We know we’re going to do ads in Home, but there are steps we need to take before we do that so they fit into Home’s aesthetic and they’re beautiful. We’re not ready yet” said Ondrejka.

Home Makes People Use Facebook 25% More

Ondrejka gave a momentum update at the “Home Whiteboard Session” today at Facebook’s headquarters in Menlo Park. He explained that Home is nearing 1 million downloads, and users’ favorite features are Cover Feed and Chat Heads. Those who’ve download Home spend 25% more time on Facebook as a whole. That stat alone could mean Home is a success, and has a lot of potential to benefit Facebook in mobile. Home also increases the number of daily comments and Likes someone leaves on the news feed by 25% too. Meanwhile, Ondrejka said that Chat Heads increases participation, or the raw percentage of people who use Facebook Chat, by 7%, and it increases messages sent by 10%.

However, there were a few main complaints in Home’s Google Play, which I detailed on Tuesday. Specifically, people don’t like losing the personalization they’ve already done on their phone. They don’t want to lose their widgets, app dock, and folders. Users also said it’s too difficult to start a Chat Heads conversation. Finally, some users get confused about where their old Android app launcher went. Facebook will address these with a few new features.

Future Changes To Home

NUX

Facebook will add a better “NUX” or new user experience that it internally refers to as “Blue’s Clues”. When users first install Home, they’ll get a deeper walkthrough of how to use gestures to reveal their app launcher, chat, and use other features. Little blue instructional boxes pop up as you first navigate through Home. They explain what a button or gesture does, and encourage you to try them to continue through the tutorial. This should reduce confusion and frustration, and get more people to give Home a chance.

Here’s a Vine of Facebook Director Of Product Adam Moserii previewing the new onboarding experience.

Dock

A new app dock will be added to Facebook Home’s app launcher. Android users gave feedback saying they enjoyed the tray of favorite apps that always sits at the bottom of the launcher. Home got rid of that, but in future versions, Mosseri tells me users will be able to import their old dock, and possibly build one from scratch. When you swipe up to access your apps, the Dock tray will appear locked at the bottom, similar to the persistently visible Dock at the bottom of the iOS homescreen. You can the Dock in Home in the photo on the right.

Dash Bar

To make starting a conversation fast, Facebook will add a Buddy List into Home. Before, you had to swipe left to open the full Facebook Messenger app to start a new conversation. With Dash Bar, when you swipe left it will instead create a Chat Head bubble that contains an overlaid Buddy List where you can get an instant look at all your friends and see which ones are online to chat with. Then you can initiate a conversation with them, all from a screen over the top of Cover Feed rather than within the Messenger For Android app.

Respecting Your Old Phone

Facebook seems to have realized that people spend time customizing their phone experience. They don’t want to sacrifice it for Facebook Home. They want both. This previewed slate of changes will help Facebook respect the phone you already personalized. This is a shift from Facebook Home as a homescreen replacement to a homescreen layer. If Facebook can pull it off, users won’t have to choose between apps and friends. They’ll have both at their fingertips.

Facebook appears to be close to making another billion-dollar acquisition to once again ramp up its mobile efforts: according to three reports in the Israeli press at Calcalist and sister publication Ynet and The Marker (all in Hebrew), Facebook has approached Waze, the social mapping and traffic app maker, and is now in advanced due dilligence on a deal that Calcalist puts at between $800 million and $1 billion. The negotiations between the social network and crowdsourced mapping app apparently began six months ago.

We have been digging too and have picked up confirmation from a source that both sides have privately confirmed that the deal is happening, and that the pricing reported first by the Calcalist is accurate. The main issue right now, the source said, is whether to keep Waze in Israel or take it to the U.S., as Facebook did with two previous Israel acqusitions. Those were of feature phone interface developer Snaptu (bought for up to $70 million in March 2011) and facial recognition specialist Face.com (bought in June 2012 for $50-60 million).

But! Facebook and Waze have already come back to us with flat non-responses. “We do not comment on rumors or speculation about the business,” a spokesperson at Waze told TechCrunch. The company tells me that it currently has over 47 million active users — more than double what it had in July last year when it reported 20 million.

