Post-acquisition Tuenti expands beyond Spain

MADRID - I originally blogged about Tuenti in April 2008 here. Over four years on from then, and things have evolved dramatically for the Spanish start-up (with international founders).

Tuenti now has over 13 million users and belongs to Telefonica (acquired in 2010). Far from maintaining its traditional approach of "acquire startup and shove under doormat", Telefonica has embraced the potential of Tuenti and has taken it under the umbrella of Telefonica Digital.

Make no mistake, with the new Telefonica Digital division, the European operator has big plans to drive revenue and traffic growth from its numerous digital assets (including Jajah, acquired in 2009).For example, it launched the "Tu Me" free voice and messaging app earlier this year. Now Tuenti is opening up to English,  Portuguese, French, German, Italian, Dutch, Slovak, and Czech audiences.

Monetizing social networks is no simple task when a large part of the audience accesses the service via mobile instead of web (witness Facebook), but in the short term it can open up new markets for Telefonica and drive business across its digital asset. Also, Tuenti prides itself on its additional levels of privacy security, in terms of both sharing and identity, which will allow it to offer an edge compared to other social networking services.

Facebook and Nielsen launch joint ad effectiveness product

Sheryl Sandberg, Facebook new COO, more recently VP of Global Ad Sales at Google, talked today to the press about the launch of the joint Nielsen/Facebook product to measure the effectivess of ad campaigns on Facebook web and mobile platforms.

Dubbed Nielsen Brand Lift, the new service is designed to help Facebook demonstrate that online ads on their social network are effective...as Facebook is expected to turnover more than $500m in the latest reporting year (most of which from ad sales), it is essential that they convince advertisers that this ad spend pays off. Ad sales for Facebook increased more than 70% this year compared to last year thanks to its growing user base, now exceeding 300m globally.

After their acquisition of Friendfeed earlier in the year, Facebook steps on the gas again to maintain its social networking supremacy and introduce a tool that will undoubtedly help justify ad spend. This is even more important as more and more of their users move to the mobile platform in order to educate advertisers of the high impact and effectiveness of this medium.

Facebook for Android -coming soon

The summer holiday season being in full swing, it is that time of the year when 'real' news gets replaced with products of the rumour mill.

Speculation over what the future may bring once the industry movers and shakers are back in their office seats is rife.

One rumour to have recently hit the web is the launch of a new Facebook app for the Android platform. This would be a logical step for Facebook, having recently announced the launch of a revamped iPhone application (which will allow video uploads in addition to current photo uploads).

However, it seems Facebook is relying on external resources from the Android team at Google rather than managing all development in-house, so exactly when the app will be released involves a large degree of guesswork.

A Facebook launch on Android would give a big boost to Android's positioning vis-a-vis the iPhone, at a time when over 12 new Android devices are due to hit the market worldwide in Q3 and Q4 of this year.

The Android Market still has some catch up to do with respect to the iTunes app Store, with many apps still failing to project that sleek finish and desirability endemic to all things Apple.

Plus, if we look at a chart of daily worldwide releases of new apps on the Android market over the last 100 days (courtesy of androlib.com), things seem to be plateau-ing at Android and a new stimulus is required to pick up the momentum if Android is to realise its potential as a serious contender to the iPhone.

Kevin Kelly Highlights Persistence Paradox of Social Networks

Kevin Kelly, who I previously covered in a blog post on his 'The One' vision, recently highlighted on his own site the results of researcher Bernardo Huberman, now at HP Labs of what is defined as the 'Persistence Paradox'.

Apparently:

"People persistently upload content to social media sites, hoping for the highly unlikely outcome of topping the charts and reaching a wide audience. And yet, an analysis of the production histories and success dynamics of 10 million videos from YouTube revealed that the more frequently an individual uploads content the less likely it is that it will reach a success threshold. This paradoxical result is further compounded by the fact that the average quality of submissions does increase with the number of uploads, with the likelihood of success less than that of playing a lottery."

The conclusion suggests that increasing uploads improves quality but not hits.

Unfortunately, the paper does not examine the issue of photo uploads, and any link between number of uploads and user motivation/success in achieving his goals.

Had it done so, it may have offered some useful insights for Facebook, now the world's second largest online repository of photos after ImageShack (with 20bn images). Techcrunch recently reported that it has earmarked $100m to buy servers-with $30m spent this year alone with storage provider NetApp.

All of this just as relevant for pure play mobile social networks though on a lower scale-while uploading of photos from mobile is fairly standard, upload speeds for photos (let alone videos) mean data volumes still remain relatively low.

