paidContent:UK news watch | Social Media

Zeebox Searches For Money In TV's Social Second Screen

2012-02-09T19:28:46Z

After quickly gaining a warm reception and a rapid post-launch investment from BSkyB, the social TV app startup co-founded by ex BBC iPlayer head honcho Anthony Rose is making its first real play at monetisation.

From Thursday, Zeebox is starting to include “click to buy” slots in its iPad and iPhone app and to sell second-screen ads to brands, so that each generates money from people watching TV shows with Zeebox on their laps.

It works like this…

Thanks to speech-to-text, subtitles and other metadata including from Philips’ Civolution fingerprinter spin-off, the Zeebox iPad app already shows users a live stream of info “tags” corresponding to material in shows they are watching on their lounge TV. Right now, they link to Wikipedia articles.

But Zeebox also had always hoped to leverage them to start linking to marketing messaging as well as to purchase options during the commercial breaks between shows.

So, during those breaks, Zeebox will denote actionable tag links with icons for songs, products, travel services etc. Those links will send users through to merchants like iTunes (for music), Amazon (NSDQ: AMZN) (for DVDs), Tesco (for food) and Boots (for cosmetics) via Zeebox affiliate codes, so that it generates a percentage commission of any subsequent sales.

Zeebox is running the system so far on about 20 percent of UK TV’s commercial break ads, mostly for ITV (LSE: ITV) hcnanle.s

Will it work?

“Our consumer research told us that people want an easy way to buy things they see on TV,” Rose’s co-founder Ernesto Schmitt says in a press release.

Do affiliate links add up to a business model? Not in isolation. Shazam claims to make a percentage of music purchases worth $100 million a year that its app sent to stores last year. But it has tried to diversify its revenue streams.

Using just the affiliate commission model, Zeebox will need to generate click-throughs and actual purchases at a large scale in order to clock up significant total income. But the startup appears to be seeking other streams, too.

The prospect of selling specific second-screen tag ads to advertiser brands is exciting as an innovation. But brands would likely consider this experimental until such time as Zeebox is being used by large numbers of TV viewers.

Zeebox last month claimed “250,000 users” - but simultaneous prime-time users metrics are not publicised.

One route to scale for Zeebox is through BSkyB (NYSE: BSY). The UK pay-TV platform leader in January took equity in the startup with a deal through which it will leverage Zeebox features in a social-centric upgrade revision to its EPG app for its Sky+ PVR.

But, still, the whole prospect, for all such operators, depends on the usage scale of tablets or smartphones as engagement facilitators during TV shows. On that hinges the very notion of the second screen but, so far, much research points to a growing trend there.

Populis Blog Network Buying In To Latin America

2012-02-07T09:52:34Z

Demand Media (NYSE: DMD) rival Populis is continuing to build up its non-English blog network and publishing business through acquisition, this time expanding out of Europe in to Latin America.

The Dublin- and Rome-based company is buying Cidade Internet, a Brazilian portal which publishes 10 popular websites and other blogs inluding Fofocando, Automovel and Das Marias.

Formerly known as GoAdv, Populis operates the Nanopublishing and Blogosfere blog networks, has built up through acquiring Italy’s Blogo.it network from Dada, Germany’s Mokono network. It also owns Excite Europe, the Better Deals repository of user-created consumer guides and the Koego blog platform. In all, the company sels ads against the thousands of articles contributed by its hundreds of users each month across what is now a portfolio of several hundred websites.

Brazil’s consumer internet economy is taking off, with online ad spend surpassing that in the UK in 2011 (source and more data: IAB Brasil).

Cidade’s properties will be fully integrated under the Populis banner. Populis is gaining Cidade’s Rio and Sao Paulo offices, intends to open another this year and add 30 staff.

By trying to operate so strongly in non-English languages, Populis claims to avoid the “Demand Media clone” tag - complementarity that could ultimately make for an exit to such a group.

Now Facebook Must Prove To Wall Street Its Ads Really Work

2012-02-02T10:58:02Z

Facebook has made a $3.1 billion business from a social advertising sector many, even it, concede is experimental and unproven. Now it must find that proof. But experimenting on Wall Street, as well as Madison Avenue, could prove challenging.

“Our advertisers typically do not have long-term advertising commitments with us,” Facebook’s S-1 warned. “Many of our advertisers spend only a relatively small portion of their overall advertising budget with us.

“In addition, advertisers may view some of our products, such as sponsored stories and ads with social context, as experimental and unproven.

“Advertising on the social web is a significant market opportunity that is still emerging and evolving. We believe that most advertisers are still learning and experimenting with the best ways to leverage reach, relevance, social context, and engagement offered by Facebook.”

Facebook manages to target standard display advertising very well because it knows so much about users, but the biggest opportunity may yet lay in getting users to participate in and distribute to their friends ad campaigns that are part of their social experience may yet hold greater promise. It is a long way from there, however.

Forrester analyst Nate Elliott cautions (via Reuters): “I worry that the billions of dollars of revenue that they generated last year aren’t as solid as they need to be because the advertisers who spent the money aren’t as thrilled with the results they got for it.”

Amongst advertising’s biggest skeptics is advertising’s biggest beast. WPP CEO Sir Martin Sorrell thinks advertisers will be challenged to reach social network users without offending them, making Facebook a better PR and word-of-mouth medium than a straight advertising one.

Indeed, Facebook has been trying to strike that very balance. But, with its quest to roll out the perfect formats still ongoing, Facebook has made frequent missteps along the way, such as its Beacon system, which proposed sharing users’ web purchases to friends before it was aborted.

Today, less than half a percent of people who Like big brands’ Facebook Pages actually bother to engage with them, according to new research from the Ehrenberg-Bass Institute.

Social is not Facebook’s only advertising play. Its offering today is focused mainly around display ads that run alongside users’ feeds. Here, Facebook is so big that, in some key markets like the U.S. and UK, it’s actually the biggest player of all in display advertising - social or otherwise - leaving those that effectively created the display field—Yahoo (NSDQ: YHOO), AOL (NYSE: AOL) and others—in the dust.

But it’s social advertising where perhaps the greatest potential lays. And frankly Facebook, like its advertisers, has not yet cracked the nut; that mission goes on.

If, previously, upgrades like Beacon, Timeline and its perpetual redesigns have prompted user outcry, expect future responses to manifest as share price fluctuation when such revisions take place in the public glare of Wall Street.

