Slide was not too happy when Facebook temporarily pulled one of its most popular applications, Top Friends, from the social networking site for exposing too much profile information to people who were not friends.
Ahead of today’s F8 developer conference, I asked Slide CEO Max Levchin what Facebook could do to make developers’ lives easier. Not surprisingly, he’d like to see clearer rules about what is and is not allowed, as well as more formal, contractual partnerships between Facebook and app developers. (Facebook is expected to announce a tiered partner system today, and Slide may not qualify as one of the “preferred” partners because of the issues that led to Facebook’s police action).
Slide’s VP of Strategy, Keith Rabois, goes even further. He warns that if Facebook keeps shifting the foundation on top of which app companies are built it will threaten their viability. This might all sound like sour grapes, but coming from the biggest provider of apps on Facebook it does carry some weight.
Levchin, who was one the co-foudners of PayPal, also thinks that Facebook needs a universal payment system so that developers can start charging for apps like they can on the iPhone. The question is whether anyone would ever want to pay for a Facebook app.
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Facebook is continuing its war on Facebook apps that push the limits on acceptable user interaction. Last week it was Slide’s Top Friends App, which it briefly suspended. Later Facebook also suspended another popular app, Social Me.
This time they’re targeting Slide’s rival RockYou and their Super Wall application, which tends to have a lot of spammy user content. But instead of shutting down the application wholesale, they’ve simply turned off the viral components of the app - invitations, notifications, etc.
The consequences have been just as dramatic. A month ago Super Wall had 2.4 million average daily users. Today it’s 600,000 and falling fast.
RockYou CEO Lance Tokuda confirmed that Facebook had shut down features of Super Wall, but says they’re working with Facebook to fix the issues and expect things to return to normal soon.
One thing is clear in all this: Facebook is serious about slapping down app developers who go too far in their efforts to grab new users.
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Slide and Vh1 excel at making products geared towards America’s lowest common denominator. The first makes SuperPoke, a popular social network app that lets you send text messages saying you’ve done “stuff” to your friends. The latter produces reality show classics like “Flavor of Love”, “Rock of Love”, and “I Love New York”. And next week, their powers will combine to bring you VH1’s SuperPoke!Fest: a four day reality show marathon to promote a new show called “I Love Money” that will give users a chance to see their very own SuperPokes live, onscreen!
Beginning July 2, Facebook and MySpace users will be given a choice of 30 Vh1-branded SuperPoke actions that will let users “get romantical with” and “slip the tongue to” their friends. Each of these special Vh1 SuperPokes will be entered into a lottery, and the luckiest 10,000 users will get to see their poke displayed for a few seconds on TV.

I’m sure this sounded like a great idea during a marketing meeting, but did anyone ever pause long enough to realize that SuperPokes can be annoying, even when you know the people involved? I don’t care if OLIVER B has slipped the tongue to some girl I’ll never meet. And why is VH1 taking up about 40% of the screen to display these things?
The event is also likely to flood Facebook and MySpace with spammy messages from Slide as users vie to get their first names displayed on television. Slide probably won’t mind so long as it can maximize the number of users it reaches, but the rest of us may have to deal with a new onslaught of SuperPokes.
According to Slide, we’ve got even more of these promotions to come - let’s hope they take a different approach:
“This partnership, the first of many to come, offers our enthusiastic users the chance to become SuperPoke! stars on the television network they already know and love. Now, SuperPoke! is not only fun and social, but it might get you on TV too.”
Slide has recently been in the news for having their popular Top Friends application disabled by Facebook. The application apparently has a security hole that allows Facebook users to view portions of any Top Friend user’s profile - something that is clearly in violation of Facebook’s privacy policy.
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Back in January Slide pulled off a whopper of a financing for an effectively pre-revenue startup: $50 million, valuing the company at a cool half billion dollars. Not bad.
No one was surprised to hear that arch-rival RockYou would soon close a big round of their own. And we have not been dissapointed. Today RockYou is announcing a $35 million Series C round, led by DCM. Previous investors include Sequoia Capital, Lightspeed Ventures, and First Round Capital—none of which are mentioned as participating in the current round. The company had raised just $16.5 million over two previous rounds, bringing their total to $51.5 million.
