Social Networking Watch: News on the Social Networking and Social Media Industry

Facebook's Zuckerberg May Face $2 Billion Tax Bill

2012-02-08T18:54:51-05:00

CNN - Feb 8 - Facebook's upcoming IPO will make founder and CEO Mark Zuckerberg a billionaire -- but it will also stick him with an eye-popping tax bill that could reach as high as $2 billion. Zuckerberg currently owns almost 414M shares of Facebook, but he also holds options to buy another 120M shares at the bargain price of 6 cents a piece. Zuckerberg plans to exercise those options and will sell some of his shares during Facebook's initial offering to cover the tax bill. The type of options Zuckerberg holds are taxable as ordinary income when they're exercised, even if the shareholder hangs onto the shares and doesn't sell them. That means Zuckerberg will owe taxes on the difference between what he pays for his Facebook shares -- 6 cents -- and their market value the day he exercises the options. Facebook said in its IPO filing that it values its shares at $29.73. At that price, Zuckerberg's options windfall would be worth $3.6 billion.

by Stacy Cowley
See full article at CNN

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Conversion Conference, San Francisco, March 5-6, 2012

2012-02-08T16:35:44-05:00

OPW – Feb 8 – The next Conversion Conference is held in San Francisco, March 5-6, 2012. This 2 days event focuses on learning how to increase your website conversion and making your marketing campaigns more effective. Keynote speakers are: BJ Fogg, PhD (Persuasive Technology Lab at Stanford University), Jared Spool, CEO & Founding Principal (User Interface Engineering), Roger Dooley, author of Brainfluence, Steve Krug, Web Usability Consultant & Author, Don't Make Me Thinkand Rocket Surgery Made Easy. See the full agenda. Register here.

LinkedIn Picks Up Rapportive For Around $15 Million

2012-02-08T16:18:18-05:00

TECH CRUNCH - Feb 8 - LinkedIn has bought contact management startup Rapportive. The startup, which aggregates and displays the social networking accounts of the people you contact through Gmail, was backed for $1M by seed investors Charles River Ventures, Paul Buchheit, Scott Banister, Jason Calacanis, Gary Vaynerchuk, Dharmesh Shah, Shervin Pishevar, Roy Rodenstein, Kima Ventures, Zelkova Ventures, 500 Startups, Michael Zirngibl, Ashish Soni and David Cancel.

by Alexia Tsotsis
See full article at Tech Crunch

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More Than Just Great Firewall Awaits Facebook In China

2012-02-08T16:11:26-05:00

REUTERS - Feb 8 - Facebook said last week it was contemplating re-entering China, the world's second biggest economy, after being blocked nearly three years ago. But its offering would likely face intense competition, political meddling and little commercial success. "It's actually a bit late for Facebook," said Hong Kong-based CLSA analyst Elinor Leung, who added that the market was already quite saturated with local players such as Sina Corp, Renren Inc, Kaixinwang001 and Tencent Holdings. Facebook first launched its Chinese interface in 2008 but was blocked by Beijing in mid-2009 following deadly riots in the western province of Xinjiang that authorities say were abetted by the social networking site. Facebook would face same the factors that have led to the failure of many foreign internet companies in China: nimble local competition, murky government regulation and bureaucracy, and difficulty in adapting to local tastes. Facebook would have to manage and censor content heavily in order to gain Beijing's blessing for entry.

by Melanie Lee
See full article at Reuters

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Google, Facebook Remove Content As India Threatens Lawsuits

2012-02-06T14:31:34-05:00

ASSOCIATED PRESS - Feb 6 - Google India has removed web pages deemed offensive to Indian political and religious leaders to comply with a court case that has raised censorship fears in the world’s largest democracy. The action follows weeks of intense government pressure for 22 Internet giants to remove photographs, videos or text considered “anti-religious” or “anti-social.” For India’s ~100M Internet users, the government says, U.S. Internet standards are not acceptable.