Still, users’ redesign shock often subsides, stock price can rebound accordingly. And, if Facebook can execute fully on the social advertising holy grail, it can become spectacularly successful.

None of this looks very problematic today. In 2011, Facebook advertising revenue rose 69 percent because it showed 42 percent more advertising thanks to a growing user base; it scored an 18 percent higher price per ad.

But Facebook concedes these growth rates may not be sustainable. “Our user growth has been a primary driver of growth in our revenue,” its S-1 says. “But “our rates of user and revenue growth will decline over time”, especially in the west.

One Facebook ad buying agency thinks that slowdown could be a good thing…

“The market has now entered a phase where there is no longer any super-growth in user numbers to dilute the increases in cost caused by demand increases,” Alchemy Social managing director Will Ashton writes in a new white paper. “As such, we expect costs to increase at rates substantially higher than those we have seen previously.”

In other words, advertisers rushing to Facebook are driving up demand, but the slowdown in Facebook user growth suggests finite supply, driving up the rates it can charge.

Outside the west, Facebook has a huge opportunity in mobile, having gathered 425 million users. But it’s not monetising a single one because it is not selling any ads through mobile. Worse - until then, mobile success could actually hurt the company from within…

“Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results,” the company warns. “Our ability to (generate mobile revenue) successfully is unproven.”

$3.1 billion in 2011 ad revenue suggests Facebook is well on its way. What an amazing number for such a young paradigm. But some investors may question whether much of that was short-term experimentation by advertisers, meaning Facebook must work hard to prove its value to them as much as they have to itself.

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2.7 Billion Daily Likes And Other Key Numbers From Facebook's S-1

2012-02-01T23:28:26Z

Facebook‘s nearly 200-page S-1 filing appears to have crippled the Securities and Exchange Commission’s Edgar website with the mass of people going there to take a peek at the social network’s numbers. That traffic may well be matched by the weight of numbers in the filing itself. Here’s a look at some of them:

845 million active users, 100 billion “friendships”, 250 million photos uploaded daily

That works out to an average of 118.3 friends per user, and an average of ~~3.4~~ 0.3 pictures uploaded each day by those active users. Among those 845 million active users, more than half—483 million—are actually daily active users (taking the photo average up to 0.5 uploads per day, or around 15 per month). They’ve gone up by 48 percent since December 2010, when they stood at 327 million DAUs. Those numbers sound big on one hand, but not so big on another: doing some very basic math, this works out to average revenues per user of only $4.39. As a point of comparison, Google (NSDQ: GOOG) currently makes about $36 per user; Yahoo (NSDQ: YHOO) $16 per user (via CBS).

$1 billion in net income on revenues of $3.711 billion

That works out to net income at about 30 percent of revenues in 2011, up slightly from the previous two years when net income was at about 29 percent of revenues. A sign of improving efficiencies?

$3.2 billion in ad revenue

That’s the ad revenue figure for 2011, out of total revenues of $3.7 billion. The rest of its revenue is made up by Facebook Credits and other payments. The growth in ad revenues at the moment appears to be slowing down: Facebook says between 2009 and 2010, ad revenues grew by 145 percent, but then between 2010 and 2011 it grew by only 69 percent. There’s a clear sign that Facebook will need to further diversify how it makes its money if that trend continues. Credits and other fees are still very much on the rise and becoming a more prominent part of the overall revenue pie. In 2011 they amounted to 15 percent of revenues ($557 million); in 2010 they accounted for only five percent ($106 million).

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$0 in mobile advertising

Facebook currently makes nothing from advertising on mobile devices because it has yet to extend ads to its mobile platforms. The S-1 didn’t specify whether it planned to introduce this and in fact cast its mobile prospects in the most sober light possible: Facebook thinks that growth in mobile monthly active users will exceed the growth of overall MAUs “for the foreseeable future” as Facebook continues to encourage more mobile use of its platform. There must be a business agenda in that but Facebook doesn’t spell it out here. In fact, it cautions that as more people could just start using the mobile platforms more than the desktop version, where ads do appear, “if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.”

Zuck’s salary is going down to $1 from next year. At the moment Facebook has 3,200 employees in total. That works out to an average revenue per employee of $1,159,687.50.

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Facebook's Status Update: $5 Billion IPO Filed

2012-02-01T21:51:07Z

It took the whole day, but Facebook finally—as many expected—filed its S-1 with the Securities Exchange Commission for its long-awaited IPO. While guesstimates for how much Facebook would try to raise ranged from $5 billion to $10 billion, in the end, it looks like it is the lower of that range: $5 billion.

There’s no firm idea yet on what that $5 billion might mean for a valuation of the company. But here are some quick early numbers: Facebook made $3.71 billion in revenue in 2011, almost twice what it did in 2010. Of that $3.71 billion, $1 billion was net income.

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It has 845 million active registered users with 483 million of them termed “daily active users”.

Advertising accounted for 85 percent of its revenue last year. Zynga accounted for 12 percent of its revenues overall and over 80 percent of its payment revenues.

And to confirm the rumors we heard about which banks are involved: Morgan Stanley is leading the IPO filing with J.P. Morgan, Goldman Sachs, BofA Merrill Lynch, Barclays Capital, and Allen & Co also participating.

Several folks are in line for a big gain on their investments. Facebook listed Accel Partners, DST Global Limited, Goldman Sachs, and T. Rowe Price as its major institutional shareholders. Dustin Moskovitz, a Facebook co-founder and CEO of startup Asana, is also a major stockholder listed in Facebook’s statement. Notable among the individual investors is Peter Thiel, who co-founded PayPal and will serve on Facebook’s board of directors.

It’s not just the IPO price, bankers and valuation that had people busy guessing. People have been speculating about other aspects of this IPO, including how much of a fee the banks will get on the deal (the range we’ve seen: between one percent and seven percent).

Now, with the IPO finally out, people will begin to pore over the numbers to figure out all sorts of things about Facebook that have not been completely clear while it was still in startup mode: What are its margins? What does it expect its growth rate to be? What are the comparative sizes of different business areas like advertising versus Facebook credits? What’s the geographical spread of its business?

However you cut it, the company has been a ground-breaker in the online world. You can argue about whether or not Facebook introduced the concept of social networking, but it has certainly run away with it, and now has 845 million users. And counting.