RockYou is the second-most popular creator of applications on Facebook (after Slide), and says that its widgets are seen by 87.5 million people a month across the Web (compared to Slide’s 63.7 million). The company also offers OpenSocial applications that have been installed 10 million times. RockYou sells social-networking ads against the audience for its widgets. At 2.7 billion pageviews a month, that’s a lot of advertising inventory.
Now it just has to figure out how to get more people to click on them.
The stress between these two similar startups to compete is brutal. Sarah Lacy explained in her book how when either company would release a new feature or application, the other would race to duplicate it within hours:
This has all been building to a nasty war between Slide and RockYou, with each maintaining it is larger, each ripping off the other’s products. Having an enemy has helped focus Slide, and for now, it beats RockYou on every count.
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Slide is a peculiar Web 2.0 company. Perhaps the most interesting thing about it is founder Max Levchin, who co-founded PayPal and has been profiled as a workaholic by the New York Times.
Its operations themselves aren’t terribly fascinating: they consist of cranking out fun, but trivial, widgets and social network applications for the likes of Facebook and MySpace.
But whether its products appeal to the digerati or not, it sure does appear to have a knack at making money off social networking when the social networks themselves are struggling to monetize effectively. How else can anyone justify the startup’s huge valuation?
Slide makes all of its money from brand advertising, primarily through its Facebook applications (although Levchin has indicated an interest in direct-to-consumer sales as well). To bolster sales efforts, it has decided to open a second office in New York City, where it believes 70% of all brand dollars originate. Unlike its San Francisco headquarters, which houses 80 employees (mostly developers), the New York office will consist of a sales team led by Jason Bitensky, a former national sales director for AOL.
I took the opening as an opportunity to ask Keith Rabois, VP of Business Development, some questions about how Slide monetizes its applications. Rabois explained that Slide mainly targets Fortune 50 companies and sells ad space almost exclusively on a CPM basis (no performance-based advertising or CPIs).
Advertisers on Slide roughly break down into three segments: entertainment, consumer packaged goods, and mobile. The entertainment segment consists of all the major movie studios, packaged good companies include big corporations like ConAgra, and mobile advertisers come from both the hardware side (Palm) and network side (AT&T).
Their campaigns are spread over three primary Facebook applications: FunWall, SuperPoke, and Top Friends. Each of these has its own advertising characteristics. FunWall runs sponsored videos that enjoy premium CPMs, SuperPoke features sponsored actions (like a whip for the new Indiana Jones movie), and Top Friends overlays videos on top of special network pages.
RockYou is often portrayed as Slide’s archenemy, and from a consumer point of view, it can be hard to tell their products apart. However, Rabois insists that their monetization strategies are substantially different. While RockYou makes its money from CPI and ad network deals, Rabois positions Slide as a competitor to Yahoo, which also tries to get brands in front of eyeballs.
Slide now has a total of 5 sales people. Expect them to bring aboard more as they attempt to further monetize their development efforts.
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Meet Watercooler, a startup developing social network applications for all the usual suspects - Facebook, MySpace, Bebo, Hi5, and Friendster - that allow fans to rally around their favorite sports teams and TV shows.
The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps since July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.
While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.
Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.
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Multiple fake reviews for the Funwall App on Facebook have been deleted after it was discovered that the reviews came from employees of Slide, the apps owner.
Fake reviews seem to be part of the norm these days, however most companies are smart enough to cover their tracks; Slide employees on the other hand post from accounts that are part of the Slide Inc Facebook network.
A couple of samples (via this thread on Facebook)
FIVE STAR RATING
I can’t live without it!
by Sohyen Claire Kim at 2:12pm on January 30th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvwYou can enjoy this super amazing FunWall apps!!!!
Very Strongly Recommended!!!! big_smileFIVE STAR RATING
Fantastic Application!!
by Mayumi Yoshida at 1:44pm on February 1st, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvwI totally love FunWall!! I can put Youtube videos, greeting cards, neat pix and fun postings…it’s super convenient and addictive!!
And I love how I can forward my friends’ fun stuff that they sent me!!Hooray for FunWall!! Seriously, a Wall cannot get any better than this.
FIVE STAR RATING
w00t!
by Adora SlideEleven at 6:41pm on February 16th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvwlove it.
