Facebook Finally Figured Out How to Make Money Off of Your Phone

Mark Zuckerberg.  Ariel Zambelich/WIRED

Two years ago, you didn't want to be Mark #Zuckerberg. Sure, there’s the whole billionaire thing, but no personal fortune was going to buy the young CEO out of his first earnings call. The Wall Street skeptics were circling, and within little more than a month, the value of the #Facebook shares on which that fortune was built bottomed out at half their opening-day value.

Despite the pressure, Zuckerberg sounded confident enough on that first call with analysts, and it turned out he had good reason. Back then, doubtful investors were battering Facebook’s stock on the fear its business couldn’t make the transition from desktop to smartphone and tablet. Now a grizzled 30-year-old with a decade of experience running Facebook, the world’s most famous founder oversees a company that appears to have cracked the code for making money in the mobile era.

FACEBOOK IS SHOWING THAT MOBILE WAS THE MOST NATURAL MEDIUM FOR ITS BUSINESS ALL ALONG.

With Facebook shares hitting an all-time high in after-hours trading, it’s easy to forget how close the company was to being written off after its bungled IPO in May 2012. “As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium will become hard to ignore,” media pundit Michael Wolff wrote that year. “The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else.”

The Web Was Never Really the Future

Wolff’s mistake—and he was far from alone—was to assume that the web held the key to Facebook’s, or anyone’s, future. And he really can’t be faulted too much for that assumption. No one at the time had really figured out how to make mobile ads work—if anyone had, they’d be the billionaires now. Facebook hadn’t figured it out, either. In its second earnings call after going public, the company reported that mobile accounted for 14 percent of its ad revenue. With smartphones quickly becoming the first screen, that wasn’t good enough.

Fast-forward to yesterday. The company reported that nearly 400 million users access Facebook only via mobile devices—a fatal number if the company hadn’t figured out how to make mobile ads work. But apparently it has. Mobile ads now account for 62 percent of Facebook’s overall ad revenue, which is up by two-thirds compared to the same time last year. To put that in context, mobile ad revenue alone this past quarter was nearly $500 million greater than the company’s total revenue two years ago. Facebook’s approach of targeting users with mobile ads right in their News Feeds hasn’t been the alienating turn-off skeptics feared.

Instead, Facebook seems to be succeeding by creating more immediate, intimate connections between mobile users and advertisers than any desktop-browser sidebar could ever hope to do. (Or at least, Facebook has convinced advertisers that it has.) From the “Install Now” option on app ads to experiments with a “Buy” button that effectively turns the News Feed into a storefront, the company is creating ads that shorten the distance between seeing and buying, all while slotting smoothly into the stream. You don’t have to search for anything; your show isn’t interrupted. Far from failing to make the transition away from the web, Facebook is showing that mobile was the most natural medium for its business all along. --Wired

UK data regulator probes Facebook over psychological experiment - FT

Facebook website pages opened in an internet browser is seen in this photo illustration taken in Lavigny May 16, 2012.

(Reuters) - The Information Commissioner's Office (ICO) in the #UK is investigating whether #Facebook Inc (FB.O) broke data protection laws when it allowed researchers to conduct a psychological experiment on users of the social network, the Financial Times reported.

The data regulator is probing the experiment and plans to ask Facebook questions, the newspaper reported. It was too early to tell exactly what part of the law Facebook may have infringed, the FT quoted a spokesperson for the ICO as saying. (on.ft.com/1iTezCj)

Facebook's psychological experiment on nearly 700,000 unwitting users in 2012 has caused a social-media furor. The experiment was to find if Facebook could alter the emotional state of its users and prompt them to post either more positive or negative content.

Representatives for ICO and Facebook did not immediately respond to emails seeking comment.

The ICO monitors how personal data is used and has the power to force organizations to change their policies and levy fines of up to 500,000 pounds ($839,500).

Internet privacy concerns shot up the agenda last year when former U.S. National Security Agency contractor Edward Snowden revealed details of mass U.S. surveillance programs involving European citizens and some heads of state.

Last week, Google Inc (GOOGL.O) said it has begun removing some search results to comply with a European Union ruling upholding citizens' right to have objectionable personal information about them hidden in search engines. Reuters 

Facebook deliberately made people sad. This ought to be the final straw

Facebook has inadvertently highlighted just how actively it interferes.' Photograph: Shen Hong/Xinhua Press/Corbis

For one week in January 2012, Facebook deliberately made about 155,000 people sad, just to see if it could.

Stated that bluntly, it's not hard to see why the company's study, which was published in the prestigious #PNAS journal on 17 June, has elicited such a strong negative reaction.

To be fair to the firm, it also made a similar number of people happy. The study involved examining #Facebook profiles for evidence of "emotional contagion", trying to find out whether being exposed to specific emotions invokes that mood in readers. For some, that meant 90% of all "positive" posts were removed from their newsfeed for a week, rendering the social network a pit of despair. Even more so than normal.

Adam Kramer, Facebook's data scientist who led the research, explained the company's motivations in a subsequent post on his Facebook account. "We felt that it was important to investigate the common worry that seeing friends post positive content leads to people feeling negative or left out," he wrote. "At the same time, we were concerned that exposure to friends' negativity might lead people to avoid visiting Facebook."

Facebook's official response to the anger was odd, and strangely tangential to the matter at hand. "This research was conducted for a single week in 2012 and none of the data used was associated with a specific person's Facebook account," it said in a statement to Forbes' Kashmir Hill. "There is no unnecessary collection of people's data in connection with these research initiatives and all data is stored securely." But, for once, the discomfort with what Facebook is doing isn't about its ongoing war with Google over who can know the most about our lives.