“We won’t comment on speculation,” a Facebook spokesperson said.

However, if the rumors are true, adding Waze to Facebook makes a lot of sense in some respects: Facebook has been putting a lot of effort into its mobile business, which now has 751 million monthly active users as of March 31, 2013, an increase of 54% year-over-year. That puts mobile on a faster track at the moment than Facebook’s desktop business, which currently has 1.11 billion MAUs, an increase of 23% year-over-year.

The most recent of its movements on mobile services is Facebook Home, an Android-based launcher that lets a user embed a connection into their Facebook social graph across their entire mobile experience with services like the ever-present Chat Heads. On another track, Facebook has for years now been building up a business around location-based check-ins, which also include local deals. A service like Waze, with social networking and crowdsourcing of information part of its DNA, fits perfectly into that landscape.

This would not be Facebook’s first 10-figure acquisition in the mobile space. Just over one year ago, leading up to its IPO, Facebook bought Instagram for $1 billion, a deal that had a large portion in stock and ended up being worth more like $747 million when it finally got approved. That, too, gave Facebook a big leap into mobile services: while Instagram these days also has a handy way of viewing profiles on the desktop web, at its heart it is a wildly popular mobile app that for many works as a social network in its own right.

Nor would this be the first time that Waze has been in the crosshairs of acquisition rumors. One deal that was hotly reported by many, including us, involved Apple buying the mapping company. Of course that ended up not happening, although the two clearly were talking a lot because Waze ended up being a significant part of Apple Maps. The startup has raised $67 million in VC funding from backers including Kleiner Perkins, BlueRun Ventures, Magma Venture Partners, Vertex Venture Capital, and Li Ka-shing.

Facebook earlier this year reported that it passed 1 billion users, and it’s likely that the next billion will not be in the U.S. Waze has around one-third of its users in the U.S. with the rest worldwide. Facebook’s past acquisition of another Israeli startup, Snaptu, which develops services for feature phones, was another deal that helped the social network tackle the burgeoning population of mobile users in developing markets; Waze, however, would help the company take aim specifically at smartphone users.

While Waze’s R&D is in Israel, its U.S. offices, and its CEO Noam Bardin, are based in (Facebook’s old haunt) Palo Alto, where the firm recently redecorated its front window.

Photo credit: Julie Mossler
H/T: Hillel Fuld

Facebook may be trying to sweeten the deal to get Home into more hands, or AT&T and HTC might just want their money. But for some reason, the Facebook Phone aka the HTC First’s price has dropped from $99 to $0.99 on contract less than a month after its debut. Considering it comes with unbloated stock Android and a speedy LTE connection, that could be a bargain.

Facebook tells me “We think this is a good move by AT&T and have highlighted the new price on our Facebook Mobile Page.” AT&T is also running a discount special on the popular HTC One and Samsung Galaxy S4, so this might not be as much a reflection of the First’s momentum as an overarching move on the carrier’s part. Plus, all phones get price drops eventually.

Facebook has maintained that it’s committed to working with manufacturers on handsets, so don’t expect this to be the last Facebook Phone. But it seems Home wasn’t a strong enough selling point to convince tons people to buy a phone with a soggy camera – my main gripe about the HTC First. The 5-megapixel lens did a crummy job in low light, and Home buries the controls for the camera making it harder to catch candid shots.

Fewer than 1 million people have downloaded Home for their Android phones, and many fewer may have been willing to pay $99 for a phone with it. But Home will get better, and so will any phone carrying it. As I wrote yesterday, I expect Facebook to address the main complaints about the “apperating system” in its monthly updates. Specifically, I’d bet on a deeper onboarding flow to make Home less confusing, and a way for it to preserve your widgets and homescreen app folders rather than completely replacing them as it does now.

If Home improves soon, or HTC releases another version of the First with a better camera, I think sales of the brand could pick up. Facebook might want to draft some new commercials in the meantime, though,  as the last few made the First and Home seem like a non-stop barrage of interruptions.