The question today is whether it will be able to convert that into a sustainable financial juggernaut, too?

More S-1 detail and number crunching here.

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Videoplaza Raises $12 Million For Its Multiscreen Video Ad Platform

2012-02-01T08:00:19Z

The rising popularity of streaming video services is causing a knock-on effect for companies serving ads around that content. And here’s another example of that in action: today UK-based video ad platform Videoplaza is announcing a new $12 million round of funding.

Leading the second round of investment were Qualcomm (NSDQ: QCOM) Ventures and Innovacom, along with participation from prior investors Creandum and Northzone; and takes the total amount of funding in the company to almost $18 million.

Videoplaza says that it will be using the investment to help fund its international growth and product development. Those two areas appear to be running fast at the moment anyway: the company says that its client base already spreads across 17 markets, and in the past year its ad serving volumes grew five-fold. Some of its clients include the publisher Dennis, French commercial broadcaster M6 and Spanish newspaper group La Vanguardia and the France-Telecom-owned interactive ad network Unanimis, and it partners with other established names in the business, like Brightcove, to help monetize their video ad traffic.

Videoplaza’s target is to tap into some of the $160 billion that is estimated to be spent on TV advertising annually at the moment, and following those ad budgets as media buyers try to chase down viewers as they start watch more and more of that TV content on an ever-growing variety of screens, from IP-enabled TVs to smartphones, tablets, cars and desktop computers—and who knows what else. Videoplaza projects that by 2020 there will be more than 10 billion connected devices in consumers’ hands that could be used for consuming streamed video.

It is not the only one: companies like YuMe, spotXchange, BrightRoll (a Videoplaza partner), Hulu, CBS (NYSE: CBS) and many, many others are also scrambling for substantial market share in this space. It’s still a fast-growing area, with the amount of ad-funded, streamed video content still very much on the rise—both in terms of volumes and consumption—but there is bound to be some consolidation on the cards among these ad players, too.

A stake from a company like Qualcomm—which plays a central role in making processors and other parts and software for mobile devices—could potentially give Videoplaza a leg up in that respect. At the moment the vast majority of video ad consumption for Videoplaza is still coming from PCs: only eight percent came from other devices. But the company believes that by 2013 (that is, in a year) that will shift to a 50-50 balance.

Jesta Digital Finally Kills Bitbop Mobile Video Service

2012-01-27T17:39:05Z

It looks like the death spiral that was the Bitbop mobile video service is finally no longer. PaidContent understands that the service—once built and owned by News Corporation (NSDQ: NWS) and sold, along with the rest of Fox Mobile, to IT services company Jesta when News Corp. couldn’t make a business out of it—is today laying off most of the staff that worked on Bitbop and shutting down the service.

According to a source, there are about 50 people getting laid off—people who worked on the Bitbop mobile video service. A small group will stay on to help with the final wind-down of operations, which should take about four weeks. The services that were live in the U.S. and Germany are getting shut down today, we have been told.

There were once big hopes for Bitbop, but things took a challenging turn as competition in the form of Hulu, Netflix (NSDQ: NFLX) and others invested heavily in their streaming services and delivering them to mobile devices.

However, this is not the end of Jesta Digital. The Jamba ringtones business—a German company that News Corp. once paid nearly $400 million to purchase in 2008—is still a healthy cash generator, and it will continue to operate.

Bitbop is understood to have some 20,000 subscribers who pay $9.99 per month to receive premium mobile video services. But with the service never getting a coveted outlet via an iPad app, it’s had a hard time scaling up, and with many of its original content deals up for renewal at the moment, it looks like it became clear that Bitbop’s business model was no longer sustainable.

Earlier in January, we noted the problems at the company, including some executive departures. At the time, Jesta told paidContent in a statement that it would continue to develop new mobile products in the future, without specifying what they were.

We will update this story as we learn more.

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Facebook's Latest Scoop: Thousands Of Journalists Use Subscribe Feature

2012-01-25T23:30:35Z

For many news sites, Facebook has become one of the biggest sources of referral traffic to its stories, and today the social network revealed some numbers that underscored how it is continuing to build up its cred as a news aggregator: it says it now has “thousands” of journalists using its new Subscribe feature, an enhanced, Twitter-like broadcasting service that lets those journalists engage with readers, highlight news and publicize their work, without the need for the reader and journalist to mutually follow each other.

But before you think that Subscribe has been taken over by those working in the world of blogs and digital-first news sites, think again. According to a blog post today, Facebook said that among those early adopters, the highest concentration of journalists using Subscribe were from two of the most old-school publications: Washington Post (NYSE: WPO) has more than 90 journalists using it; and The New York Times (NYSE: NYT) has over 50.

Anecdotally, people have said they are finding a lot more people are following them on Facebook than they are on Twitter. That’s not so strange: although Twitter has become the default place that many journalists hang out online today, Facebook is fundamentally a much bigger site: 300 million versus 800 million subscribers, respectively. The only surprise, given how much traffic Facebook generates for some sites, is that more journalists aren’t using it as a way to reach readers, or would-be readers. That might be because some see Facebook as a down-time activity, compared to Twitter as a work-time network. (I know I do.)

So Facebook may have a roster of thousands of engaged journalists to canvas, but it took a selection of only 25 to draw some early conclusions on how journalists are using Subscribe. Does that sound like a small number? “When it comes to qualitative, it’s enough to draw conclusions and see patterns,” Vadim Lavrusik, Journalist Program Manager & Betsy Cameron, Data Analyst, wrote in response to one person’s questioning of the sample size.

Some early take-aways from that group of 25. There will likely be some that have seen significantly different results.

—The average journalist has seen a 320 percent increase in his/her traffic since November 2011.
—People are finding journalists via friends in their news feeds (for example, through shared articles); Facebook search and Facebook’s own recommended subscriber list.
—Links are good: 62 percent of posts contain a link, and when posts have some analysis with the link, that triggers 20 percent more referral traffic.
—Questions are better: 25 percent of posts ask a question, and Facebook said that an earlier study that found posts that asked for input received 64 percent more responses from users—although those might not be click-throughs and just simple likes.
—Self-promotion actually works: 30 percent of posts contain calls to action such as “read this.” Those receive 37 percent more engagement than those without the self-promotion. Asking reads to comment also got good responses: between two and three times more engagement from subscribers.
—So do photos: surprisingly only 12 percent of posts were based around photos—but those that used them got 50 percent more “likes.” Again, no detail on how that actually translated into people reading those posts, if those posts also included links to stories.
—Videos are equally less common—only 13 percent of posts feature them.