Why now is a good time to invest in mobile start-ups

Global financial meltdown...credit crunch...government bailout...fiscal tightening...all these words will be very familiar to everyone following the unfolding of financial events on both sides of the atlantic. The picture for stock holders and bond holders, from private investors to pension plan owners, is not pretty.

That small proportion of wealthy individuals around the world are faced with some stark choices for making the most of their capital...look to preserve it by adopting a risk-averse approach (and buy gold bullion) or sit on their cash and ride out the storm, wary of potential bank collapses.

Neither of these two options offer the true capitalist a decent return. But, as always, there is money to be made in times of crises and parts of the economy that will fare better than others. The mobile sector is by no means immune to the downturn, and while operator revenues are likely to stay flat (guarded by inelastic demand), other parts will grow.

Mobile web is at an inflection point in terms of its global growth, moving from niche to mainstream, from Mobile 1.0 to Mobile 2.0, and there will be a number of competent start-ups that, though small today, will be huge tomorrow.

The great news is that the relative risk of investing in these start-ups has decreased compared to a year ago, given the drastically reduced equity returns from quoted companies. In addition, many of these quoted companies have either cut or withdrawn their dividend, and so look and feel more like growth stocks.

Fancy a flutter on an equity investment? My advice is, look at the opportunities out there to fund a mobile web start-up: it will be not much riskier than a blue-chip investment, will certainly be more fun to follow and, you never know, could be your next mobile equivalent of Facebook.

Facebook Privacy Video-Big Brother is watching

A scary video I picked up from Luca Conti's excellent blog, Pandemia.info, that stokes the fire of the controversial privacy policy and use of personal data by Facebook.

If you have a Facebook account, this video will make you think twice about exactly what information you put up on your profile...

War of the Social Networks

I'm posting this humorous video short from current.com that illustrates in a fun way how saturation has arrived to the world of traditional online social networks.

Hope you enjoy it!

Facebook Personal Details at Risk?

A report by the BBC yesterday highlights that personal details of users on Facebook could be 'harvested' with relative ease by using mailicious code hiding behind any one of the numerous applications available to users.

This potential privacy scare comes on the back of a string of identity theft concerns facing Facebook and other social networking sites. The BBC already made a claim back in February that Facebook users sticking to the default settings may be targeted by fraudsters and expose their personal details to misuse.

The scare relating to malicious applications is a real one, given that most of these programs access the user's personal details stored on their profile whether this is required or not by the game, joke or other type of application.

An expert interviewed by the BBC stated that Facebook needed to tighten up its security to prevent members from being exposed to identity theft.

Facebook responded that it 'has an entire Investigations Team that watches the site and removes content and third-party applications that violate Facebook's Terms of Use. Facebook users also police the site and use the "report" button if they come across violators of our Terms of Use'.

Will this mixture of self-patrolling and In-house investigation be sufficient to stem the flow of privacy issues facing Facebook and other communities in the light of an ever more open Web and Mobile 2.0 ecosystem?

Tuenti -The Spanish Facebook growth story

Madrid-based Tuenti is making waves in the Spanish-speaking social networking space. Billed as the 'Hispanic Facebook', it has managed to register the biggest Spanish-based web community despite still only having a beta-version available of its platform.

The company is playing coy with the figures, but suggests that it already has exceeded Facebook's 380,000 Spanish members.Co-founder Zaryn Dentzel states that Tuenti emphasizes the privacy element of its members above any aggressive growth target...yet, the company has proved extremely capable at expanding its membership. It now serves over 70 million page views every day and the company is already experimenting with advertising.

Tuenti states that even though they will rely on advertising for their revenue, that 'it will not look like normal advertising' but instead will be intergrated within the normal user experience on the website.

The company is now planning to roll-out a mobile version of their website and has recruited a Swede to handle this task and who will join Tuenti's other 18 employees. Possibly the biggest coup (as yet not officially announced) is that Bernardo Hernandez, Marketing Director at Google Spain, will be taking a 1 year sabbatical in order to take over business development at the ambitious start-up. He will join Rupert Van Millinguen, another former Googler, already installed at the company.

Interesting developments lie ahead, particularly as the company builds its mapping capability and rolls out Location Based Services...

Shozu -One to Watch #10

London-based Shozu has reason to be pleased with itself. Last year, it scooped a GSMA award for 'Most Innovative Mobile Application' and has since been somewhat of a benchmark when it comes to sharing and uploading content from mobile to web as well as share content purely with other mobile users.