Are You Interested has been in the online dating game since 2007, predominantly focused on the Facebook platform as a way to connect people through the internet. The company has been relatively quiet in the past year, but is now speaking up after launching a new feature in the past few weeks that connects you with friends of friends.

Other online dating startups have added similar features — Coffee Meets Bagel in particular comes to mind — but AYI is the first company with any true scale to implement the feature. And according to founder and CEO Cliff Lerner, “the results have been nothing short of tremendous.”

There are over 20 million Facebook profiles connected to AYI and 3 million active users per month, making it one of the largest and most relevant dating sites in admittedly, a sea of matchmaking wannabees. And since they implemented their friends of friends feature in March, AYI boasts that over 2 million connections have been made through the new feature. Over 72,000 users have been directly messaging their friends to ask about a potential date. Of course, we don’t really know how many connections AYI makes on a monthly basis, so we can’t conclusively say if this friends of friends feature is as popular amongst AYI’s users as the company makes it seem. Still, 2 million is a pretty big number.

AYI is simply capitalizing on a trend that been permeating through dating sites as of late. Matching friends of friends is the “next big thing” of online dating, and there have been a number of startups that have been clamoring for attention with this as their headline feature. At the Entrepreneurs Roundtable Accelerator’s NYC Demo Day this year, one of the startups in the ERA’s graduating class was Acquaintable, a dating startup that links to Facebook and matches friends of friends together. It’s a shame that AYI seems to have stolen its thunder with its already well established user base.

Another little startup that’s been around since last year is Coffee Meets Bagel, and it could be said that they were the first ones to match friends of friends together, albeit at a much smaller scale. Like clockwork, every day at noon Coffee Meets Bagel introduces you to one of your mutual friends. It’s kind of like a “daily deals” for dating.

The appeal of matching mutual friends together, and the reason why it’s taken off to such a degree, can be summarily condensed to one word: honesty. When AYI polled its users last year, the results displayed widespread dissatisfaction. “People were disenchanted with current dating experience,” says Lerner. “Especially women.” 56 percent of their polled users didn’t enjoy online dating, including 77 percent of women. A majority of users said people lied on their profiles.

It’s true. When you’re hiding behind a computer, anyone can make themselves to be some kind of dreamy, Jon Hamm-clone. What AYI found when they introduced their friends of friends feature was that honesty was suddenly a problem their users didn’t have to worry about anymore. People were less liable to lie on their profiles when they were connected to potential mates through their friends. “People prefer to meet through their friends,” says Lerner. “It’s logical and it just makes sense.” AYI claims that 41 percent of their female user base are more likely to message a man when they have mutual friends.

If anything, AYI’s self-proclaimed success with friends of friends tells us that this new method of matchmaking is here to stay. Expect to see a friends of friends feature making its way to your own personal dating network very, very soon.

Cisco Meraki has launched a new service called Presence that provides data about mobile behavior across location and automatic log-in to wireless hotspots using a person’s Facebook account.

Presence additionally provides an API that allows integration with real-time location data into CRM and other business systems. Presence also allows for third-party data integration that can be analyzed with location-based information.

Meraki was acquired by Cisco last November for $1.2 billion. According to Josh Constine’s post, Meraki began as a research project at MIT in 2006. It provides mid to large-size companies, schools, and organizations with on-premise mesh Wi-Fi networking and security devices plus the software to manage them. Its technology is now integrated into Cisco access points. According to the blog, with Presence, customers get an analytics dashboard that displays real-time metrics such as capture rate, median visit length, and visitor repeat rate for mobile devices in proximity to Meraki access points.

The service has uses in retail to give a marketing manager access to data that may show how long they look at a window display or if an in-store promotion drew them to the store. That data can then be correlated to revenue data and third-party CRM data.

Cisco and Facebook have also partnered to let guests log-in to Wi-Fi networks with their Facebook account. This seems pretty unique and an example of how Facebook is becoming a universal identity provider. It benefits the client who can use the Facebook login to make it simpler for their customers to get wireless access.