FIVE STAR RATING
luv it!
by Adora SlideEight at 1:15am on February 17th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvw
The Adora Slidexxx names are a particularly classy touch: not only is Slide spamming Facebook with fake reviews, they’re also using fake accounts with fake names and more staggeringly adding the fake accounts to the company only Facebook group (The name Adora comes from Slides Sr. Product Manager Adora Cheung). A full list of the fake accounts on Slide Inc here; there are pages upon pages of fake accounts, which also breach Facebook’s TOS.
MikeP on the same thread sums it up beautifully: “Slide writing fake reviews on their own reviews board is hilarious! is that really the behavior of a company worth $500M?”
Here’s a new theme song for the bright sparks at Slide who thought this was wise:
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Investment banker Michael Montgomery has his chance to prove he’s still relevant in the tech banking world if this VentureBeat story is true. The rumor is that Meebo has hired Montgomery & Co. to represent them in a new fundraising round that may value the company at a cool $250 million.
If they pull it off, they’ll set Meebo’s value at half of the $500 million Slide was recently able to talk the markets into. That Slide deal had Montgomery & Co. competitor Allen & Co. behind the deal.
In fact, Allen & Co. seems to be representing all the hot startups these days. In addition to representing Slide in that massive valuation, they’ve worked with Bebo in their recent sale to AOL and Digg in their ongoing acquisition talks, etc. Montgomery, meanwhile, has been taking on lower profile deals like Technorati’s recent fundraising/sale effort. If Montgomery pulls of this deal, perhaps Silicon Valley startups will stop looking exclusively to Allen & Co. for the big stuff.
Is Meebo worth half a Slide? Well, I’m not sure Slide is worth half a Slide, to be honest. If anything, though, Meebo is a potentially more interesting platform. They have created a syncronous world of chat that works perfectly along side a number of applications. Gaming, for example, is a natural fit with Meebo.
Still, Comscore says Meebo has only 4.6 million unique monthly visitors. That’s valuing each of them at $54. That’s significantly more than AOL paid for each of Bebo’s 22 million Comscore visitors ($39). My guess is the valuation may get taken down a notch or two before the deal’s done. Or perhaps not, if Montgomery does his job and gets a few bidders going after the deal.
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On Monday AOL will announce the acquisition of San Diego-based Goowy, a startup founded in late 2004 and which launched, incidentally, in my living room in late 2006 (we had a TechCrunch party where Goowy, Meebo, Sphere and other startups launched). The size of the deal is not being disclosed.
Their first product was a Flash-based webtop or alternative operating system. But later they went into the widget space with their YourMinis product, and that is the reason AOL has acquired them.
AOL SVP of Social Media, Messaging and Homepages David Liu said this was a deal they’ve been considering for the last nine months, and that they plan to integrate Goowy’s technology into both user-facing AOL products (to widgetize them) as well as their Platform A advertising network. Expect Platform A to launch significant new advertising products in the widget space soon, Liu says.
This is a significant win for Goowy founder and CEO Alex Bard, who has run a tight operation over the years. The company has just six employees and raised a single round of financing from Mark Cuban in April 2006 (the size of that round remains undisclosed, but it was almost certainly under $1 million). He says the Goowy team will remain in San Diego for at least the short term.
Goowy competes with a number of startups in the widget advertising space, including Widgetbox, ClearSpring and Gigya. VideoEgg, Slide and RockYou also compete in this area.
AOL has been busy acquiring promising young startups - they bought Israel-based Yedda last November as well.
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It should come as no surprise that the ad inventory on social networks like Facebook are not worth much. A new offer by Lookery, a startup that places ads on social apps inside Facebook and Bebo, is offering a guaranteed ad rate of 12.5 cents for every thousand impressions (CPM). The promotion, which runs through April is probably close to what Lookery can get for ads it places on Facebook. Add in 2 cents per thousand impressions for serving the ads and you get to about a 15 cent CPM. That is probably a good average for the bulk of inventory on Facebook, which makes up the vast majority of Lookery’s business.
This is a market-share play for Lookery. By offering a guaranteed rate, it hopes to attract enough application publishers to get to a billion impressions a month, up from 170 million in December. Lookery is smaller than the other major social-app ad networks, like Slide, RockYou, and Social Media. On social networks, more so even than on the Web in general, advertising is obviously a volume game. And Lookery is trying to catch up to the larger app ad networks, which may very well have higher average CPM rates, by taking all the low-hanging penny inventory that is out there.
Find out more here.
