More Fuzzy Social Network Math

Big numbers are floating around the social network scene again, as Jordan Rohan, an RBC capital analyst, says, after a meeting with Fox interactive, that MySpace could be worth 15 billion, measured in terms of the value created for shareholders of parent company News Corp. Huh?

Rohan based his view on an extrapolation of estimates for the value of Internet properties ranging from $1 billion for both MySpace rivals YouTube and Facebook to the market capitalization of $120 billion for Google Inc. (GOOG.O: Quote, Profile, Research).

He said MySpace was currently sold out of space for video advertising. The CPM, or price per thousand ad views, on a premium show such as Fox’s The Simpsons runs as high as $35-40 on MySpace, he said.

Wow, talk about fuzzy logic, those numbers he’s throwing around are the same kind of numbers, fuzzy. This report doesn’t mean anything, and it probably just some guy trying to pump up his profile, or News corp trying to push up share prices, or both. Pete Cashmore from Mashable says,

So how did Rohan arrive at the figure? Apparently he looked at the rumored $1 billion Yahoo-Facebook talks (no purchase yet) and the $1.5 billion valuation for YouTube (this number is also baseless), then extrapolated. He also factored in Google’s $120 billion market cap, and looked at how MySpace could monetize its audience - direct response marketing, ecommerce and high-price advertising. Whether or not the prediction turns out to be true, most people would agree that this kind of comparative math is fuzzy at best, and a stab in the dark at worst - nobody is buying YouTube for $1.5 billion, for instance. Whether the aim is to bump up News Corp’s stock price or get more attention for RBC, I’m not sure, but it seems these valuations amount to little more than guesswork.

Once someone actually pays that much for one, I will believe it.

Posted by Jimmy Daniels Posted in: Facebook, MySpace, Social Networks No Comments » September 2006

Big Social Network Advertising Deals

Social networks continue to do ad deals to try to make some of the money that everyone seems to think they are worth. Google and MySpace just did a close to billion dollar deal and now Facebook and MSN are inking a deal that will put banners and text links on Facebook pages. Of course the Google and MySpace deal put’s actual money in the pocket or Rupert Murdock while Google could be doing the deal just to get more exposure to and more people using their search engine. Here is the press release from Microsoft.

Microsoft Corp. has struck a deal to provide advertising for social networking site Facebook, in one of the first high-profile agreements for the software maker’s online advertising platform.

Under the deal announced late Tuesday, Microsoft will sell and provide banner ads and sponsored links for Facebook using the adCenter online advertising platform and other in-house technology and services.

Financial terms of the deal were not disclosed. It is expected to run through mid-2009. Source: Yahoo.

I am assuming Microsoft is planning on loosing money as well, as everyone that I know who has advertised on MySpace has lost money, and there is no reason to think the Facebook site will be any different, people aren’t there to shop, they are there because their friends are there. Plus, you know some advertisers will be reluctant to advertise knowing there could be some edgy content next to their ad, especially with stories such as this one involving a banner ad infecting a million computers, Banner Ad on MySpace Infects Over 1 Million Computers and this one involving the adware programs from Zango being pimped on MySpace users, Would you kindly shut your noise-hole?.

Techcrunch says this is notable news because Google wasn’t involved,

This news is most notable because the partner that Facebook chose isn’t Google.

Google is generally thought to generate more revenue per page than either Yahoo or Microsoft due to their method of choosing which ads go on top. While Yahoo places the highest bidding ad on top, Google also takes into account the click through rate on individual ads in deciding which go on top. This seemingly simple feature increases revenue substantially, and along with Google’s superior search product is the single biggest factor in Google’s financial success to date. Yahoo, it is worth noting, is developing a similar system, called Panama, which is rumored to be launching later this year.

I really don’t think targeting will matter as much for the same reasons, people aren’t looking to buy something, unless they landed on a page while searching for something from a search engine or another site, and while the page views on these sites are unreal, click thru’s on ads aren’t very good, so, no matter how you slice it, ROI will always be low to non-existent, and that means the ad spots will be worth less and less as time goes on and advertisers spend less money. But, the thing this deal has over the MySpace deal, Facebook has 10 million college age members, while MySpace has 100 million high school age members, these college kids will have more money and more need for “stuff” if they are on their own, so, this might be a better deal for Microsoft.

Microsoft could also be thinking of using this as a test bed in that they can develop new targeting methods for these users which they could use elsewhere. Definitely an interesting deal, just wish we could see the financials involved.

Earlier this month, Google struck a deal with News Corp.’s MySpace.com, the top social-networking site, to pay at least $900 million in shared advertising revenue and become the online hangout’s exclusive search provider. Under the multiyear deal, Fox Interactive Media will add Google search boxes to MySpace and other sites. Google also get first rights to sell any display ads Fox doesn’t sell directly.