Now just think of what all this additional data provides to Facebook. They get data to target ads for the retail customer or perhaps a coffee shop down the street that wants to draw traffic with a special drink offer for a dry latte with extra foam.

Privacy. Well, this is the elephant in the room, isn’t it? The Meraki blog makes a point of saying they do not collect personal data. That it’s nothing more than understanding customer behavior.

In summary, Meraki collects no personally identifiable information (e.g., we don’t see or store a user’s Facebook credentials). Clients’ MAC addresses, used to construct location analytics dashboards, are hashed and truncated before being stored in Meraki’s cloud so they cannot be associated with an individual device (i.e. there’s no data stored that can show that a given device was at a specific location.) Users can also opt-out of Meraki’s Presence data collection across all Meraki networks; we won’t store MAC addresses — hashed or otherwise — and Presence events will not be passed through the API.

But here’s the thing. Data analytics is about correlating information. A retailer may not need to know who you are with one set of data. But they can always cross-reference it with other information to know exactly who the customer is, how they got there, what they did in the store and where they went after leaving.

So sure, everyone takes privacy seriously. But it’s up to the vendor and the client to be responsible in how to handle the power that they gain from all that information.

“Where did my Android go?” is the common refrain of Facebook Home user reviews. We want the widgets and old homescreen we’ve meticulously curated. That’s why Facebook needs to preserve and offer quick access to the phone we’re used to if it’s going to make Home a hit. Facebook’s reading the reviews too, so bet on the early Home updates to make it more of a bonus than a trade-off.

Facebook proclaims “Home is a completely new experience that lets you see the world through people, not apps.” But that completely new experience disrespects the work we’ve done to personalize our phones — arranging apps and putting them into folders, choosing what goes in the coveted first screen spots, and building widgets of real-time information we care about. We shouldn’t have to sacrifice so much to get Home’s added benefits.

Luckily, Facebook has committed to releasing monthly updates for Home, with the first one expected on May 12th. There are plenty of “nice” features it could add, but before Facebook decorates Home, it needs to get the foundation cemented.

Opening The Doors

I spent some time poring through hundreds of Home reviews to get a sense of the public’s perspective. Journalists and techies, including me, focused on features like Cover Feed and Chat Heads. The somewhat complicated install process didn’t faze them much. But the average Joe got quite confused when he downloaded Home only to find his familiar Android experience had been evicted.

Plenty of people like it, and say they get used to it after a while. But many of the 1-star reviews dragging down Home read like this [sic]:

• “Ugh! Not an intuitive app. Made my phone so frustratingly complicated to use that I uninstalled after just four or five hours. Unless major changes are made including an easy way to get to my home screen I will not reinstall.” - Victoria Wiley
• “It literally took over my phone. Its almost as if it a whole new OS and not user friendly.” - joe smith
• “Where are my widgets, not impressed” - David Marner 
• “It gets rid of everything u have and have to reset it” -J Erickson

Judging from these reviews and hundreds more I read, the first change Home needs is to do a better job of walking us through the transformation our phones are undergoing. Many people won’t be sure they’re supposed to select Home when asked which app to “Complete Action Using”. That should be explained up front. Then once Home is fully installed, Facebook should do a deeper tour not only of its own features, but of explaining what happened to the other parts of our phone and how to get back to them.

Preserving Personalization

Home has no widgets and no app folders, and users hate that. It won’t stay that way for long, though. Facebook Director Of Product Adam Mosseri told me when Home debuted that “There’s a lot of stuff we wanted to do in the launcher like folders and widgets. But that’s the beauty of the update cycle. We’re already working on stuff that will come out [in later versions of Home.]“‘

So is Facebook going to build its own foldering and widget-building system? Perhaps, but that doesn’t actually solve the problem prevalent in Home’s negative reviews. Users don’t want to do redundant work to re-personalize their phone.