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Google and Facebook are fighting hard to hire this years crop of computer science graduates, we’ve heard, and ground zero is Stanford. Most of the class of 2008 already have job offers even though graduation is months away.
Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share of graduates. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.
Apparently the popular Facebook Applications class is getting a lot of attention from other startups, too. Slide and RockYou are both recruiting hard. One source says that RockYou is approaching students and telling them they aren’t hiring them, they’re “acquiring” their “companies” and will let them continue to work on their applications after graduation. That is, of course, some serious smoke blowing - any code they’ve been working on in the class is likely to be shelved by RockYou. Still, it’s a great way to recruit by making these students feel like they’re entering into some kind of an M&A transaction.
Something tells me the Pitzer students who’ve enrolled in the Learning From YouTube class aren’t getting the same types of offers.
If you are a CS student at Stanford or another top university, tell us what’s happening with recruiting.
Update: Good comments below from students confirming these (and even higher) salaries.
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Three months ago Slide founder Max Levchin assured us that, despite rumors, he wasn’t raising money, and hadn’t even updated his pitch deck. He sure got his act in gear in a hurry, it seems. Today Business Week and The NY Times are reporting that Slide has raised $50 million at a valuation north of half a billion.
Three months ago when he officially wasn’t pitching a new round, the rumors were that he was looking for at least a $200 million valuation. It sounds like he got the bidding war he was looking for. This was their fourth round of funding.
As often happens in big later stage rounds, the well known Silicon Valley venture firms sat the deal out. Investors in this round include Fidelity Investments and T. Rowe Price.
Business Week’s Sarah Lacy seems a little stuck when justifying the valuation - “But let’s get back to the question of whether Slide is worth $550 million. At this second, the answer has to be no, by any normal valuation math. But if Levchin’s plans succeed, Slide will be worth far more.” What isn’t clear to me is exactly what Levchin’s plan for success entails. Currently they’re a widget company with a ton of users (150 million or so worldwide). They’re transitioning and starting to focus on ad selling. But without more details…
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San Francisco based Founders Fund launched in 2005 with a $50 million venture fund. They’ve had two liquidity events since then, and a handful of other very high profile investments (Facebook, Powerset, Ooma, Quantcast, Slide, Geni, Causes, etc.).
Today they will announce a second fund, Founders Fund II. It’s much larger - $220 million. And unlike the first fund, the money comes mostly from outside investors. The new fund will allow Founders Fund to make 15-20 new investments, including pro-rata investments in follow on rounds.
A couple of investments have been made out of the new fund, they say, but have not yet been disclosed.
Founders Fund partners have deep connections in Silicon Valley, which help with deal flow (Peter Thiel, founder and former CEO of Paypal, Ken Howery, founder and former CFO of PayPal, Luke Nosek, founder and former Vice President of PayPal and Sean Parker, founder and former CEO or President of Napster, Plaxo and Facebook). But they also approach deals differently than most other funds.
Sean Parker said today in a phone interview that a glut in venture capital, combined with reduced capital needs of most startups, has led to a shift in balance of power between entrepreneurs and VCs. Founders Fund recognizes that shift and has evolved does deals a little differently because of it. For example, they invented and promote the issuance of a special class of stock, called Series FF, which allows entrepreneurs to take money off the table much earlier in their company’s lifecycle. They also allow significantly more liberal voting rights to founder board members than many other funds. See this article in the SF Chronicle earlier this year for more on how they do business.
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On Friday, RockYou took over the top spot on Facebook’s list of applications with the most active users. The application, called Super Wall, overtook Slide’s FunWall. Slide still has the No. 2, No. 3, and No. 6 Facebook apps, while RockYou only has one other app in the top ten (X Me, at No. 5). The top apps are still ruled by a few dominant names.
In a press release touting that it is now better than Slide, RockYou also claims to run the biggest ad network on Facebook. But it is unclear how many of these ads are circular links to other apps. There is a lot of funny money on Facebook. Rock on.
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It’s rare that we get two trusted sources who have directly conflicting stories, but it happened today.
On the one hand, rumors have been flying through Silicon Valley saying that widget startup Slide is out pitching for another round of financing, and asking for a $200 million valuation.
The rumors make sense for a few reasons. Slide has 60 employees and is therefore spending $600k or more per month just on salaries - total burn rate may be nearer to $1 million/month. Their size of their last round, which was almost a year ago, was never disclosed. But speculation put it in the $20 million range with a valuation as high as $100 million. So while Slide probably still has some money in the bank, it is about time they’d start looking for new capital so they don’t cut it too close.
