Social Networking InView (March 2011)

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Social Networking InView
March 2011

©2011 by M/A/R/C® Research
Page 2  March 2011
Statistics/Trends
 A survey of online shoppers during the holiday season found that less than 5% said their purchases were
“primarily” influenced by social media. (St. Petersburg Times, 1/4/11)
 Twitter is being used by a group of linguistics researchers to track the appearance of regional dialects
within tweets and to see if certain words start “migrating” out of their regions because of Twitter. (San
Francisco Chronicle, 1/10/11)
 A recent survey of social media users found 80% of internet users in general are active in some kind of
voluntary group or social organization, such as a church group, sports league, parent group, book club, or
volunteer organization, but only 56% of non-internet users are active in such groups. Among the internet
users, 82% of social network users said they were active in a social group/organization and 85% of
Twitter users said they were similarly active. (Pew Internet Research report, 1/18/11)
 During the last half of 2010, roughly one-quarter of Facebook’s growth in terms of regular users came
from the United States and in December just 5% of new users were from the US. More new Facebook
users were based in India, Mexico, Brazil, Taiwan, the Philippines and Indonesia than in the US for the
last month of 2010. (Chicago Tribune, 1/24/11)
 Twitter use skyrocketed during this year’s Super Bowl, with 4,064 tweets sent each second – the highest
number of tweets per second ever recorded during a sporting event. (New York Times, 2/21/11)
 Facebook updated the options in its “relationship status” list to include domestic partnerships and civil
unions, so that gay and lesbian couples, or heterosexual couples who aren’t legally married, can properly
display their relationship status. (Houston Chronicle, 2/21/11)
 An Egyptian couple named their newborn baby girl Facebook as a tribute to the role that the social
networking site played in the recent Egyptian revolution. (Chicago Tribune, 2/22/11)
 During the Oscars, Twitter had a volume of 36.4 million tweets, spurred by ABC displaying the #oscar
hashtag on the screen during the show. The highest volume of tweets during the Oscars came during the
auto-tune montage, which turned many of the year’s biggest movies into musicals. (PaidContent.org, 2/28/11)
 A new survey found that over 40% of consumers said they want to receive communications from
marketers via Facebook, with nearly one-third listing it as their “preferred” communication channel.
Almost two-thirds of consumers want the companies to offer them discounts via Facebook, while just
over 40% want better customer service, fewer than 30% want branded games and 22% want company
news. The possibility of coupons was also the main reason why people said they use location-based
services like Foursquare. (Advertising Age, 2/28/11)
 According to a new survey of small- and medium-sized business owners, 70% said that they are “very” or
“somewhat” likely to use social networking sites to market their business in the next year, but almost
half also said that they “weren’t sure” how social networking sites would help their business. (TECHWEB,
3/7/11)

Business of Social Networking Sites
 Facebook said it would begin publicly reporting its financial results by April 2012 after Goldman Sachs
said it would invest $450 million in the company. Goldman sent a message out to potential investors
about the deal but the SEC contacted the investment firm about the “private Facebook offering” and
started an inquiry into it because of regulations regarding “general solicitation and advertising” when
dealing with private offerings. (New York Times, 1/7/11)
 MySpace laid off 500 employees, or nearly half of its staff, as a result of the site’s new organizational
redesign. The company said that its traffic is “trending positively” though, with 3.3 million new profiles
and a 4.4% rise in the number of mobile users. (PCMagazine.com, 1/11/11)
 Facebook and the US Justice Department announced that the social
network would start broadcasting Amber Alert messages. Facebook has
created separate Amber Alert pages for each state, plus the District of
Columbia, Puerto Rico and the US Virgin Islands. Users can “like” the
page for their state and receive Amber Alert bulletins, which they can
then share with their friends. (Los Angeles Times, 1/13/11)
 Facebook earned an estimated $1.86 billion in ad revenue during 2010,
but $740 million of that was from major advertisers like Coca-Cola or
AT&T. (PCMagazine.com, 1/18/11)
 Groupon rejected a $6 billion purchase offer from Google and started discussions with bankers about
launching its own IPO, with possible valuations at the $15 billion level. It already has raised $1 billion
from investors in one week, making it the largest start-up fundraising effort since DreamWorks
Animation in 1996. (New York Times, 1/14/11)
 Facebook raised more privacy concerns when it announced to app developers – not Facebook users –
that it would start making user mobile phone numbers and addresses available to the developers,
presumably for marketing purposes. Facebook said that it had created new permission levels for users to
grant access to their information, but if they haven’t switched the permission level yet, the users will get
a pop-up message when the app accesses their phone number or address information. (PCMagazine.com,
1/17/11)
 Facebook received a $1.5 billion investment from a joint venture by Goldman Sachs and a Russian
investment firm. The financing values Facebook as being worth $50 billion and shares of stock owned by
Facebook employees are trading at an “implied valuation” of $76 billion. (New York Times, 1/22/11)
 Facebook announced that it will only let users pay for virtual goods using Facebook Credits. Farmville
players will still use FarmBucks to pay for things within that game, but they can only buy the FarmBucks
by using Facebook Credits. (mediaweek.com, 1/24/11)