That’s why I suspect Facebook will look for a way to integrate our existing folders and widgets within Home. This is a pretty fundamental shift for Home from a replacement launcher to a layer that rides on top of what we’ve already done to our phones. Ideally we’d be able to temporarily push Home aside to reveal our old homescreen and all our customization. Importing the folders and widgets we’ve already made into Home’s own app drawer would work, too.

Right now from Cover Feed you can swipe left for Facebook Messenger, right for the last app you used, and up to open your app favorites screen. I’d imagine Facebook would either add a down swipe to surface our former homescreens lying in wait underneath, or swap in this action for the app favorites up swipe.

With these fixes made, Facebook would get most of the prominence and immersive experience it wants from Home without forcing us to ditch our old system. That erases a huge barrier to installing and enjoying its “apperating system” and could help it grow beyond the 500,000 to 1,000,000 downloads it currently has. There’s a lot of people out there who want people to come before apps, just not instead of them.

[Image Credits: Marcio Jose Sanchez / AP, Dashburst]

As the days go by and developers get their hands on Glass, the basic apps that we need to survive in the wild and share our photos are popping up. Today, Glass To Facebook is available for those who want to post the moments captured with Glass to the social network. It’s the first third-party app that allows you

The setup is similar to that of other third-party apps like GlassTweet, but requires you to give Facebook permissions to post to your timeline. It only takes a few seconds to get going:

After you’ve turned on the Glass To Facebook sharing contact within MyGlass and approve the permissions on Facebook, you’re ready to start posting:

Just take a photo and choose the Glass To Facebook option:

The nice thing about the app is that it creates a photo album for you that will start piling up your Glass-taken photos:

Your photo shows up like any other one would in your friends’ News Feed, too. This means that all of those annoying baby pictures that you see on the daily will now come from the vantage point of the parent’s face. Exciting, I know. On a serious note, it’s nice to see photos from Glass being brought to networks other than Google+, which was the only out of the box option.

While we haven’t heard anything recently about an official Facebook Glass app, we’ve heard that there’s a team of four working on something. What could Facebook look like for Glass? We know that there won’t be ads, since Google isn’t allowing them on the Glass platform as of right now. Aside from that, I wouldn’t mind seeing a Poke pop up on the device.

[Photo credit: Flickr]

Parse, the mobile back-end startup that Facebook recently bought to set up a new developer-focused business, just launched hosting. It’s meant to help mobile developers that have a desktop web presence or companion experience on the web. The acquisition has already given Parse a boost, with the number of apps it hosts up 33% to 80,000 since the deal was announced.

“People were building mobile apps using Parse. But when they wanted a web presence or a dot-com landing page, they were using Parse for the log-in, but the website was being served from something else like Heroku or App Engine,” explained Parse co-founder Ilya Sukhar. “So we’re launching a fully featured web hosting platform.”

Sukhar said the project has been in the works for the last four to six weeks, even while the Facebook negotiations were going on.

The new hosting service lets developers host landing pages, and display user data retrieved using the Parse API. Say if a developer wants to show a leaderboard for their game on the web, they can do it using both the new hosting service and the standard Parse data product.

Parse Hosting comes on top of other products that help mobile developers manage push notifications and user identities and log-ins.

He added that the Facebook deal, which we had independently heard was worth $85 million excluding retention incentives, hadn’t scared away developers. They’re at 80,000 apps now, from the 60,000 apps they said they had when the Facebook deal was announced. “There was an interesting debate about whether people would move off Parse, but all of our metrics are up,” he said.

Facebook had won the deal to buy Parse even as many of the Valley’s best known companies like Apple, Yahoo and Dropbox had looked or expressed interest. They’re starting their very first business-to-business revenue stream through the Parse acquisition and had — like in the case of Instagram — promised the team a fair amount of autonomy to grow their products as they see fit. They’re not tampering with Parse’s SaaS-based revenue model.

He also said that the company hadn’t celebrated the deal yet. “We have a lot of stuff on our plate,” he said.