And we have a trusted source which says Slide did in fact pitch them for capital recently, asking for at least a $200 million pre-money valuation.
But on the other hand, Slide founder and CEO Max Levchin has gone on the record with us saying they have pitched no one for capital since their last round in 2006. He says they haven’t even updated their pitch deck.
What’s the real story? Perhaps it’s somewhere in the middle. Levchin says people have inquired about investing in the company. “I think this is a misunderstanding,” he said. Certainly he would have no reason to go on the record with us if the rumors were strictly true.
It sounds like it probably is. But those rumors persist, nonetheless. And one thing is certain - they don’t hurt Slide. Anyone thinking of acquiring the company may move sooner rather than later to get their hands on the company before that next round of financing.
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It’s rare that we get two trusted sources who have directly conflicting stories, but it happened today.
On the one hand, rumors have been flying through Silicon Valley saying that widget startup Slide is out pitching for another round of financing, and asking for a $200 million valuation.
The rumors make sense for a few reasons. Slide has 60 employees and is therefore spending $600k or more per month just on salaries - total burn rate may be nearer to $1 million/month. Their size of their last round, which was almost a year ago, was never disclosed. But speculation put it in the $20 million range with a valuation as high as $100 million. So while Slide probably still has some money in the bank, it is about time they’d start looking for new capital so they don’t cut it too close.
And we have a trusted source which says Slide did in fact pitch them for capital recently, asking for at least a $200 million pre-money valuation.
But on the other hand, Slide founder and CEO Max Levchin has gone on the record with us saying they have pitched no one for capital since their last round in 2006. He says they haven’t even updated their pitch deck.
What’s the real story? Perhaps it’s somewhere in the middle. Levchin says people have inquired about investing in the company. “I think this is a misunderstanding,” he said. Certainly he would have no reason to go on the record with us if the rumors were strictly true.
It sounds like it probably is. But those rumors persist, nonetheless. And one thing is certain - they don’t hurt Slide. Anyone thinking of acquiring the company may move sooner rather than later to get their hands on the company before that next round of financing.
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Ever since HotorNot abandoned it’s experiment with going totally free last month, the traffic to its destination site, HotorNot.com, has predictably leveled off. Meanwhile, its application on Facebook is doing pretty well, already accounting for about a third of its daily logins, and 40 percent of it total unique visitors (although the two remain separate services at this point). On Facebook, HotorNot is one of the top 50 apps (No. 45 last time I checked—not a blockbuster app, but respectable), as measured by its 130,461 active daily users (out of nearly 2 million total registered users) on the social network. That compares to millions of casual visitors a month to HotorNot.com itself, where voting is still free and 500,000 people a month login to use its subscription dating service. HotorNot founder James Hong says “the potential of the facebook app for us is on the same order of magnitude as our .com service.”
If ever there was a Website designed as a social application, it is HotorNot. It’s the original voting app, applied to ranking people’s looks. HotorNot took off because it’s simple, voyeuristic, somewhat addictive, and a great time-waster. And for a meaningful percentage of users, it can actually lead to a date (although that feature, which people pay for on HotorNot.com, is not as fully developed yet on Facebook). So with this in mind, I recently asked Hong why it needs to remain a destination site at all. His response:
I have really stopped thinking of HotoNot as a destination site and worry about how many people are using our service no matter where they are. The concept of a destination is so 1999. I think you are going to see a big shift. People will go where they will go. The world is evolving. Sites like HotorNot are starting to see themselves as services and less as destinations.
The same could be said for practically any destination site. The concept of drawing traffic to a central Web destination is blowing up for all but the largest sites. A site today needs to be able to live everywhere on the Web (and not just on Facebook).
But Facebook remains a special case since it is becoming an uber-destination for many different services on the Web. That is why Hong compares Facebook to a mall. If everyone is going to the Facebook mall, then Hong is better off sticking HotorNot in the mall than trying to get people to come to his standalone site. Even if Facebook starts charging rent, Hong is fine with that as long as the rent is reasonable (like any mall landlord, Facebook should know that its stores have to make money too). The same goes for MySpace, which Hong is eager to develop a HotorNot app for once MySpace opens up its platform.