About Facebook: Founded in February 2004 by Mark Zuckerberg, Facebook helps people better understand the world around them by developing technologies that facilitate the spread of information through social networks. The site has over 9 million registered users in over 40,000 geographic, work-related, collegiate, and high school networks, and according to ComScore’s MediaMetrix report, Facebook ranks as the seventh-most trafficked site in the United States. Facebook is privately held and headquartered in Palo Alto, Calif.

YouTube also just announced a big deal Tuesday involving branded commercial channels, with Paris Hilton being the first, using this to promote her new album. It’s Hot. (Note: This is a joke, her big saying, I think she’s a skank, but she’s one hell of a promoter.) This is from Techcrunch,

YouTube will unveil a number of custom branded commercial channels tomorrow in its latest move to monetize the site. The bizarre cultural icon Paris Hilton is already highlighted on the front page of the site with her own YouTube channel, to correspond with the release of her debut musical album on Tuesday. Fox has paid an undisclosed sum to advertise its TV show Prison Break on the YouTube channel of Hilton, whose album is produced by Warner Brothers. YouTube reportedly pays more than $1 million each month in bandwidth costs and some people have been concerned that it would be a challenge to turn its huge traffic into money. Thus Paris Hilton to the rescue.

Well, I think this will have the same problems as the other deals, unless they can make the same kind of videos as the ones offered on YouTube, i.e. containing half naked chicks and stupid stunts or jokes. I still think the best way for them to monetize YouTube would be to insert video ads in front of each video, that way everyone has to see it, or at least play it.

Posted by Jimmy Daniels Posted in: Facebook, Google, Linking Strategies, MSN, MySpace, Online Marketing, Social Networks, Web 2.0 1 Comment » August 2006

How to Keep Your Kids Safe Online

Talk to them. It’s that simple, tell them there are bad people in the world who are looking to take advantage of them, tell them you can’t really be 100% safe unless they are at home, let them know they have to watch out for themselves and their friends. Talk to them. Why do I post this now? After reading the umpteenth story on someone being raped after they met someone on MySpace, that’s why.

Girl Accuses MySpace Acquaintances Of Rape Three Teens Formally Charged, One Still Being Sought.

At least three assailants, including a current and former Senn High School student, raped a 14-year-old girl they met through the MySpace.com Web site, then left her passed out in an alley, prosecutors said Monday.

It’s not just MySpace, anywhere they go online and they interact with people, they can get into trouble if they don’t know what to do. Girls, never put yourself in a similar situation, this girl went to one of their houses and drank a lot and passed out. Big mistake. Of course, this doesn’t give anyone the right to take advantage of her, but the big mistake was being there with people she didn’t know to start with.

Talk to your kids, you won’t regret it.

If you need extra protection, install Teen Minder on their computer and you’ll be able to see everything they do online. Talk about making you feel a little safer, if you could play a video of what happened on their computer, wouldn’t that make you feel better? Try it now, it’s some of the best child monitoring software around.

Added: Just spell checked this and realized that the article from the NBC site misspelled acquaintances, it was spelled with an e acquaintences instead of an a acquaintances.

Posted by Jimmy Daniels Posted in: Attacks, Mistakes, MySpace, Social Networks No Comments » August 2006

Interview with MySpace Zango Pusher Mark Arruda

You just never know what you are going to read when you go to Paperghost’s site, VitalSecurity.org, and today was no exception. He found a newspaper interview about this enterprising young webmaster that makes “big bucks” designing web sites. And apparently, this is the same individual who has been pushing Zango on MySpace users with their “video content”.

From the interview,

Just 10 short months ago, the 21-year-old Fairhaven resident was working at a pizza place and taking classes at Bristol Community College. He didn’t even have enough money to buy gas.

Mark’s newfound wealth comes from raking in big money making Web sites to enhance MySpace Web pages.

Sound familiar? Making web sites to enhance MySpace pages. It only says Mark earns income from advertising hits on his sites. And they specifically mention Yahoo, but nothing else.

From PG’s site,

Effectively, we have an open admission from the webmaster of these sites that the people most likely to install the Zango videos on their Myspace profiles and / or run them are under the age of eighteen, on the basis that if that’s the main age of his visitors, it stands to reason that a higher proportion of that age range would also interact with the Zango content.

Not only that, but despite the main age range of his user base being between 13 and 18, he is apparently not paying any attention to the Zango Terms and Conditions either and knowingly presenting his young users with Adware that requires you to be over the age of 18 to install it in the first place.

