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Facebook's hotly anticipated IPO is months away, but investors apparently can't wait that long to jump on the social-media stock bandwagon. Companies in the business of connecting people online, mainly for marketing purposes, have seen their shares rocket 35% or more this year as investors scramble for a piece of the Facebook effect.
The big gains come as many social-media companies report financial results for the first time since going public. Zynga, the leading social-gaming company, reported a fourth-quarter loss of $435 million after the markets' close Tuesday.
"Facebook is shining a light on both the initial public offering market and on Facebook wannabes," says Francis Gaskins of IPOdesktop.com.
The social-media stock frenzy is apparent in the:
Big 2012 gains by U.S. social-media leaders. LinkedIn, a site that allows professionals to link with each other, and Zynga, an online gaming firm, are the key public U.S. social-networking stocks. LinkedIn and Zynga are up 35% and 53% in 2012, respectively.
Solid rises by global social-media stocks. Renren and Quepasa, generally regarded as the Facebooks of China and Latin America, have rebounded along with a rally of stocks in emerging markets. Shares of Renren and Quepasa are up 53% and 37%, respectively, undoing some of their poor performances last year.
Tailwind from related Internet stocks. Pandora, while not exactly a social-media stock, is enjoying the interest in Internet stocks, gaining 33%. The USA TODAY Internet 50 index, a collection of 50 big Internet stocks, is up 15%.
Facebook's IPO filing showed how profitable it is and silenced critics of the social-media business, says Michael Pachter of Wedbush Securities. The filing revealed how critical Zynga is to Facebook's success and how the two are quickly dominating the industry, says Colin Sebastian of Robert W. Baird. Investors are wondering if this is a new area that's so big they have to... newsfactor.com »
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| 2 | When Red Robin Gourmet Burgers introduced its new Tavern Double burger line last month, the company had to get everything right. So it turned to social media.
The 460-restaurant chain used an internal social network that resembles Facebook to teach its managers everything from the recipes to the best, fastest way to make them. Instead of mailing out spiral-bound books, getting feedback during executives' sporadic store visits and taking six months to act on advice from the trenches, the network's freewheeling discussion and video produced results in days. Red Robin is already kitchen-testing recipe tweaks based on customer feedback -- and the four new sandwiches just hit the table April 30.
Facebook's initial public offering Friday -- the largest by a technology company -- is a watershed moment for the consumer side of the Web, but social networking's real economic impact might be ahead as companies learn how to harness "social business" tools.
Beyond advertising on Facebook or Twitter, companies are using social networks to build teams that solve problems faster, share information better among their employees and partners, bring customer ideas for new product designs to market earlier, and redesign all kinds of corporate software in Facebook's easy-to-learn style.
"At a very basic level, Facebook is the most popular application ever, with a billion people who know how to use it," said Marc Benioff, chief executive of salesforce.com, whose Chatter social-networking tools are used by 150,000 companies. "The ability to access information is much better because it's easier to get to it."
After a slow start, Big Business is embracing social media in a big way. Forrester Research says the sales of software to run corporate social networks will grow 61% a year and be a $6.4 billion business by 2016.
Two-thirds of big companies surveyed now use Web 2.0 tools such as social networks... newsfactor.com » | | 3 | Should students and teachers ever be friends on Facebook? School districts across the country, including the nation's largest, are weighing that question as they seek to balance the risks of inappropriate contact with the academic benefits of social networking.
At least 40 school districts nationwide have approved social media policies. Schools in New York City and Florida have disciplined teachers for Facebook activity, and Missouri legislators recently acquiesced to teachers' objections to a strict statewide policy.
In the New York cases, one teacher friended several female students and wrote comments including "this is sexy" under their photos, investigators said. A substitute teacher sent a message to a student saying that her boyfriend did not "deserve a beautiful girl like you."
Such behavior clearly oversteps boundaries, but some teachers say social media -- in particular Facebook -- can be a vital educational resource if used appropriately, especially because it's a primary means of communication for today's youngsters.
"Email is becoming a dinosaur," said David Roush, who teaches media communications and television production at a Bronx high school. "Letters home are becoming a dinosaur. The old methods of engaging our students and our parents are starting to die."
New York Chancellor Dennis Walcott plans to release social media guidelines this month, saying recently that teachers "don't want to be put in a situation that could either compromise them or be misinterpreted."
Roush does not accept students as friends on his personal Facebook page but has created a separate profile to communicate with them -- something that runs afoul of Facebook rules restricting users to a single profile. He used the page to get the word out quickly about a summer internship on a cable-access show, and a student who learned about it from the Facebook post won it.
"If I would have emailed him, if I had tried calling... newsfactor.com » | | 4 |  NEW YORK (Reuters) - The hype over Facebook's initial public offering has excited investors revisiting other social media companies, even though most of those stocks have plunged since the fanfare of their own IPOs.