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Jon Miller, News Corp.: It's All About Video For Us Right Now

2012-01-24T11:33:14Z

Jon Miller, the chief digital officer for News Corporation (NSDQ: NWS), described his company’s digital strategy today as very “focused on video”, with a view that even properties that come from a print tradition should be producing more video content than they are today.

“I actually think we’re entering the age of video now…some people think we’re already there but I think we’re just getting started,” he told an audience at the DLD digital media conference in Munich, Germany.

He predicted that digital video consumption will “rise for the next many years” as bandwidth to the home continues to grow, and new devices make it easier to consume more content than ever before.

News Corp. like many other TV producers, has long been preparing itself for a time when that TV content is watched on anything but a TV, with the launch of online video and apps for new screens like those of tablets and smartphones. “TV is no longer a device,” he said. “It is a concept, and people go where the best screen is.”

And rather than simply ramping up the amount of content that News Corp.‘s video properties produce—they include broadcasters like Fox as well as the film studio 20th Century Fox—Miller says that it is turning to News Corp. businesses that are traditionally more tied with written content, in what sounds like a very decentralized, try-everything-and-see-what-works approach to the space.

“We’re producing everything across the board now,” said Miller. “[Because] we’re focused on video…we’re trying to move our print publications into video, too.” That includes training Wall Street Journal reporters to “take videos on their iPhones,” as well as write.

And gaming site IGN, which originally started life as a collection of titles reviewing games, is running a dedicated channel on Microsoft’s Xbox, as well as the YouTube (NSDQ: GOOG) channel dedicated to gaming. “We won the bakeoff for the YouTube channel last year,” said Miller, referring to YouTube’s strategy to launch 100 new premium content channels covering a variety of interests.

He also noted that through IGN News Corp is once again looking at how it might develop its own gaming content—this is something that it had tried to do through its old subsidiary Fox Mobile, although that content division, including the production studios, was sold off last year to Jesta Digital. The company seems to be taking a more cautious approach than in the past: “We are putting our toe into the water with casual games,” said Miller. “Playing games is a bedrock so we want to learn and earn our way into that.”

Miller was interviewed on stage by DLD’s chairman, Yossi Vardi, who noted that he once worked with Miller for four years, and also that DLD had been trying to get Miller to speak at the event for the past three years.

These two hooks might be part of the reason why Miller was thrown quite a few softballs in the interview. In other words, no questions about how News Corp. can avoid another MySpace or Fox Mobile investment (both written off and sold off) in its search for the next big revenue stream.

Nor were there any questions at all about the best business models for delivering that new material: News Corp has been strong on paywalls for its written content so far—with paid subscriptions required for much of the Wall Street Journal and The Times in London—would Miller and News Corp consider extending that to more of its video content?

One area where Vardi did press Miller a bit was on the Megaupload closure and how content companies are going after the “little guy” in their pursuit of copyright protection. Aren’t you ashamed your industry is chasing small kids who want to have some fun, asked Vardi.

“I think you’re confusing us with the music industry. We don’t do that,” answered Miller. “What you’re getting at is what is the proper way to protect copyright….There has to be a way for freedoms to be respected and for copyright to be respected.”

That is an issue that has yet to find a definitive solution from many of Miller’s peers, and perhaps Miller himself. “The industry takes a while to embrace new technologies,” he said. “We’re doing it as an industry but it’s a different world.”

That world, in Miller’s view, has discounted content to almost nothing, in order to shift value to other parts of the ecosystem—a complaint often heard from those in the content industry in the face of juggernaut’s like Apple (NSDQ: AAPL) and Google, which respectively are more interested in pushing hardware sales and advertising for their own business models, offering easy and cheap access to content as part of the deal for consumers.

“Distributors have different businesses now,” he explained. “It’s not just to make money on the content as before.” “[Those who make hardware, or sell advertising] would like to keep the value of content low.” He said that this will eventually need to get “rebalanced” in the future. Whether that means more moves to paid content, or more advertising initiatives—or even partnerships on devices—remains to be seen.

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Updated: Rutberg: Mobile Accounted For Over 40% Of All Tech VC In 2011

2012-01-23T15:44:31Z

Some revealing numbers out from the analysts at Rutberg & Co. that point to how big mobile is in terms of tech investments today, and how consumer applications are the source of the most action at the moment.

The analysts say that mobile investments accounted for 42.4 percent of all technology investment in 2011—or $6.3 billion for mobile startups in a year where, overall, venture capital investment in technology totaled $14.9 billion.

That’s a record proportion for the sector, and a massive spike on 2010, when mobile represented 30.4 percent of all tech investments worldwide, or $6.1 billion of investment. (See table at end of post.)

Ironically, while mobile is representing the greatest amount of investment, $6.3 billion falls just short of the biggest-ever year for mobile investment: that honor goes to 2006, when VCs pumped $6.4 billion into mobile technology.

Drilling down: As for the single-biggest category for investment in 2011, it’s consumer applications that have won the day—a sign of how the smartphone boom is leading to a big rise in the amount of companies rushing in to service those new consumers, and a subsequent rush of money men scrambling to finance them and get a piece of the action.

While no single consumer application made it into the top-10 mobile investments of 2011, the sum total of all the investments in the category pushed the total number of consumer applications investments to $1.33 billion.

Media infrastructure was the second-largest category for investment with some $900 million put into companies working in the category (services like mobile advertising are part of this latter group). Collectively, infrastructure was the biggest sector receiving VC money.

Infrastructure covers a diverse range of mobile-related startups, from mobile advertising (InMobi’s $200 million from Softbank being the second-largest deal of 2011), to technology used in backhaul and radio towers (Tower Cloud’s $155 million, and Eaton Towers’ $150 million respectively in these categories).

While consumers apps didn’t make the top 10, plenty of them made the top 20. The biggest of them all was for a service that is disrupting more traditional telecoms business: video calling service Tango picked up $50.7 million. Swiftly behind that was note-taking application maker Evernote, news aggregation site Flipboard, and check-in darling Foursquare—each picking up $50 million. Further along, Angry Birds maker Rovio picked up $42 million and photo sharing company Color picked up $41 million.