Instead, it's about … well, what? It's weirdly hard to put a finger on what, specifically, is upsetting about the study. For some, particularly fellow researchers, the issue is the failure to garner informed consent from the nearly 700,000 subjects.

But the issue of consent also doesn't quite explain why we're comfortable with some types of uninformed research on us, but not others. Like almost every major tech firm, Facebook practices A/B testing, a design practice that involves changing the site for some proportion of its visitors in order to gauge their responses. Google famously A/B tests nearly every aspect of its product, right down to which shade of blue works best for adverts. There's no consent given in these cases, yet criticism is rarely voiced. So what's the material difference here?

Part of it may be in the company's motivations. At least when a multinational company, which knows everything about us and controls the very means of communication with our loved ones, acts to try and maximise its profit, it's predictable. There's something altogether unsettling about the possibility that Facebook experiments on its users out of little more than curiosity.

The issue also comes with what was being manipulated. In most A/B tests, the dependent variable (the thing the study is trying to affect) is something like click rates, or time on page. In this case, it was the emotion of the users.

That's already creepy, but given the size of the study, it's near-certain that some of the people involved suffered from, say, depression. Deliberately attempting to negatively affect the emotion of people with mental illness is not typically considered an OK thing to do. And when you look to the future, it gets even scarier.

The Facebook news feed is already parcelled up to advertisers in terrifyingly small demographic portions. Want to sell only to gay women between the ages of 45 and 49 who have liked the Oxford Conservative Association page? You can. Facebook's research offers the spectre of a company paying to only advertise to people already in a bad mood – or even a company paying to improve the mood.

And yet, even manipulating emotions gets a pass in other situations. From TV news to political speeches, and, of course, advertisements, organisations have been trying to do it for years, and largely succeeding.

I think what we're feeling, as we contemplate being rats in Facebook's lab, is the deep unease that what we think of as little more than a communications medium is actually something far more powerful. Facebook has so far successfully presented an image of neutrality, of not having an agenda or a viewpoint, that we think of it as something similar to Royal Mail or BT. Even before the study was published, that edifice was crumbling. Your mail doesn't get binned if the postman thinks it's boring.

But with this study, Facebook has inadvertently highlighted, to a mostly uncaring community, just how actively it interferes. Up until now, it's mostly shown off the times when it's done so with beneficent aims: promoting organ donors, or voters. Now, that mask has dropped.

For me, enough was enough even before this weekend. I quit the social network at the end of February, tired of a service that seemed increasingly oriented away from making it easy to talk to friends and family, towards maximising eyeballs on adverts. My hope is that now, others will be prompted to join me. But each time more evidence surfaces of the network's fundamental amorality, and each time outrage flares up only to be forgotten a week later, that hope sinks a little further.
The Guardian 

Facebook helps find kidnapped newborn in Quebec

The online detectives who helped find baby Victoria were identified. Photo / Thinkstock

The mother of a day-old infant snatched from a Quebec hospital says she's grateful to everyone who helped bring home her baby - especially the group of people who hunted down the alleged kidnapper thanks to a Facebook post.

Police issued an Amber Alert after the newborn was abducted from the mother's hospital room in Trois-Rivieres, Quebec, by a woman allegedly wearing scrubs and posing as a nurse who said she needed to weigh the baby.

The alert, which included a security-camera photo of the suspect and a description of her car, was splashed across mainstream and social media within minutes.Four young local residents wasted little time picking up the cause and guided police to the woman's home, where officers found the baby unharmed three hours later. Police also arrested a woman in her early 20s in connection with the kidnapping.

"Every click, every share made the difference," the infant's mother, Melissa McMahon, wrote in a post on her Facebook page.
"Four marvellous people, whom we had the chance to meet, identified this woman thanks to Facebook ... We felt a huge amount of support from the public. This victory is for you, too!!!"

The online detectives who helped find baby Victoria were identified as Charlene Plante, Marc-Andre Cote, Sharelle Bergeron and Melizanne Bergeron.

Melizanne Bergeron told reporters in Trois-Rivieres that she came across the information about the kidnapping on Facebook and showed the photo of the suspect to her friend Plante, who realised the woman was her neighbour.

She said they spotted the vehicle described in the alert parked outside the building, saw signs that someone was inside and called police. Officers, she added, arrived on the scene quickly and broke down the woman's door.

"Thirty seconds after, the baby was in the hands of the police," said Melizanne Bergeron, who touched Victoria as the officer cradling the infant walked past. "It was the best moment in my life. We were crying."

Plante told reporters they went with police to the hospital, where McMahon and her spouse, Simon Boisclair, asked to meet the people who had helped rescue Victoria.

"The mother was crying and she was very happy," said Plante. "I don't realise it (yet), I'm just a person like (anybody else) and I saved a life."

Melizanne Bergeron posted a video on her Facebook page of young women crying as they greeted a police officer carrying a tiny, blanket-wrapped baby.

McMahon, who also thanked hospital staff, police, the media and the public for helping find Victoria, called those hours without her infant the worst of her life.

She and Boisclair posted a photo of themselves holding Victoria.

"The powerlessness we felt in this situation was difficult to accept," wrote McMahon, who said she sprinted after the woman toward the hospital exit after sensing something was wrong.

"The worst-possible scenarios were looping in our heads ... To no longer have her in my arms after barely 16 hours of life was unreal."

McMahon said patients and visitors near the door provided information about the suspect and her vehicle, described in the alert as a red Toyota hatchback with a "Baby on Board" sticker on the rear window.

Quebec provincial police Sgt. Claude Denis said it was too early to say whether the suspect would be arraigned Tuesday. He said possible criminal charges include kidnapping.

"The suspect is in hospital right now and investigators will meet her when her condition allows for that," he said in an interview. The NewZeland Herald