 Twitter is estimated to make $150 million in advertising revenue this year, triple the $45 million it made
in 2010. (brandweek.com, 1/24/11)
 Facebook launched a new advertising product called “Sponsored Stories,” which are created from pulling
user interactions with a brand’s apps, likes, page/wall posts or location check-ins. The “Sponsored
Stories” will displace ad messages that are just promotional copy. (brandweek.com, 1/25/11)
 LinkedIn filed plans for an IPO to raise $175 million in public stock. In the filing, LinkedIn released
financial data for the first time and reported revenue of $151.4 million for the first nine months of 2010,
up from $120.1 million in 2009 and $32.5 million in 2007. (San Francisco Chronicle, 1/30/11)
 Yahoo is denying rumors that it may close down or sell off its Flickr photo-sharing service. Traffic to Flickr
has shrunk 16% in 2010 to 21.3 million visitors, while at the same time the number of people using
Facebook’s photo features jumped 92% to 123.9 million users. (New York Times, 1/31/11)
 Gemalto has created a SIM card that is embedded with Facebook and allows a person with a GSM phone
to perform basic Facebook tasks like approving friend requests and updating their status without using
the phone’s data plan or downloading an app. The text information in the status updates, etc. is sent via
SMS. The “Facebook for SIM” card will require a paid subscription, but Gemalto is running a free trial
period. (PCMagazine.com, 2/4/11)
 Facebook tried to deflect the stories that revolutions in Tunisia and Egypt were helped in part by the
protestors using Facebook (and Twitter) to organize. The company doesn’t want to be seen as being
biased to one side or another because it fears that some countries might impose restrictions on it or try
to monitor its use. Because of Facebook’s policy about requiring users to use their real identity when
setting up an account, it ended up shutting down the protest pages set up by Google executive Wael
Ghonim during the Egyptian revolution because he had used a pseudonym to protect his identity. (New
York Times, 2/15/11)
 Twitter announced that it started a Twitter Translation Center and is
looking for volunteers to help translate all of the English language tweets
on its site into French, Indonesian, Italian, German, Japanese, Korean,
Russian, Spanish and Turkish. (San Francisco Chronicle, 2/15/11)
 The CEO of Twitter said that recent talk about Google buying his company
for as much as $10 billion was “just a rumor” but when asked about a
similar rumor with Facebook buying Twitter, he refused to comment at
all, leading some to speculate that a deal may be in the works. (Los Angeles Times, 2/15/11)
 Some industry analysts worry that the high valuations of many social media businesses - Facebook is
worth $52 billion, Zynga (the maker of Farmville and other Facebook games) is worth $10 billion and
Twitter is worth up to $10 billion – could be a sign of a new internet bubble. (San Francisco Chronicle, 2/20/11)