All these companies certainly saw a lot of attention in the last year, and they all cover hugely different areas of services. But one of them, Color, has already had to make a major pivot, losing one of its key founders in the process, and it’s still unclear what will happen with it next. Similarly, while Evernote has had a huge amount of attention for its core, note-taking app, the follow-up services have made significantly less impact on the mobile public.

Mobile is certainly a volatile area, with more than a little of a tech-bubble feel to it: Which of these, do you think, will be able to sustain their momentum and become profitable businesses in the years ahead?

Worth pointing out that this is not just the case for consumer apps, though: the single-biggest VC investment in mobile this year went to LightSquared, the LTE startup that picked up $265 million from a consortium of investors. The company is still trying to build out a network for its services, hence the huge capital buy-in. However, there are still big question marks over what will happen: the most recent report is that Carl Icahn has picked up $300 million in LightSquared debt, perhaps in anticipation of the company being unable to get its services off the ground after some regulatory hurdles around spectrum interference.

Sequoia Capital was the biggest VC in 2011, making 24 investments including several in mobile apps and media services. They included Bubble Motion, Bump, Clickatell, Color, Cotendo, DailyBooth, Evernote, Flite, Inkling, Inkling, Just Dial, MeLLmo, Meraki, MobileIron, MoboTap, Onavo, Quantenna, Sencha, Sourcebits, Square, Stoke, Synapsense, Trippy and Unity.

Rutberg also notes that more than one in five of all VC investments this year were strategic investments: those buy-ins made by companies like Intel (NSDQ: INTC) and Google (NSDQ: GOOG) that might potentially acquire the companies or use their services in the years ahead.

A couple of other notable points from Rutberg’s numbers: investments in mobile advertising services increased nearly five-fold last year: to $592 million from $128 million in 2010; and mobile payments investments more than doubled to $558 million from $276 million in 2010.

How does all this stack up for 2012? Mobile will continue to figure big: “We expect mobile to continue to be significant percentage within venture overall,” says Rajeev Chand, MD and head of research for Rutberg, but the fate of upcoming IPOs will also play a role. “Right now growth of overall venture is uncertain, depending upon how tech IPOs play out and what impact that has to late stage pre-IPO financings.”

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SOPA Blackout, Anonymous-Style: FBI, DOJ Sites Downed In Megaupload Protest

2012-01-19T22:52:39Z

A day after the SOPA protest on the web, the hacker group Anonymous has taken the blackout theme to a whole new level: in retaliation for the closure of the Megaupload file-sharing site, and for its own SOPA protest, the group has started to systematically take down a number of websites for groups connected to the Megaupload case, including government bodies.

Update: We’ve also published a new story with further developments here. [To read about how events unfolded last night, continue reading below…]

Using distributed denial of service (DDoS) attacks, the hackers have gone after the Department of Justice’s site, the RIAA, the MPAA and the major record labels—so far Universal, BMI and Warner Music Group have been affected.

At the moment, the hackers are updating a Twitter feed with news of developments of the attack, which it is code-naming #OpMegaupload. It also appears that it is also going after related sites outside of the U.S. as well.

A series of messages posted on Anonymous’ Twitter feed, have detailed the group’s trail of destruction across the internet.

They are covering not just U.S. sites but also extending their work to similar organizations in Europe, such as Hadopi.fr, which is now also down.

Hadopi is the French law that was introduced in 2009 and is used to regulate internet access and copyright violations in France. This controversial bill basically outlines a three-strikes procedure for suspending internet access for those who download illegal content. There are legislators now considering how to apply this to streamed services as well, which are currently not covered.

Taking down government sites like the DOJ’s and ~~potentially~~ the FBI’s—~~the Anonymous Twitter feed has mentioned it is working on the latter, although at the time of writing the FBI’s site is still up~~—could mean the group would be subject not just to felony charges but also potentially terrorist violations.

Update: FBI.gov is now down, too.

Cases involving the prosecution of Anonymous hackers are still being played out, so it’s not clear what route authorities may take over this current spate of attacks: hackers that were identified as part of Anonymous are currently being prosecuted in California for allegedly hacking PayPal when the Ebay-owned payments provider halted payments to Wikileaks. Defendants in that case pleaded not guilty in November 2011.

This case could be considerably more difficult to track for authorities: Anonymous says that there are 5,635 people confirmed to be working towards taking down sites.

A DDoS attack can mean several things, but one of the most common is when a person or network of people “attack” a site or server with a flood of communications requests, so that the target cannot respond to normal requests.

Adrian Chen at Gawker further describes how those DDoS attacks are getting amplified using viral techniques: hackers are at the moment spamming out links that effectively rope innocent users into also taking part in the attacks, by clicking on the links to automatically start pinging one of the sites on the target list.

Many of the sites listed above are simply leading to blank pages now, or “down for maintenance” pages, but one site, for the Utah police association, which might have less administrators than those of the DOJ, has been hacked with a message from the hackers about Megaupload:

The MPAA, meanwhile, has taken to posting Twitpics of its statements—for the moment, it has no website to use to post them, and a Twitpic can’t get hacked. “Our website and many others…were attacked today,” begins the 150-word statement. It also says it is working with law enforcement agencies to identify those responsible, and that “Protecting copyrights and protecting free speech go hand in hand.”

Update 2: Several of these sites are back up and running, but so is Anonymous’ own effort, with some 9,000 users participating in its site take-down. Read about other developments in this separate post.

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ITN Unifying Ad Sales For Multi-Platform Video Syndication

2012-01-19T10:15:26Z

UK TV video news producer ITN is unifying its online ad sales platform as it expands into a burgeoning number of online destinations.

The company’s core work is producing TV bulletins for ITV (LSE: ITV), Channel 4, Channel 5 and video footage for others like CNN, NBC (NSDQ: CMCSA) and PBS. But it has been launching its own branded web video channels as well as producing online video series for web-native clients, much of it through YouTube.

That diversification has meant ITN’s ad sales operation has been fragmented across each new syndication platform. So it is now taking on Rightser to manage its content and sell its ads across the whole of the footprint.

The news underscores a trend for more scale in online ad sales around video, and is also perhaps a sign that ITN’s online audience has grown big enough to merit the investment.