See full article at Washington Post

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Facebook’s Network In Offshore Tax Havens

2012-02-06T14:15:10-05:00

THE SUNDAY TIMES - Feb 6 - Facebook has been funnelling hundreds of millions of dollars through its Irish operation in an apparent effort to reduce its tax bill. Facebook moved 15% of its global revenues through Dublin in 2010, according to the accounts for an Irish subsidiary. The accounting manoeuvre allows Facebook to exploit Ireland’s 12.5% corporation tax rate, against 35% in America. Facebook Ireland Limited (FIL) employed 151 people in its Dublin office in 2010, when it generated €229.6M in sales. It had a cash pile of €172M but paid only €232K in Irish corporation tax. Google saved about £2 billion in 2007-2009 by shifting profits through Ireland and Bermuda. In 2010 it paid £1.2M in British corporation tax on sales of £2.2 billion in this country. Facebook UK paid £397K in corporation tax in 2010 on profits of £1.1M. Facebook Ireland accounted for all its £15.3M turnover.

See full article at The Sunday Times

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The Top Viral Video Campaign, Updated February 2nd, 2012

2012-02-05T08:30:00-05:00

Brand: Volkswagen
Campaign: The Bark Side
Agency: Deutsch (Los Angeles)
Source: VisibleMeasures.com

Groupon Basks In Facebook Light, For Now

2012-02-04T13:06:44-05:00

REUTERS - Feb 3 - Groupon shares jumped to their highest level of 2012 Thursday as the daily deal company got a boost from social networking euphoria sparked by Facebook's IPO filing. Facebook filed to raise about $5 billion Wednesday in what would be the largest Internet IPO ever. Shares of LinkedIn hit $77.84, the highest level in almost three months. Groupon shares jumped 8.3% to $23.28. The stock hit $24.22 earlier, the highest since December 16. Such gains may be temporary, especially for companies like Groupon that have less of a direct relationship to Facebook.

by Alistair Barr
See full article at Reuters

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This post also appears on DailyDealsObserver.

Yammer Time: In 2011 Infographic

2012-02-04T12:38:52-05:00

TECH CRUNCH - Feb 3 - Product VP Jim Patterson just tweeted out the Yammer 2011 Year in Review infographic below with the comment: “Pretty much everything tripled.”

by Erick Schonfeld
See full article at Tech Crunch

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Facebook Files For $5B In Biggest Internet IPO

2012-02-02T18:50:32-05:00

BLOOMBERG - Feb 1 - Facebook filed to raise $5 billion in the largest Internet IPO on record. Facebook is considering a valuation of $75 billion to $100 billion. A $100 billion market capitalization would value Facebook at 26.9 times trailing 12-month sales, more than double Google’s valuation when the search-engine operator went public in 2004. Zuckerberg is the company’s top holder with 28.4% of the shares, the filing shows. He also has proxy agreements with fellow stockholders that potentially give him voting control over more than half the shares.

by Brian Womack
See full article at Bloomberg

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Facebook: 425 Million Mobile Users And No Money

2012-02-02T18:45:22-05:00

PC MAG - Feb 2 - Facebook's mobile apps are frequently among the most popular downloads in the Android Market and Apple App Store. Facebook's Wednesday IPO filing revealed that the company had ~425M monthly active users during December 2011, or about half of its worldwide user base. But while that 425M number might be impressive, it's not making Facebook any money at this point. "We currently do not show ads or directly generate any meaningful revenue from users accessing Facebook through our mobile products", Facebook said.

by Chloe Albanesius
See full article at PC Mag

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This post also appears on OnlinePersonalsWatch.

How Facebook Made $3.71 Billion In 2011

2012-02-02T18:40:46-05:00

MASHABLE - Feb 1 - It’s not too surprising that Facebook generates a substantial majority of their revenue from advertising, though it also revealed just how much it makes via its partnership with Zynga (12%).