 Facebook has partnered with mobile phone maker HTC to create Facebook-enabled mobile phones. The
new HTC phones will have a special Facebook (F) button on them that will connect directly to Facebook.
If a person takes a picture with the phone and presses the F button, the picture will be uploaded to their
Facebook page, or if they are using Google Maps, pressing the F button will share your location on
Facebook. Facebook is also built into the phone’s software so that when a Facebook friend calls or sends
a text, the screen will display the friend’s latest Facebook status and alert about their birthday if it is
coming up. (Seattle Times, 2/15/11)
 Cameron and Tyler Winklevoss are contesting an out-of-court settlement they made in 2008 with Mark
Zuckerberg over who was really responsible for creating Facebook. The twins received a settlement
worth $160 million at the current valuation of the company in the agreement, but they claim that they
were “duped” by the terms in the settlement agreement and should have received four times the
number of Facebook shares than the settlement awarded them, which would be worth $600 million.
Facebook and Mark Zuckerberg have won many court rulings in the case so far, and the US Court of
Appeals Chief Judge handling the appeal said that he thinks the Winklevoss brothers “got everything you
would want in a contract” with the original settlement, so many industry experts predict they will lose
the appeal too. (Los Angeles Times, 2/24/11)
 An email from Groupon’s CEO to its staffers in early January revealed that the company’s revenue surged
from $33 million in 2009 to $760 million in 2010. More than one-third of its sales in 2010 came from
international sources, as the company acquired rivals in Europe and Asia during the year. (Wall Street Journal,
2/26/11)
 JPMorgan is reportedly in discussion with Twitter to have its Digital Growth Fund purchase 10% of the
company for $450 million, which would put the company’s overall value at $4.5 billion. (Financial Times,
2/27/11)
 Quora is a new social networking community created by two former
Facebook employees. The site lets users ask questions or answer questions
posted by other users. Currently it mostly has information about tech
startups/failures, entrepreneurship, web companies and social media
trends. There are some celebrities like Ashton Kutcher and Demi Moore
on it, but mostly the “famous people” are only famous in the tech
community. (Advertising Age, 2/28/11)
 The co-founder of Twitter told attendees at the World Economy and Future Forum that the company has
no plans to go public or get major private investments in the foreseeable future. He also said that the
rumors about JPMorgan buying a minority stake in Twitter were false. (Los Angeles Times, 3/4/11)
 Facebook and Skype are reportedly talking about integrating Skype’s video chatting technology into the
social networking site. Facebook already made video calling available between “friends” via Skype last
October, but did not include video chat at the time. (PCMagazine.com, 3/5/11)

Business Usage
 Toyota is running a campaign on Facebook in an attempt to determine the best way to refer to more
than one Prius, with choices such as “Priuses,” “Prien,” “Prium” and the most popular “Prii.” The poll is
also available through Toyota’s Car Town promotion that lets Car Town players explore a virtual version
of the Toyota showroom at this year’s Detroit Auto Show where new Prius models had their debut. The
Car Town campaign launched in early January, but had a pre-launch teaser with a mysterious tree that
appeared in the Car Town game interface. When the campaign began on January 10, the tree became a
“money tree” that grew each time a player made an in-game purchase of a Prius. After a player bought a
certain number of Prius cars, the tree would start sprouting gold coins that could be used to buy other
virtual rewards. (Promo, 1/18/11)
 Campbell Mithun’s summer interns will be chosen based on their Twitter skills instead of applications or
resumes. Intern candidates must submit 13 tweets during the period of February 13-25 and
communicate their personality and creative thinking through the tweets. (Star Tribune, 1/18/11)
 Ohio’s Heartland Council Girl Scout region is a test market for troops to offer a mobile cookie locator app
for iPhone and Android phones. The app will allow users to find grocery stores or other public locations
where Girl Scouts have a booth to sell cookies during March. The Heartland Council region is also testing
a “Cookie Club” website where people can request or “promise to buy” cookies, but not actually order
them. The Scouts still have to contact the buyers directly and set up a time to deliver the cookies and
receive payment for them. (Columbus Dispatch, 1/24/11)
 Some insurance companies are turning to social networks to watch out for fraud. One insurance
company stopped sending disability checks to a woman who had gone on medical leave due to
depression after they saw pictures on her Facebook page of her playing at a beach and hanging out with
friends in a bar. An industry expert said that other insurance companies might review the pages for
someone who claimed a back injury but then posts pictures of them running in a marathon. (Los Angeles
Times, 1/25/11)
 Avon, Mary Kay and other direct-sales cosmetics companies are turning to social media as a new channel
for marketing their products. Mary Kay’s Facebook page is just a year old, but it has more than 300,000
fans that participate in online polls and makeover contests or watch YouTube videos demonstrating new
products. Avon’s Mark line of cosmetics that is aimed at women age 18-34 has iPhone and Facebook
apps plus e-boutiques and a Twitter feed to keep customers up to date on new products and sales. (Los
Angeles Times, 1/30/11)
 A new survey found that 95% of foodservice operators at colleges and universities are using social media
to connect to their customers, with the most popular site being Facebook (91%), followed by MySpace
(32%), Twitter (22%), LinkedIn (5%) and Foursquare (1%). (Food Management, 2/1/11)
 OnStar is testing a feature that lets the system read Facebook posts to drivers and let them record and
post audio updates to their Facebook walls. (Orlando Sentinel, 2/2/11)