The new digital strategy, ~~called One ITN~~, will see Rightster become the new platform provider for ITN Productions to serve all of its online content across different portals such as Facebook and at least two YouTube (NSDQ: GOOG) channels (ITN News and The 411 entertainment news channel) and its own portal, ITN.co.uk.

These are channels where ITN already gets good traffic: it says that it currently ranks as the biggest news provider in the UK on YouTube in terms of views.

Financial terms of the deal have not been released. But key to the deal is the hope that this will bring in more ad revenue for ITN, which does not have any paywalls around any of its online content at the moment.

A lack of scale in many long-tail content plays is one reason why digital advertising has continued to play second-fiddle to other advertising mediums like TV, which, for all its faults, at least has large, concurrent audience numbers that media buyers for large brands need when justifying ad investments.

We have also seen other industries, like publishing, make moves to tackle this as well: earlier this month, AOL (NYSE: AOL) announced that it would be selling ad inventory for Bonniers’ Parenting.com by putting it together with its own parenting content channels—a move that Bonnier hopes will get more big-name advertisers buying into ad space on its site.

The deal being announced today is an extension of an existing relationship between Rightster and ITN. The two were already partnering together for specific live event coverage that the broadcaster expected would get spikes of traffic: the two worked together to livestream the Royal Wedding to 20 countries via Facebook; Rightster is also providing the backbone for ITN’s streaming of the Leveson inquiry in the UK into media practices and ethics in the wake of the phone-hacking scandal.

Another aspect of the deal is that Rightster runs what it calls a “multi-cloud” system, meaning that if content delivery fails at any one point, the system will switch to taking it from another to keep the streams flowing.

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WPP: Another Move Into Asia Pac, Buys A Stake In Australia's DTDigital

2012-01-18T10:11:24Z

Another day, and another big digital investment from the world’s largest advertising firm. WPP subsidiary Ogilvy has taken a 33.3 percent stake in DTDigital, a digital marketing agency based in Melbourne, Australia. The move is not just another signal of the firm’s growing base of interactive holdings, but one more sign of its intention to grow its business in the Asia Pacific region: it follows just after WPP research division, Kantar, announced the acquisition of China’s CIC, a social media consumer research firm.

Financial terms of the deal were not disclosed in WPP’s market disclosure of the investment.

DTDigital, which also has offices in Sydney and Brisbane, was founded in 1996 and employs around 110 people. It focuses on digital marketing services, which clients ranging from retailers like Myers and Bunnings to multinational consumer brands like Honda.

The acquisition will not only help WPP expand its client contacts and business in the region, but it will also contribute to its overall aim to grow its interactive business.

WPP has bet big so far on interactive marketing and advertising: it is expected that in 2011 the company will make some 30 percent of its revenues from digital. In dollar terms that works out to digital revenues of $4.5 billion on overall revenues of $16 billion for the year, according to analyst consensus.

WPP says that it is aiming for digital to account for 35-40 percent of all revenues in the next five years.

DTDigital had gross revenues of A$14.38 million ($14.94 million) as of December 31, 2011, with assets of A$4.76 million ($4.95 million).

WPP also did not reveal the value of the CIC acquisition but that company reported revenues of 29.9 million RMD ($4.7 million) in 2011.

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Updated: In-App Purchases To Overtake Sales From Paid Apps By 2013

2012-01-17T14:47:16Z

The consumer draw of free apps over paid apps has been well-documented, and so has the rise of in-app payments as a route to making money from those free apps. New research out today predicts that in-app purchases will, in fact, become the most dominant way that app developers will make money in years ahead.

The report, from its IHS Screen Digest division, notes that in-app purchases accounted for about 39 percent of app revenues in 2011, and it predicts that in 2012 that proportion has gone up to 49 percent. By 2015 it will account for 64 percent of all revenues.

In terms of actual value, IHS says that in-app payments were worth $970 million in 2011, and will be worth $5.6 billion in 2015. (Sound too big to you? Please comment below.)

Update: More on why those revenues will be so big. Ian Fogg, head of mobile for IHS Screen Digest, pointed out to paidContent in an email that the $5.6-billion figure “is driven by the vast numbers of new smartphones that will ship over the next few years. As the number of smart devices is so great, the app market revenues will grow greatly, and hence so will the in-app revenues.” He also noted that many pay-to-download apps also feature in-app purchasing options; that will additionally contribute to the total size of in-app revenues. [original article continues]

This represents a big opportunity for app store operators like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), as well as mobile payments companies like Boku, Zong and PayPal to manage these payments.

And it also represents something of a success, too, considering how much opposition there was to in-app billing when it was first launched by Apple with requirements to pay it 30 percent of each transaction.

“Apple has nailed the mobile gaming and mobile app payment business,” noted Wilhelm Taht, marketing director for mobile social media service Flowd, earlier today. “It’s super frictionless.”

Strangely, the report does not take account of mobile advertising as a route to making money from an app. That could be because the only apps that can actually make any significant money from advertising are those that get the very highest amount of traffic—other long-tail apps that lack scale will face a challenge in trying to use advertising as their main business model.

Today, free apps already have significantly more traffic than paid apps: Nielsen last week noted that consumers mainly use a mixture of these, or a free-only selection of apps; those who only opt for paid apps account for low, single-figure percentages in different categories (around two-three percent). Ironically, paid apps today remain the main way that many of the most successful apps (such as games) are making money.

Free-to-download apps that come with in-app purchasing—so-called “freemium” apps—represented 45 percent of all top-grossing iPhone apps, and 31 percent of the highest-earning Android apps in the U.S.

IHS Screen Digest estimates that some 68 percent of all top-grossing apps had at least some form of “additional content or functionality” available through in-app purchase, which could mean features like extra levels in games, virtual currency to continue playing or extra editions of a publication.

Virtual currency, it says, is the most common form of in-app paid content available today, accounting for 63 percent of all revenues made from in-app purchases.

But while we hear a lot about newspapers and magazines, and increasingly video-based apps looking to in-app payments as a way of getting their users to buy mobile content, overall, this represents a very small part of revenues today: in the UK in Q3 2011, publications accounted for only five percent of in-app payment revenues (no figures for the U.S.), while video accounted for only two percent of in-app revenues in the U.S. and none in the UK.