The mall analogy breaks down a bit, though, because the social network landlord could one day create its own HotorNot app and promote that to its members—which would be like a mall owner opening his own clothing store to compete with the Gap, greeting people at the door with flyers as they enter the mall, and charging his store below-market rent. But that’s a risk any Facebook (and, soon, MySpace) developer has to take. Then, of course, there’s the fact that malls tend to lose their foot traffic as soon as a newer one opens up down the road.
Still, why not just ditch the destination site altogether if HotorNot is more powerful as a social-networking application? (On Facebook, for instance, it’s easier to vote on how attractive all your friends are and their friends, rather than be presented with total strangers). It is not hard to imagine one day soon when more people will access HotorNot through Facebook, MySpace, and other social networks than through the site itself. HotorNot should just become a widget company or sell itself to Slide, right? After all, Slide (which Hong happens to be an investor in) is in a better position to serve ads across widgets and Facebook apps since it owns a network of the most popular ones.
It all sounds good, except for a few things. First, HotorNot makes its money from subscriptions, not ads. When Hong tried to make his dating service ad-supported, the spam level became unacceptable. Second, it not yet clear what kind of landlords Facebook or MySpace will become (see above). Third, the question remains whether or not a social-networking app is more useful inside the context of that social network, or if there is power in bridging together different people from different sites. A single app spread across many sites could benefit from greater network effects than many apps that are each stuck in a separate social-networking silo. Right now, the HotorNot Facebook app is built on a separate system than the main site because that was the fastest way to get the app up and running. But that won’t always be the case. Once you cycle through everyone in your social circle, then what?
These are issues that any startup developing a Facebook app must grapple with. In the end, the most successful social-networking apps will find clever ways to both bring in data from similar apps living elsewhere, while at the same time still hooking into the various social networks so that they seem like they were customized just for you and your friends.
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San Francisco based social network widget provider Slide has hit new highs, with reports that they are now serving over one million new widgets daily.
Slide provides widget based photo slideshows that users can embed in a range of social networking sites including MySpace, Facebook, Bebo and Friendster.
Slide has impeccable backing, being founded by PayPal co-founder Max Levchin and funded by Mayfield Fund, Khosla Ventures, BlueRun Ventures and Founders Fund with a rumored round of $20million in November 2006.
Slide’s Facebook apps alone have a combined usage number in excess of 10 million users. comScore reports that Slide was serving 117 million unique visitors a month as of April 2007.
Slide competes directly with services including RockYou, Flektor, and Photobucket.
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Some of the most popular Facebook applications are using highly questionable tactics to spread themselves virally. Users have noticed and complained, and Facebook took action today to put stop the most egregious behavior.
There are two ways application developers are breaking the rules to get new users. The first: When a user looks at an application on his/her profile the application can show something different than when other users view the profile. So a user adds an application that looks nice to them. But everyone else sees, say, a big yellow box with an advertisement that says the user wants you to add this application, too.
The second and more devious scheme is being used by many of the largest application developers. They all involve some sort of notification fraud. Generally, you add an application. Then, every one of your contacts is notified that you’ve “written on their wall” or “have asked them a question,” even though you never did. To view the content the contact must add the application. They then find out there is no wall comment, or its a canned question like “is it ok to kiss on the first date?”
Super Wall (RockYou, 4.5 m installs), My Questions (Slide, 6.9 m installs) and FunWall (Slide, 3.6 m installs) all do this (and users complain loudly in the comments area to the apps - see here and scroll down).
Facebook Hits Back
Facebook took measures today to stop these kinds of activities. The first is dealt with in the new release (1.1) of FBML, the markup language used to build Facebook applications. Developers will no longer be able to show a different profile to friends than the one the user sees him/herself:
One of the key parts of the success of the design of the Facebook profile is that the user is always aware of exactly what their profile looks like to their friends who stop by to view their profile. This enables users to understand exactly how they are expressing themselves to others by simply deciding whether or not they like an application’s profile box and the content that the developer has decided to put into the box.
Right now, we have made a few FBML tags available that are causing users to not trust the content in the profile box. Tags such as: fb:if-user-has-added-app, and other fb-if tags. These tags are currently being used to deliver content to profile boxes which users are unaware of. Content such as big yellow boxes which say “ADD THIS APPLICATION!” or “ADD SOME OTHER APPLICATION!”.