 Red Cross launched a holiday digital advertising campaign titled “Why the heck should I give to the Red
Cross?” The campaign is a riff off the internet meme “what the heck…” with “what the heck should I
make for dinner?” and “what the heck has Obama done so far?” trends that spread through Twitter and
Facebook status updates (although in those cases the word “heck” was replaced with another word). A
microsite posts Twitter factoids about what the Red Cross does in the US; viewers can retweet the
factoids or post them to their Facebook pages. In addition to the microsite and tweets, the Red Cross’
digital agency created a “Twibbon” graphic that includes the Red Cross icon that people can post as well.
(Medical Marketing and Media, 2/2011)
 For the month of February, seven airlines (Virgin America, United Airlines, American Airlines, Delta,
AirTran, US Airways and Alaska Airlines) will be giving their passengers free Facebook access during
flights that are equipped with Gogo Inflight Internet. (USA Today, 2/1/11)
 The Valentine’s Day holiday season saw many marketers turn to social media. Mattel ran a campaign on
Facebook and Twitter that asked people to vote on whether or not Barbie and Ken should get back
together (they split up on Valentine’s Day 2004). On Valentine’s Day itself, Barbie’s Facebook page
became a virtual store where people could buy Barbie and Ken items. It was the first time Mattel sold
products on Facebook. Victoria’s Secret offered e-Valentines that people could e-mail or send via a social
network. CBS created a “virtual gift” app on the Facebook page for its show “Mad Love.” The app let
users send their loved ones virtual hearts printed with “MAD 4U.” (USA Today, 2/11/11)
 Pinnacle Foods has turned to social media for its promotion of Aunt Jemima frozen breakfast meals. The
social media campaign is centered around a new Facebook page that has videos showing how the
pancakes are made, recipes for using the frozen products at home to make other items, plus
downloadable coupons. (brandweek.com, 2/17/11)
 Disney has bought Togetherville, a social network for kids aged 10 and under. Togetherville lets kids
connect with their real-world friends in a safe virtual neighborhood with parental supervision. (Los Angeles
Times, 2/25/11)
 According to a report from Kaplan Test Prep, 82% of the surveyed college admissions officers said they
used Facebook to recruit prospective students, while only 56% said they used MySpace or YouTube for
that purpose. When asked about that survey, Kaplan pointed out that the 82% number was driven by the
fact that 71% of college admissions officer said that they or a fellow admissions officer had received
Facebook “friend requests” on Facebook or MySpace. (PCMagazine.com, 2/27/11)
 Kraft is playing “jinx” with its social media fans. When it finds two people Tweeting about its Kraft
Macaroni & Cheese, it will send both of them a message informing them of their “Mac & Jinx” and a link.
The first person in that pair to click on the link and give Kraft their home address will receive a free
product from Kraft Macaroni & Cheese and an official “Mac & Jinx” t-shirt. (Advertising Age, 3/8/11)
 Warner Bros. announced that it will test on-demand rentals of movies through Facebook. The first film
available to rent via Facebook is “The Dark Knight” and it costs $3 or 30 Facebook Credits to rent. (New York
Post, 3/9/11)

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Social Networking InView (March 2011)

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