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Microsoft SkyDrive 'Confuses Naked With Nude', Art Account Frozen

2012-01-17T10:27:23Z

Microsoft (NSDQ: MSFT) has an image police - but an arrest they have made may be mistaken. A blogger using its SkyDrive cloud storage service says it froze his account when it confused a famous work of art with pornography.

UK-based Michael Ohajuru, who on Twitter describes himself as a “sales and marketing specialist, art blogger, communications evangelist, art historian, communications philosopher [and] geek social networker,” among other things, notes that, after starting to use SkyDrive to store and share photographs with a closed group of contacts, he discovered one day that his account had stopped working.

When he appealed to Microsoft for an explanation, a representative, Kayla, sent him an example picture that led to his account getting frozen. It was a “Reclining nude,” a painting by Amedeo Modigliani from 1917, from the permanent collection of the Metropolitan Museum of Art, a picture he took in London. Apparently, it violated Microsoft’s Code of Conduct, which forbids any image that “depicts nudity of any sort.”

The case echos a recent a mini-kerfuffle when Google (NSDQ: GOOG) removed the avatar of one well-known blogger because, in his picture, he was giving us “the finger.”

Ohajuru was confused about whether it was actually that one picture, or others like it. So he took to his photographs, discovering not only other paintings with nudity, but photos from beach holidays (lots of skin) and at least one other graphic work of art, piece of decorative art called the “Warren cup” with two men in an embrace (also naked, or are they nude?).

Were all these pictures also unacceptable to Microsoft, or just the one Modigliani? Pondering the question, Ohajuru—being of both artistic and technological inclinations—thought of an ironic parallel: “What Kayla and Microsoft have done, today, in 2012, was a almost an exact repetition of what happened when Amedeo Modigliani first exhibited his now acclaimed nudes in 1917, according to Modigliani’s Wikipedia entry.” He continues:

“Then:

On December 3, 1917, Modigliani’s first one-man exhibition opened at the Berthe Weill Gallery. The chief of the Paris police was scandalized by Modigliani’s nudes and forced him to close the exhibition within a few hours after its opening.

Now, to paraphrase Wikipedia

On January 8, 2012 Modigliani’s Reclining Nude, 1917 was uploaded by me to my SkyDrive. Microsoft was scandalized by Modigliani’s nude and forced me to delete the file within 48 hours.”

Rather than delete all those other pictures, Ohajuru took a calculated risk, and took away just the “Reclining nude,” replacing it with another image (this is a bit of classic art censorship protest, and also reminiscent of MG Siegler taking away his middle finger, and adding in a cute Google+ logo):

It worked, and now the account is up again.

Does that make sense? It doesn’t to me. Ohajuru’s conclusion, “The more things change the more they stay the same,” is certainly the case here—as is the fact that, as he notes, “Microsoft’s Code of Conduct policy confuses naked with nude.” One being objectifying, and the other being artistic.

But shouldn’t we expect a bit more from technology today? Given how many other images there were in Ohajuru’s SkyDrive that didn’t make Kayla and Microsoft flinch, the incident highlights not only the question of whether whether automatic image systems can be honed to differentiate between art and porm—but also the inconsistencies of such systems. If they work like this, they’re simply just ridiculous and pointless.

X Factor Maker FremantleMedia Has Beefed Up UK Digital Operations

2012-01-16T17:15:49Z

TV producer FremantleMedia UK has created a new digital division out of the existing operations of two of its constituent production companies.

It is pooling TalkbackThames’ digital team and Screenpop, Fremantle’s innovation and mass participation unit, for a new division that will focus on viewer engagement with TV shows.

Previously, TalkbackThames, which makes X Factor UK, commissioned a Tap To Clap feature from online indie producer Live Talkback to go inside the official mobile for this winter’s recent series of the song contest.

Screenpop company has previously made a video quiz for Sun Online and a viewer quiz for an interactive version of the resurrected TV gameshow Going For Gold.

FremantleMedia’s combined new unit is headed by Screenpop MD Peter Cassidy and will service the company’s other constituent production companies plus the FremantleMedia Enterprises overseas division.

The company says it is targeting “development of interactive formats and entertainment concept with a focus on mobile and second screen applications, direct to consumer transactions, social media and games”.

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Russia's Mail.ru Launches Its Own Twitter After China's Microblog Explosion

2012-01-16T10:27:56Z

Russia’s big Mail.ru portal is trying to ape Chinese companies’ microblog boom by launching its own Twitter clone. Futubra launched in beta Monday.

Alisher Usmanov, who owns almost a third of Mail.ru Group, also owns a majority of DST Global, which took a stake in Twitter itself with a 2011 investment.

Twitter has two million Russian-speaking users after translating its site to Russian last year, according to Yandex (via RIA). But the example of China, where microblogs - or, “weibo” - have exploded, shows indigenous services have gained more traction than foreigners.

Weibo use rose 296 percent to 249.9 million there through 2011, according to China Internet Network Information Center (CNNIC) data published today (via Reuters).

The growth is beginning to usher in a new era of greater transparency in society, as well as creating a huge new business opportunity for market-leading operator Sina (NSDQ: SINA) and Tencent, although China’s government has lately instructed operators to police messaging.

If Russian groups like Mail.ru can replicate their success, they could have a hit on their hands.

Russian president Dmitry Medvedev has already endorsed the original Twitter when he appeared at the company’s San Francisco HQ in 2010 to send his first tweet on an occasion Biz Stone called “one of the most special days in the history of Twitter” (via TechCrunch). Some citizens used Twitter to protest the re-election of prime minister Putin but their messages were purportedly swamped by a pro-Putin botnet.

Mail.ru Group CEO Dmitry Grishin (announcement): ”We are excited by the opportunity facing Futubra as microblogging is a fast growing segment which fits well into the Mail.Ru Group vision of the growth in internet communications. The focus in the near term will be product development and the building of new online communities.”

Updated: Twitter UK Poaches BBC Sport Social Media Editor As Olympics Nears

2012-01-13T12:35:47Z

Twitter looks like it is ramping up its staffing and operations in the UK: today it was announced that the company will be making a new hire, Lewis Wiltshire, who oversees social media for BBC Sport. The loss is a keen one for the BBC: among Wiltshire’s responsibilities, he was playing a big role in how the broadcaster would be covering the Olympics—taking place this year in London—across different platforms.

The announcement was made today by Twitter’s UK head, Tony Wang—fittingly enough, on Twitter—who described it as part of a team-building strategy at the social networking site.