Shozu also recently raised $12m in new venture financing (Series C funding) and is supporting the growth in partners and integrations with other social networking or multimedia sharing sites. The list of partner sites is long, from Picasa to Flickr, from YouTube to Seesmic and from Facebook to Blogger.

They also recently announced that they had struck up a deal with 3 for its one-click mobile-to-Web image uploading service for mobile phones to be amongst a handful of applications featured on 3neXt, a new mobile applications community website from mobile operator 3. The site is designed to aid consumers in finding innovative mobile lifestyle applications that fit 3's focus on mobilising the Internet, as reflected in 3's X-Series phones introduced last year.

ShoZu currently supports 250 Symbian, Java, Microsoft Windows Mobile-based and BREW devices available from multiple manufacturers. The ShoZu service can also be used with select WiFi-enabled mobile phones such as the Nokia N80 in Europe and Dash in the U.S., permitting multimedia files to be routed over users' home, office or WiFi connection (or AirPort connection for Mac users) rather than the cellular network to reduce data transport costs.

I'm looking forward to listening to and exchanging views on Shozu's future plans with its CEO, Mark Bole, who will be presenting next week at the Mobile Internet Conference in Berlin. I will, of course, keep readers posted on salient points of the presentation.

AOL acquires Bebo & How to value an Online Social Network

I am deep in the throes of analysing the online social network 'market' for a presentation I am preparing and stumbled across the recent news of Bebo's acquisition AOL for no less than $850m and thought wow!That is a lot of cash!

Bebo was set up in 2006 and now has (only) 100 employees. It achieved significant success early on, when it offered a free trial for 7 weeks in 2006 and obtained 40,000 user sign-ups.It later changed its business model, dropping member fees for a more 'traditional' advertising supported medium.

Having to hand the numbers for the last big acquisition in the sector, that of MySpace by NewsCorp in 2005 for $580m I could do a quick calculation. Given that back then, MySpace had 25 million members, NewsCorp paid $23 for each user.


Fast forward to 2008, and the value of online social networks is clearly on the rise. Bebo has an estimated 22 million visitors (I will assume this means members), so AOL paid a neat $38 for each one, a whopping 65% more than the amount paid for the MySpace members.

As far as I can work out from public information, rival Facebook has about 60 million subscribers (4m of these users of the mobile Facebook site) and in 2007 generated $100m in advertising revenue i.e just under $2 per member per year. At these levels, AOL will require around 20 years to breakeven on its acquisition in terms of ad revenue alone (ok, a simplistic calculation, but a revealing one nonetheless).

One could argue that AOL probably has plans to integrate Bebo with its other business(es) and cross-sell media etc. but based on the social network alone, either AOL knows something we don't in terms of how much advertising can be pumped through the pipes of a social network or they have some cunning plan to create new value from it by some (yet unknown) proposition.

Needless to say, eyes will be peeled for any developments just as much as they will be on the last remaining independent players in the online social network space, like Friendster and Tagged (with claims to 60m and 30m subscribers each).... a whiff of consolidation in the sector is definitely in the air..question is, how much will the next brave acquisition cost and will the premium keep on rising despite a probable plateauing of subscriber numbers across the board...?

Location, Location, Location - the Ulocate Widget Platform, One to Watch #6

Eric Schmidt, CEO of Google, is excited about the future of Location-Based Services (LSB): "...location-based advertising will be a very good business and useful to the end user".

This was his comment at a panel discussion held at the WEF in Davos last week (see Andrew Grill's blog for his excellent post analysing the key messages of the session). Many share Schmidt's excitement about the prospects for LBS's, albeit few are clear as to exactly how and when these prospects will materialise.

One firm that could be positioned to benefit from growth in this area is Boston-based uLocate, owner of the 'Where' GPS widget platform, capable of automatically porting programs onto GPS-capable handsets and publishing them on US-based networks with access to millions of users.

uLocate is hoping for location-based widgets developed on their platform to experience the same kind of viral growth that Facebook experienced for some of its applications.Already a number of practical widgets have emerged, ranging from the 'Zipcar Car Sharing' widget allowing members to locate and view the nearest Zipcars on their mobile screen as well as instantly connect to Zipcar's reservation system to select a nearby vehicle, to the 'Nearbio' widget, enabling users to quickly find the closest biodiesel pumps.

In addition, uLocate also offers "BuddyBeacon", a geo-social networking service that is reminiscent of Plazes (but however lacks the geo-tracker functionality of Ipoki, for example).