I don’t know how much more rope this guy needs to hang himself with here, but he’s doing a pretty good job of it. The question is, in light of this latest “revelation”, will Zango do anything about it?

I don’t think anything will be done by Zango, he will have to be shamed into stopping I’m sure, if that could even work.

I posted an entry in their forums to ask them if they would do a follow up to see exactly how he made his money, but the forum is heavily moderated and the post will probably not see the light of day. So, apparently the SouthCoastToday is not really a news site, otherwise they would be interested if one of their own was helping infect thousands of computers with adware.

Posted by Jimmy Daniels Posted in: MySpace, Social Networks, Spyware, Zango No Comments » August 2006

Deleting Online Predators Act (DOPA) Passes the House

US House Resolution 5319, the Deleting Online Predators Act (DOPA), was passed by a 410 to 15 vote tonight. If the Resolution becomes law social networking sites and chat rooms must be blocked by schools and libraries on those institutions computers or the will loose their federal internet subsidies. And with a margin as big as that one, one would think it would pass the Senate easily as well.

So, if it passes, what does this mean? Will it be applied to blogs like this one, where you create a login and can describe yourself? Or will they apply it loosely and just block the big sites?

From Techcrunch,

An incredibly vague law, DOPA will require schools and libraries to block access to a potentially huge range of sites on the internet. The goal is to protect children from adult predators. Sites that must be blocked include those that allow people to post profiles, include personal information and allow “communication among users.”

Which would include all blogs, all chat rooms, news sites like News.com, shopping sites like Amazon, all the social sites, not just MySpace, but sites like Digg, Slashdot, Reddit, Facebook, but most of the talk has been about sites like MySpace. So, it makes you wonder, do they REALLY know what they are doing? If you’ve read any of my other posts, like the one from Senator Ted Stevens who is Senate President Pro Tempore, and is also Chairman of the Senate Committee on Commerce, Science, and Transportation, then you know how little some of these people know, and these are the people that are deciding the internet’s future right now, and this during an election year.

From Declan McCullagh at Zdnet,

Fitzpatrick’s re-election campaign is one reason why the Republican leadership, which is worried about retaining their slender House majority, arranged a vote on DOPA. Fitzpatrick, who represents a politically moderate district outside of Philadelphia, has found himself in a tight race against challenger Patrick Murphy, an Iraq War veteran and prosecutor.

Technology lobbying groups, which were taken by surprise by this week’s speedy approval of DOPA in the House, are now scrambling to throw up roadblocks to the measure in the Senate. Some expect that the Senate leadership will hold a vote as early as next week. (Libraries also oppose the measure.)

So the time is short for this one. I would say this one will end up in court, as one commenter on the Techcrunch site said,

U.S. Constitution: First Amendment
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Social Networking site are just peaceful assemblies. This is against our right to free speech.

Just one argument, and a good one, if you can get them to see that it is an assembly, even if it is one person on a computer at a time.

Posted by Jimmy Daniels Posted in: Blogging, Digg, MySpace, Online Predators, Politics, Security, Social Networks, Technology 2 Comments » July 2006

Myspace Down Because of Power Outage

Not that I would’ve noticed it, and I didn’t hear my boy complaining about it, so it must not have been that bad, but apparently Myspace was down quite a bit yesterday due to a power outage, according to mashable.com. It started at 6:40pm came back up for a bit and was unreliable and then went back down. Site appears to be working fine this morning. I’ll file this under, Yawn.

Added: News.com just posted an article about it, so you know it must be attracting some traffic or they wouldn’t even fool with it,

A record-breaking heat wave that crippled power systems throughout California shut down MySpace.com for nearly 12 hours, starting Sunday night.

The popular social-networking site, which recently topped Yahoo Mail as the most-visited Web site in the United States, was disabled entirely as of 6:40 p.m. Pacific time Sunday.

The home page was replaced by a placeholder with a message from MySpace founder Tom Anderson, who said that the site was dealing with a power outage in its data center. He cited the time as 6:40 p.m. Pacific and estimated that MySpace would “hopefully” be back up within the hour. “Wanna place a bet?” Anderson quipped in the note.

Posted by Jimmy Daniels Posted in: MySpace, Social Networks No Comments » July 2006

Banner Ad on Myspace Infects Over 1 Million Computers

In an article from The Washington Post, an ad for DeckOutYourDeck.com was using the Windows Metafile flaw to load a Trojan horse program that loaded crap from the PurityScan/ClickSpring family of adware. The users pc would then be bombarded with popups and their internet usage would be tracked, and, unfortunately, at least half of the available antivirus programs flagged this software as bad.