Wiltshire will be starting his new job in March and, according to him (via Twitter), will “certainly be focusing on sport in the UK.”

Other details have yet to be made public, but the hire is coming just in time for London’s hosting of the Olympics this year. That is something that Wiltshire has already been focusing on from a social media standpoint for the BBC, so if any kind of Olympics strategy falls into his remit, he will have a head start on that.

We will be speaking with Tony Wang later today, to ask more questions. We will hopefully have more to add after that on the details of what Twitter plans to do around the Olympics and sports; and how/if this represents a new chapter in how the company plans to do more curation of information that passes through its network every day. That, at least, is certainly where an opportunity lies in hiring someone like this.

Meanwhile it is unclear right now who will be replacing Wiltshire at the BBC in his double-role of sports social media and Olympics platform coverage. We have reached out to the company and will update the post as we learn more.

Update: Wang had no comment on the 2012 Olympics but did tell me that Wiltshire’s hire is the first in an expansion of the company’s partner program in the UK; up to now hiring, he said, was focused not on this division but on ramping up sales and marketing people working in the company’s Sponsored Tweet service.

While Sponsored Tweets work more like ads, the partner group gets Twitter people to work with external businesses to get more out of Twitter—and for Twitter to subsequently have a stronger and more committed user base. “It’s all about helping partners in areas where we see a lot of twitter engagement already,” he said. Broadcastis one of those—when a popular show is on TV it trends on the social network. “So we work with our broadcast partners with creative integration and using twitter to drive viewership.”

Hiring someone with sports expertise is an obvious move for Twitter; sports is one of the most popular categories on the site, with several sporting events ranking among some of the most-trafficked of all events. Last week’s milestone effort from Tim Tebow for the Denver Broncos set a record for the most tweets per second: 9,420.

Cit-J Wire Demotix Adds Advertising, Giving 80 Percent To Contributors

2012-01-12T16:01:40Z

Demotix, the user journalism and photography upload service that is part-owned by Corbis, is adding an incremental new revenue stream.

The site has added web advertising, and says it will give 80 percent of the revenue to its top 100 highest-page viewed contributors.

Demotix‘s main model is to ingest submitted journalism material, syndicate it to professional media and share proceeds with the contributor.

Now it says it gets 1.3 million monthly page views from 400,000 unique visitors. “We’ve reached a point where Demotix.com is getting enough traffic to justify our adding advertising to the site,” CEO Turi Munthe writes.

“Since we’re a UGC site, we had to think about what to do with that revenue. It’s the hard work of our reporters as much as our work maintaining the website that generates the money. So off it goes back to the source: our contributors.”

Corbis invested in the London-based service in August 2011.

Paul Berry, CTO: I Left HuffPost For The Startup Bug-Or In This Case, Mouse

2012-01-10T22:54:30Z

Today it was revealed that Paul Berry, the longtime-CTO of AOL’s Huffington Post, will be leaving his role at the news site, along with the unrelated departure of the site’s managing editor, Nico Pitney. We spoke to Paul earlier about the social-media focused startup that he plans to launch next, and what he will be leaving behind.

The new startup—a “social platform” called Rebel Mouse—is currently still under wraps, although Berry tells us that more details will be emerging in the next few weeks.

What we do know already is that it will be based in New York and have quite a few other things in common with the Huffington Post: it will be focused around social media have a big emphasis on viral growth using “methodologies” he honed at HuffPost (more on that below); it will be mainly consumer-facing; and it will be built out by several former key executives from Huffington Post: in addition to Berry, he says he is also working with former CEO Eric Hippeau, former chief revenue officer Greg Coleman, and co-founders Kenneth Lerer and Jonah Perretti—all of whom left the company before Berry.

Despite these similarities and connections, Berry insists it will be quite a different product from the online news goliath that he helped create. “The intention is not to compete with HuffPost or big media companies,” was his flat answer to that question. “We intend to have a huge audience and a lot of users but not in a way that competes with HuffPost.”

The company has been funded with some money from Berry and some from Ken Lerer’s Lerer Ventures.

Berry describes his time with HuffPost as being with the company since “day two” of its life, and when you speak to him about the growth of the company, and how it mastered viral techniques to drive that growth, you really get the sense that HuffPost has been as much a technical phenomenon as it has been a news/media one.

The numbers speak to that, too. When Berry first started, the company had three million uniques per month. At the time of the AOL (NYSE: AOL) acquisition, it had 55 million uniques. As of today, the site has 120 million uniques per month and 1.7 billion page views—numbers that continue to grow, not least because the site is building out internationally.

“What I developed at HuffPost was a lean development methodology,” says Berry, who relies in part on a network of developers in Eastern Europe for some of the work. “I had done it before but had a chance to prove it on a wider scale. The basis of what we did at HuffPost was to learn how things go viral and how to make them go even more viral.

“A huge part of HuffPost was how we made the product and technology together, and how we innovated with Facebook, Google (NSDQ: GOOG), and Twitter to do that.” He says these methodologies, style, and (significantly) contacts to those huge traffic funnels, will all be a part of Rebel Mouse, too.

Berry will be leaving AOL on February 15, and he says his departure is not connected to any earnout connected to the acquisition of HuffPost by AOL, which it bought a year ago, in February 2011, for $315 million. The news of Berry’s and Pitney’s departures was first reported earlier today by Forbes.

“The acquisition was very good for me,” he admits, “but it was more about taking the time to do this professionally. It’s possibly a misplaced paternal sense, but it matters to me leave HuffPost in a good place and I’ve taken the time to do that well.” He notes that he’s hired people from top media properties like the BBC and New York Times (NYSE: NYT) to oversee areas like design, user interface and technical development, and all those people have stayed on “and are staying on.”

“I’m not leaving because I don’t believe in the mission anymore,” he says. “I’m leaving for the thrill of building something from nothing. It’s the startup bug.”

The other project that Berry will be devoting some time to will be in the running of a technology start-up incubator. This, too, will be drawing on HuffingtonPost experience. He says this will focus on a smaller number of companies—“this isn’t 500 startups or anything”—and it will apply “social approaches that we’ve learned to different vericals and areas.”

It sounds a little vague at the moment but the idea is to “help develop prototypes, demos and then help those startups seek funding as they gain traction.” This will be based in the original HuffingtonPost HQ.

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