Reuters: Internet News » | | 5 | In recent weeks, Facebook has been wrangling with the Federal Trade Commission about whether the social-media Web site is violating users' privacy by making public too much of their personal information.
Far more quietly, another debate is brewing about a different side of online privacy: what Facebook is learning about those who visit its Web site.
Facebook officials are now acknowledging that the social-media giant has been able to create a running log of the Web pages that each of its 800 million or so members has visited during the previous 90 days. Facebook also keeps close track of where millions more non-members of the social network go on the Web, after they visit a Facebook Web page for any reason.
To do this, the company relies on tracking cookie technologies similar to the controversial systems used by Google, Adobe, Microsoft, Yahoo and others in the online advertising industry, says Arturo Bejar, Facebook's engineering director.
Facebook's efforts to track the browsing habits of visitors to its site have made the company a player in the "Do Not Track" debate, which focuses on whether consumers should be able to prevent Web sites from tracking their online activity.
For online business and social-media sites, such information can be particularly valuable in helping them tailor online ads to specific visitors. But privacy advocates worry about how else the information might be used, and whether it might be sold to third parties.
New guidelines for online privacy are being hashed out in Congress and by the World Wide Web Consortium, which sets standards for the Internet.
If privacy advocates get their way, consumers soon could be empowered to stop or limit tech companies and ad networks from tracking them wherever they go online. But the online advertising industry has dug in its heels, trying to retain the current self-regulatory system.
Online tracking... newsfactor.com » | | 6 | For years, Coca-Cola has told us that so many parts of life "go better" with the iconic soft drink. You can now add social media to the list as well.
Coca-Cola has quietly become one of the most popular brands on Facebook, along with such pop-culture icons as Lady Gaga, Rihanna and Eminem. Coke, with its 35 million fans, is the 16th-most-popular Facebook page. Disney is No. 23.
Advertising Age [has] named Coke its "Marketer of the Year," citing it as an example of how small and midsize brands also "can use creative stunts and strategic partnerships to get a lot done on a smaller budget."
On Facebook, Coca-Cola has received more than 35 million "likes," and Wendy Clark, Coke's senior vice president of integrated marketing who oversees the social-media effort, says having all those fans respond to Coke is meaningful.
"Fans are twice as likely to consume and 10 times more likely to purchase than non-fans," she says, in an interview at Coke headquarters here.
The emphasis on social media has clearly paid off, even though it's only part of Coke's overall $2.9 billion advertising strategy for TV, radio, Internet, print advertising and billboards.
Coke, the world's largest beverage company with some 500 different drinks -- soft drinks, teas, coffees, juices and water -- says its overall beverage volume is up 6% worldwide year to date; 3% for Coke alone. About 1.7 billion drinks of Coke are served daily in cans and bottles and from vending machines.
USA TODAY visited Coke here in an off-campus semi-secret (there's no Coke branding on the outside) warehouse facility less than a mile from Coke headquarters. Inside, there are no iconic red Coke logos. The one nod to its legacy: a new Coke vending machine that offers 125 different flavor combinations of Coke, Sprite, Fanta and other company products.
The interview... newsfactor.com » | | 7 | Social-media companies have "friended" the 2012 presidential contest at a level almost unimaginable just four years ago, hosting debates and sponsoring presidential town halls while remaining indispensable tools for candidates looking to connect with voters in the digital sphere.
Giants like Facebook and Google cast their involvement as civic engagement, saying they are eager to help facilitate the national political conversation and encourage people to vote. But their stepped-up political presence comes as those companies and others hire lobbyists, form political action committees and nurture their relationships with lawmakers whose policy decisions affect the companies' bottom line.
"The exposure -- being branded as `the' place to go for social media -- has huge economic consequences for these companies," said Heather LaMarre, a journalism professor at the University of Minnesota who studies politics and the Internet. "When they appear to be socially active and engaged in democracy, they develop a vast well of good will with the political elites who have the ability to make or break them in the future."
Facebook, by far the largest and most influential of the online social networks, formed a PAC this month to make contributions to candidates. The company also spent $550,000 for 21 lobbyists in the first half of this year to help it navigate potential legislative battles over privacy, patent and regulatory issues. That figure is small compared to other media companies of its size, but well on its way to double the $350,000 it spent in all of 2010, according to the Center for Responsive Politics, which studies political money and influence.
At the same time, Facebook has boosted its visibility in the presidential contest. The company is scheduled to co-host a Republican primary debate in New Hampshire with NBC's Meet the Press show days before that state's first in the nation primary. Facebook founder... newsfactor.com » | | 8 | Facebook had 140.3 million U.S. adult visitors last May, when the social networking site reached 70 percent of all active U.S. Internet users, according to a new Nielsen report. Moreover, U.S. adults collectively spent nearly 53.5 billion minutes on Facebook during the month, the firm's researchers said.