If uLocate's platform takes off within the developer community, then we could see the company expanding outside of the US and take advantage of the popularity of its platform to access an ever-growing LBS market.Its partnership with Twitter to track users' whereabouts could also fuel growth for the company.And for a subscription fee of $3 a month, uLocate appears to be delivering value to its US-based end-users.

It already raised $11m im venture capital in May 2007 in an over-subscribed financing round, so access to funding could further power its dash to grab global market share in 2008.

Ipoki -one to watch #4

Ipoki, founded in Spain in 2006, believes users should have control over their location information and who can see it.

It is a GPS-based social network that uses Google Maps and Google Earth to track and locate friends and family.The system also allows you to record geolocated alerts and receive them in mobile terminals. It works via an Open Source plug-in compatible with a wide range of handsets. Mobile users without inbuilt GPS have the option of linking up via Bluetooth to their GPS terminal.

Ipoki is gaining fame for its 'Follow Me' killer ap, allowing users movements to be tracked or followed in real time.This allowed the company to win the Mashup of the Month Award last summer.The Ipoki widget is now also available on netvibes and igoogle with a future release planned for Facebook.

At the same time as a new improved beta version of the software is released, Ipoki is on the lookout for seed capital to finance its further expansion. Within one year of setting up, Ipoki had already received 100,000 visits and 20,000 downloads of its software. With their 'open' philosophy and global reach, this ambitious start-up has big plans for the future. I'll be covering their progress in the coming months -in the meantime, why not try their new release and feedback on your impressions?

POST-SCRIPT: I asked Andres (one of the Ipoki founders who was browsing my post earlier and whom I'd met at a Mobile Monday event) if he had a scoop for my blog readers. He announced that they were beta testing a new nifty feature for their plugin -a photo geotracker using Flickr. The idea is that as Ipoki tracks the user's position (at a point in time) it can also pinpoint photo locations by synchronising with the camera's clock and ta-dah! You have your photos automatically geo-tagged!

I also asked Andres how Ipoki's service differed to that of Plazes -he said that Ipoki is a true LBS, tracking people's position via GPS while you need to tell Plazes where you are all the time. This raises the question -if and when Plazes will shift to using GPS to automate its tracking process...

Seesmic -one to watch #2

Loic Le Meur is no stranger to web enterprise -San Francisco-based Seesmic is the fifth such start-up he has embarked upon. Only that this time, there is a special touch, in that in a one-of-a-kind initiative, he is keeping a daily video diary of how the whole adventure unfolds.

So what is Seesmic? Loic describes it a community-driven video social software. Others have billed it a video-based twitter. The basic idea is for it to become a very open online video service with a high degree of interaction by part of its users. The company has not actually officially launched (this is expected to happen in February 2008 -aha, the month of the Mobile World Congress!) so only testers can access the beta version.

However, development of the site has achieved a crescendo of activity and it promises to deliver integrated social networking by linking in to facebook, skype, twitter et al. Channels will be created according to specific themes, like technology, hobbies, sports etc.

But what is the business model, I hear you asking? A high degree of user partcipation and critical mass within the channels is intended to act as a strong pull for sponsors and advertisers. Seesmic members posting some of the more popular videos to these channels will in turn receive a percentage of revenues from them.

Loic has a large following in Europe and is somewhat of a web evangelist, allowing word to spread fast about the seesmic initiative.5,000 testers are already helping Loic make his vision a reality and giving a welcome 'open' flavour to the whole project -in today's community-bound web, a sure-fire key to success.Loic has strong support from Niklas Zennstrom of skype fame- "Seesmic rocks -it is Web 3.0".

I will ask Loic what his plans are for seesmic on the mobile web and keep readers updated.Meantime, take a look at Loic's seesmic video-diary -you'll find it to be dangerously addictive!

m.dot vs dot.mobi

The battle between m.dot and dot.mobi is heating up. I have had close contact with the dot.mobi consortium recently and witnessed their efforts to push their domain as the 'gold standard'.

I am noticing 2 things: there seems to be a decoupling of usage between Europe and the US, with the big guns (Yahoo, Facebook etc.) adopting the m. domain and the European operators (Orange etc.) opting instead for dot.mobi.

Also, dot.mobi is struggling to communicate its added value, namely that it has defined (and offers as a framework) a set of development standards to improve the user experience of web on mobile.

At the same time as a gold rush is taking place to acquire the popular dot.mobi sites (witness the many online auctions), the key issue of enhancing the user experience of web on mobile is taking a back seat. Pity, as dot.mobi would have gone a long way in widening the appeal and useability of mobile web.