Facebook divides its revenue into two buckets:

1. Money made from advertising
2. Payments and other fees

Both revenue streams have been increasing over the past few years (ad revenue went from $764M in 2009 to $3.154 billion in 2011). Cash coming in from payments jumped up from $106M in 2010 to $557M in 2011. Facebook says the spike was because it forced all app partners to use Facebook Payments for transactions in July of last year.

by Peter Pachal
See full article at Mashable

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Facebook: Zynga Generates 12% of Our Revenue

2012-02-02T18:34:49-05:00

MASHABLE - Feb 1 - Lots of interesting numbers emerged from Facebook’s IPO filing Wednesday — including that Zynga, accounts for 12% of the company’s revenue. Facebook generated $3.71 billion in sales last year; ~$445M of that came from its partnership with Zynga. Facebook made $1.97 billion in 2010.

by Lauren Indvik
See full article at Mashable

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Snap Interactive: Facebook's Fast Growing Social Media Company

2012-02-01T18:39:42-05:00

SEEKING ALPHA - Feb 2 - With Facebook going public in 2012, the mobile and social media revolution will come to the forefront of investors' attention. Snap Interactive is the leading provider of social dating and location-based apps built on Facebook. Their core dating brand "Are YOU Interested?" has ~55M user installations, 8M monthly active users. Since being founded in 2005, revenues have grown at a torrid pace. As of the last 12 months ended September 30, 2011, the company has recorded $16.5M in sales. Quarterly revenues hit $5.1M (+198% YoY) in September, which puts the company on pace for~$20M in sales for 2011. The total market size for online dating is now in excess of $1billion.

by Ben Axler
See full article at Seeking Alpha

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This post also appears on SocialNetworkingWatch.

Twitter, LinkedIn Will See Slower Revenue Growth

2012-02-01T18:18:53-05:00

READ WRITE WEB - Jan 31 - Twitter and LinkedIn will continue to see strong advertisemnet growth, with Twitter's revenue expected to nearly double between 2012 and 2014, according to a report by eMarketer Digital Intelligence. Twitter gets 90% of its revenue from U.S. advertisiers, while LinkedIn depends more on foreign adverisers, with just 68% of its 2012 ad revenue expected to come from U.S. advertisers. eMarketer is projecting 83% revenue growth for Twitter this year, down from 233% in 2011, and 46.1% revenue growth for LinkedIn, down from 95% in 2011.

by Dave Copeland
See full article at Read Write Web

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Zynga Accused Of Ripping Off Another Competitor’s Game

2012-02-01T17:02:28-05:00

TECH CRUNCH - Jan 31 - Last week, the developers at NimbleBit accused Zynga of copying them with its new game, Dream Heights. Now, it’s happening again. This time, the accusation comes from Buffalo Studios, which says Zynga copied its flagship title Bingo Blitz with its launch of Zynga Bingo. Bingo Blitz claims to have over one million daily active users.

by Sarah Perez
See full article at Tech Crunch

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Vkontakte IPO Likely To Be Delayed

2012-01-30T15:14:03-05:00

BLOOMBERG – Jan 29 – The largest Russian social networking site has apparently put plans on hold for an initial public offering, according to two anonymous sources who have knowledge of the matter. Vkontakte began evaluating IPO plans in June 2011 but has not yet hired any banks to help sell its shares. The sources stated that the process may be restarted as soon as the market becomes favorable. Vkontakte is backed by Mail.ru Group and reportedly has 110M registered users, with approximately 70% of those residing in Russia. A Vkontakte spokesperson did not respond to repeated requests for comment.

See full article at The Moscow Times

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FTC Blasts Facebook, Google Over Violations Of Privacy

2012-01-30T10:51:16-05:00

TALKING POINTS MEMO – Jan 26 – Federal Trade Commissioner Julie Brill spoke Tuesday morning at a cybersecurity forum in Washington D.C. and blasted both Google and Facebook for violating user privacy, saying they “learned it the hard way” not to change user privacy settings without express approval from users. In 2011, both Google and Facebook reached separate but similar agreements with the FTC to undergo 20-years of independent privacy audits. Both companies have been found guilty of violating user privacy agreements and managed to dodge fines and penalties, but have been required by the FTC to develop their own internal privacy programs, which will then be checked periodically to ensure compliance. Brill dodged questions about Google’s latest privacy policy change that will create one policy across all of its products.

by Carl Franzen
See full article at Talking Points Memo

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