When you’re spreading like wildfire, why douse the flames to make a few bucks? Facebook’s willingness to wait on advertising helped its site and mobile apps grow massive, and now it’s applying the same strategy to Instagram. Wall Street is clamoring for Facebook to earn back the $700+ million it spent buying the photo app, but Mark Zuckerberg refuses to trade tomorrow’s dollars for today’s dimes.

It took Facebook years to get serious about ads. That’s because it was serious about growth and the user experience from day one. Facebook’s first ads were actually called “flyers” and promoted on-campus events. They fit right in rather than detracting from the value of the social network. When Facebook started selling to more traditional advertisers, the units it offered were tiny, and relegated to the sidebar so organic content could stay front and center. Compared to the loud flash banners and pop-ups found elsewhere, Facebook seemed like a sanctuary. The strategy helped it quickly grow to hundreds of millions of users.

Facebook launched its iPhone app in July 2008. For over three years, not a single ad was shown. The world was starting to go mobile, and Facebook wanted to welcome it with open arms, not greed. In 2010 and 2011, Facebook’s smartphone apps were growing at a stunning pace to become the most popular things on mobile. Clogging them with ads could have stunted growth when it had the most momentum.

By the end of 2011, both Facebook for iOS and Android had over 57 million daily users, and almost twice as many monthly users. There was no guilt in telling a friend to go download the apps. They weren’t necessarily the fastest thanks to their reliance on HTML5, but they didn’t waste limited real estate on squeezing money out of advertisers.

It wasn’t until early 2012 that Facebook finally announced it would start showing ads on mobile and the desktop news feed. By then an overwhelming percentage of people in the developed world were already using its site and smartphone apps. User growth in its most important markets like the US, UK, and Canada had slowed to a trickle. Growth was predominantly coming from the developing world where people use Facebook’s feature phone apps.

When it finally started showing ads on the web feed, iOS, and Android, Facebook had a lot less to lose. It didn’t need its apps to be as viral and add as many users in the first-world any more. It just needed to make sure not to drive people away from them. Ads started appearing, slowly at first as Facebook gauged reactions, and faster as it saw people weren’t browsing the feed significantly less because there were a few ads in the middle.

Long story long, the strategy has worked. Facebook could surely have an extra billion in the bank if it monetized earlier. But it might have sacrificed millions of users and positive connotation to get that money. Still, it’s been a bit of a surprise that a year after acquiring Instagram, Facebook said on this week’s earnings call that there’s no plan yet to show ads on the photo app. That’s not for lack of demand, Zuckerberg said:

“Instagram, they’re really doing well and growing really quickly, and I think that that is the right focus for them. And they have this opportunity to capture and basically build off this huge community and I think that that should be 100% of the focus right now. I am really optimistic about the business opportunity there, too. You already have a lot of brand from folks who advertise with Facebook putting content into Instagram, getting huge engagement rates. So people are coming to us and asking for ways to make that even richer and it’s something that we’re thinking about. But right now, I think that – I’m just really proud of the team and excited about how quickly they’re growing. They’re growing a lot faster now and were faster to get to 100 million than Facebook even.”

Perhaps when Facebook’s given Instagram enough time to grow, and it figures out how it wants to the advertising experience to work, we’ll see it monetize the acquisition. It has plenty of options for how.

Instagram could show glossy photo brand ads in the feed, but might try to avoid forcing users to click out to a browser to follow the ads. That’s why I’d expect Instagram to start with ads that help businesses get more followers and keep users bouncing around the app.

Businesses might pay to get the photos they post to their accounts showed to people who don’t currently follow them. A social version of these follow ads might target friends of or people who follow people who follow a brand. Yes, that’s a mouthful. Another option would be allowing brands to amplify the reach of user posts that tag them using Instagram’s new photo tagging feature. If I tagged Nike in a photo of my shoes, Nike might pay to show that post at the top of my friends’ feeds or show it again a week after I originally posted it in hopes of attracting more followers.

Instagram could also try Suggested Accounts that ask people to follow certain brands similar to Twitter’s Promoted Accounts ad unit. App install ads which let developers pay to get their apps shown in the feed and downloaded have become Facebook’s new darling, so they could make their way to Instagram too.