With respect to the sheer amount of time users spent at the website last May, Facebook dramatically outperformed Yahoo (17.2 billion minutes), Google (12.5 billion minutes), AOL (11.4 billion minutes), Windows Live (9.5 billion minutes, including visits to MSN and Bing), and YouTube (9.1 billion minutes). And in the social networking category, Facebook bested its nearest rival Blogger (723.8 million minutes).
Nielsen noted that emerging social-media player Tumblr nearly tripled its audience during May in comparison with the year-earlier period. Still, the new report underlines just how powerful Facebook has become with respect "to connecting people with just about everything they watch and buy," Nielsen researchers said.
Overall, social networks and blogs accounted for nearly a quarter of the total number of minutes that adult Americans spent on the Internet -- and with 53 percent of active adult social networkers following a specific brand. Nielsen also observed that nearly 40 percent of social-media users were accessing social-media content from their mobile phones.
Influencing Purchase Decisions
The value of the time consumers spend online and on social networks and blogs is most visible through the influence on purchase decisions, Nielsen observed.
"For instance, 60 percent of those who use three or more digital means of research for product purchases learned about a specific brand or retailer from a social networking site," Nielsen researchers wrote in a new report. And within this group, 48 percent "responded to a retailer's offer posted on Facebook or Twitter."
In comparison to the average Internet surfer, active social-media users are 75... newsfactor.com » | | 9 | Just a few years ago, John Pohlig might have hung up balloons and perhaps an inflatable gorilla outside this Honda dealership here to attract shoppers.
Instead, he's posting notes on Facebook and other social-media sites. The effort is aimed at getting people to comment on what kind of car they're likely to drive on a vacation -- and includes dangling the chance to win a free iPad in return for a "like" endorsement on Facebook.
Four thousand "likes" later, and Scott Robinson Honda has a huge Facebook base. But can Pohlig, the dealer's marketing director, point to actual car sales from his activities?
"No," he says. "But we're building relevance out there. Our objective is to reach as many people as possible. Over the long run, this will help build our business and our company."
Active Facebook users can't help but notice that more businesses are creeping into the conversation on the social-networking site -- and that local car dealers are among the most aggressive and prominent talkers. Some 41% of dealers now have Facebook pages, CNW Research says.
Most dealers, however, farm out the social-media-posting work. "Their niche is selling and servicing cars," says Richard Valenta, founder and CEO of Irvine, Calif.-based TK Carsites, which provides Internet marketing services for dealers.
Matthew Funk, an aspiring Los Angeles novelist, is one of the TK Carsites writers who posts Facebook notes for dealers and assists them with their strategic plans.
"Auto dealers not on Facebook are missing the boat, because that's where their customers are," he says. "And that's where their customers expect them to be."
Social-Media Assistance
Valenta's firm helps some 40 dealers nationwide with their daily Facebook image, both in writing notes and advising them on social-media strategy. TK Carsites' rates start at $700 monthly for basic Facebook marketing and go up to $8,000 monthly for Web site... newsfactor.com » | | 10 | Social-media apps -- those ubiquitous little programs that allow you to do cool things with your computer and mobile devices -- have introduced unprecedented risks now being discussed as part of the push for stronger federal privacy laws.
The problem: Anyone can introduce a social-media app that ties directly into Facebook, Twitter, Foursquare and other popular services designed primarily to sell advertising, says Craig Spiezle, executive director of the non-profit advocacy group Online Trust Alliance.
There is little stopping an application developer from "combining and appending" personal data extracted from multiple sources.
The goal: amass user profiles for advertisers. "Individually, these may appear to be like a few pixels of a photo, but when combined (they) can provide a comprehensive mosaic of a user," says Spiezle.
You download a social-media app when you click a Facebook "like" button embedded on a friend's blog, participate in an online poll, or try out a new wordplay game, says Michael Fertik, CEO of privacy services firm Reputation.com
Some 10,000 new Web sites integrate with Facebook every day, and Facebook members alone install some 20 million social-media apps every day, according to Facebook.
"We often don't know we're signing up for an app, and we have no clue how much information about us that app is collecting," says Fertik.
Many consumers join a social network assuming information divulged there won't go much beyond trusted family and friends. But the apps are walled off from each other. Most require setting up an account accessed by typing a valid e-mail address and password, says Kurt Baumgartner, senior researcher at Kaspersky Lab.
Many consumers fall into the habit of using the same e-mail account and password to access multiple apps. "It becomes more convenient to use the same username and password combination across personal, financial, e-mail and work accounts," says Baumgartner. "But that can make... newsfactor.com » | | 11 | SAN FRANCISCO (Reuters) - Kleiner Perkins will team up with Facebook, Zynga, Amazon.com and other media corporations to set up a $250 million fund to invest in social media startups.
Reuters: Internet News » | | 12 | LONDON (Reuters) - Employees who fritter time away on Facebook, Twitter and other social media Web sites are costing British businesses billions, new research suggests.
Reuters: Internet News » |
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