Using software that captures and analyzes Web traffic, La Pilla found that the installation program contacted a Russian-language Web server in Turkey that tracks how many times the program was installed, presumably because most of this adware is installed by third parties who get paid for each installation. The data there indicate that the adware was installed on 1.07 million computers, La Pilla said, adding that all seven of the Internet addresses contacted by the downloader Trojan appear to be inactive at this time.

La Pilla said he also spotted the ad trying to serve up adware on Webshots.com, a popular photo-sharing site. It’s not clear when this particular campaign started, he said, but an anonymous user at the invaluable CastleCops security forum posted information about a similar attack spotted on MySpace on July 12. Users at this online gaming forum apparently spotted the same WMF exploit being served via the DeckOutYourDeck ad as early as July 8.

So, it appears there are lots of users who haven’t patched their machines in awhile, since Microsoft made patches available in January. Most of these users are MySpace users, probably, and if they are like my kids, I make them use their own computers, so they probably don’t get patched and they get ate up with spyware/adware. Occasionally, after much complaining from my boy, I will re-image his machine and I will lecture him on how he is supposed to use the internet, which goes in one ear and out the other and he does it again. So far, learning the hard way is not helping him any, so maybe I need to come up with a new approach.

Posted by Jimmy Daniels Posted in: MySpace, Security, Social Networks, Spyware 1 Comment » July 2006

Would you kindly shut your noise-hole?

The spin coming from Zango is amazing as always. Note: Chris, I like peanut butter cookies.

In an article from InformationWeek, Zango representatives responded to the Paperghost’s blog about Zango and Myspace, called Teenagers used to push Zango on Myspace?, here are a few quotes and spin from the house of cards that adware built.

Then Zango’s vice president of business development, York Baur, said that “we’ve fixed [those] problems to the extent they can be fixed. This [business] model works, and we’re very proud of the model we’ve built.”

Stan Monlux, senior director of business development, weighed in Monday on the MySpace issue by denying that the network’s accounts were allowed to register as partners — and thus receive payments — and arguing that it wasn’t up to Zango to police the sharing of its content.

“We get applications from MySpace account holders all the time,” said Monlux, “but MySpace has a policy of not allowing any third-party advertising. Partners need to own a top-level domain, as well, and obviously MySpace profiles don’t meet that requirement. Those two rules basically say that we’re not going to be contracting with anyone on MySpace.”

But, Monlux went on, Zango’s “invested significant financial resources creating content for people to share. We certainly don’t discourage sharing it.”

Of course they don’t, that’s there out, we don’t pay affiliates to push Zango on Myspace, but if a user grabs a video, we will pay the affiliate for it. How convenient. This effectively says push our videos, but make sure the users spread it for you, and what better way than to push these videos of amazing and funny stuff that looks great on a Myspace users webpage, stuff that their friends will want, and their friends, etc, etc.

Boyd’s contention was that unscrupulous Zango partners are getting MySpace users — many of whom are teenagers — to do their dirty work by spreading the necessary ad-tracking and ad-displaying software.

“Pasting the code for the [video] into the MySpace profile and having it auto play when you visit the page is enough to have the [Zango] license prompt appear,” said Boyd. “Easy as pie.”

But although a Zango EULA (end-users license agreement) pops up on coded MySpace profiles, it’s too easy for users to assume the dialog’s from MySpace, not an adware vendor, argued Boyd. He found more than two dozen sites similar to Myspace Graphics and “I didn’t see one actually mention the fact that in return for these [video clips], you’d be pimping Zango.”

That’s part of the secret sauce, they work on users assumptions, like those popups are coming from Myspace, or those EULA for those “great” videos, for all of their bluster about reading EULA’s, about helping sites make money, it all comes down to trickery and deceit. Every time someone installs one of their programs it’s because they accept the EULA just to get something for nothing, or so they think, or because they think it’s a license to use the video or just because they don’t know any better. I still challenge Zango to send me some email addresses of people I can contact who actually like their software, hell, just one will be fine with me.

“We know where Boyd and other like him stand, and they know where we stand,” Stratz said.

Ya, we stand for truth, justice and the American way, we don’t like being tricked, we don’t like seeing others tricked, especially kids, and we don’t like you and your spin, so as Bender says, “Would you kindly shut your noise-hole?”

And now, back at the Hall of Justice…

Added: Looks like the Paperghost wins again, the Myspace profiles have been removed and the guy who was “pimping” the Zango videos on Myspace has stopped. Wonder how they got him stopped so fast? Employee, maybe.

Posted by Jimmy Daniels Posted in: MySpace, Social Networks, Spyware, Zango 1 Comment » July 2006