Facebook and Instagram can afford this growth > ads strategy because its thinking long-term. Not long-term like Google with its moonshots, but Facebook is confident they’ll be dominant in their fields for at least a few years. Their large userbases and network effects luckily afford them a bit of a moat. It’s still a gamble, though. There’s always the risk that by the time Instagram starts advertising, something new in the media capture space will be stealing the attention of its users. It’s a tightrope to walk, but one that leads to a healthy community, quality experience, and a sustainable business model.

[Image Credits: Metrowest, MacStories]

BeTheDancer is Alex Greenburg’s name and handle on Instagram. He’s a good friend and a brilliant photographer, but because Instagram doesn’t require real names, I had a lot trouble using the app’s new tagging feature to point him out in my photos. Right now, Instagram’s 100 million users are discovering that while pseudoanonymity can be fun, it’s not always  functional.

On Facebook, you’re told to use your real name, and most do. That makes it very easy to search for and friend people. Mark Zuckerberg knew the social graph depended on you being you, and saw how Myspace’s lack of real name policy made it a haven for impersonators and unaccountability.

When Kevin Systrom and Mike Kreiger started Instagram, it wasn’t meant to be your meatspace social graph or the online copy of your personality. It was just for smartphonetography. You entered your handle and your “name”. Neither had to be your real name.

Some people still use their birth name or a shortening of it as their username. I’m joshsc, for example. And many do put in their actual first and last name. But many others don’t add their real name and just go by a pseudoanonymous handle. Thanks to Facebook’s Find Friends feature it hasn’t been so hard to follow them, though.

But today Instagram launched photo tagging, where you have to tap someone’s real name or handle into a typeahead to say they’re in an image. That gets a lot tougher if they don’t have their real name attached to their account. I didn’t think to search for Be The Dancer when I wanted to tag my buddy Alex in a portrait I shot of him a year ago.

Over the next few days, Instagram users are going to be annoyed inundated with frequent notifications that they’ve been tagged in photos. But I’d bet those who go solely by pseudonyms will get a lot less. Tacking true identity onto a two-plus year-old social network doesn’t come easy. It could even steal a bit of the carefree atmosphere that’s made Instagram such a refreshing alternative to Facebook.

But one thing photo tagging will certainly do is strengthen Instagram’s social graph. After going to name a few friends in my photos, I realized I wasn’t following many of them. I opened the Facebook Find Friends feature and found hundreds of chums had joined Instagram since I last checked. I followed a ton of them, because Instagram isn’t just about photos anymore. It’s about the photographers, and the subjects who inspire them.

Facebook says that there are no plans for now to add advertising to Instagram, even though advertisers are approaching them, CEO Mark Zuckerberg said today during the company’s Q1 earnings call. Adding ads could end up stunting Instagram’s rapid growth. He said, more than once during the call, that Instagram is currently growing at a faster rate than FB did at the same age, and it now has 100 million users.

“They’re really doing well and growing quickly and that is the right focus for them,” Zuckerberg said. “They have the opportunity to…build community. I am really optimistic about the business and the opportunities.” But he also noted that “big brands are approaching us” about doing more on the platform — perhaps commercializing more, is the implication here. Instagram is already a pretty substantial marketing platform.

Facebook faced an outcry last year when Instagram updated its terms of service, with many concerned about how Instagram would get commercialized, specifically around selling ads against users’ photos. The company ended up reverting back to its original terms. At the time, Instagram co-founder Kevin Systrom noted,

“Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.

On one hand, the decision to hold off on adds on Instagram runs counter to how Facebook has been running the rest of its mobile business. The company has been focusing a lot on mobile advertising, which now makes up 30%, or $375 million, of all of its advertising revenue. For now, Facebook seems happy instead for Instagram to provide a complement to the increasing commercialisation on Facebook’s main platform, which includes lucrative app install ads.

On the other, there’s still a lot of evidence here that points to Instagram still lacking the scale to be an effective ad platform for the company. While Instagram now has 100 million users, mobile active users for Facebook are now at 751 million.