Starting today, these tags will no longer be available for use in profile boxes. We will be migrating FBML to version 1.1, and adding a new set of tags called fb:visible-to-. They are:
fb:visible-to-owner
fb:visible-to-friends
fb:visiible-to-user
fb:visible-to-added-app-users
fb:visible-to-app-users
Facebook also notified developers today that they will be blocked from sending misleading notifications to users. This will stop Slide, RockYou and others from mass spamming users with false notifications:
Over the last few weeks we have noticed several developers misleading our users into clicking on links, adding applications and taking actions. While the majority of developers are doing the right thing and playing by the rules, a few aren’t – and are creating spam as a result. Going forward, if you are deceptively notifying users or tricking them into taking actions that they wouldn’t have otherwise taken, we will start blocking these notifications. The bottom line is that if the notifications you send are the result of a genuine action by a Facebook user and that action is truthfully reported to the recipient so they can make an informed decision, you should have no problems. If you do find some notifications blocked, it was probably because this wasn’t the case and we will be happy to inform you of some best practices by other developers that have prevented this issue.
Facebook has done a great job in managing their platform since opening it up to developers of applications. They have had to accommodate application developers while at the same time protect users interests and the general security of the site. The changes that Facebook have made today, while they may inconvenience some application developers, have clearly been done to protect users from spammy tactics that some applications have employed.
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The news earlier this week that MySpace is acquiring Photobucket for up to $300 million highlights the importance of the widget space in general, and photo/video sharing widgets in particular.
Competitors like Slide and RockYou allow users to create photo slide shows with various effects and transitions, and then embed those slide shows onto MySpace pages and other profiles. These services are growing rapidly. Newcomer Flektor wants to carve out a piece of this market for itself, and we think they have to tools to compete with these more established startups.
Slide
Slide’s most recent financing, rumored to be in the $20 million range, is a reflection of this growth. According to Hitwise, they have grown by more than 2,000% in the last year.
Slide tells us that they are delivering more than 150 million daily slide show views and that more than 200,000 new slides shows are created daily (a press release will be issued later today).
Flektor
The new kid on the slide show block is Flektor. It just recently came out of beta and has few users so far, but we’re hearing they are getting a lot of attention from potential acquirors.
Flektor’s founders, Jason Rubin and Andy Gavin, previously co-founded game developer Naughty Dog (Crash Bandicoot and Jak Daxter), which was acquired by Sony Computer Entertainment in 2000. These guys are experts in creating attractive user interfaces, and Flektor is a generation ahead of Slide and RockYou in ease and flexibility in creating slide shows and related products.
Like Photobucket’s recent offering, Flektor allows users to create slide shows using video, photos, text and effects/transitions, something Slide and RockYou have yet to release (Slide and RockYou also don’t do effects, which are like Photoshop filters - users eat this stuff up). In our testing we also found the Flektor creation wizard to be far easier to use than the current Slide and RockYou offerings. Click on the screen shot for a larger view.
Slide and RockYou have valuations that prohibit speculative acquisitions. Flektor is brand new and doesn’t have the capitalization complications of the older startups. My bet (and rumors around the valley back this up) is they may be acquired in the next six months by one of the social networks, perhaps one of the up and comers looking for as many tools as possible to compete with MySpace.
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Here’s something we dug up while talking to people about the FilmLoop DeadPool post. The the size of the round of financing that Slide announced in November, funded by Mayfield Fund, Khosla Ventures, BlueRun Ventures and Founders Fund was not disclosed by the company. But we’re hearing it was in the $20 million range, with a post money valuation between $60 and $80 million.
That’s a…wonderful…valuation for a company that is pre-revenue, although the company will argue that the adoption of Slide by MySpacers eager to show off their photos to their friends is YouTube-like. Still, that’s a lot of money for a company in deep competition with Photobucket, RockYou, FilmLoop and others.
Slide took a big risk early in 2006 by giving users the ability to auto-insert slide shows into their MySpace pages and blasting bulletins out to all their friends. They did this by asking users to hand over their MySpace credentials, and doing all the hard work for them. This is a clear violation of MySpace’s terms of service, though, and most people, including Slide, expected to receive a cease and desist letter and/or get access turned off. But that never happened, and Slide’s big bet has paid off. So far.
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Tags: photobucket, rockyou, filmloop, techcrunch, venturecapital, web2.0, web_2.0, myspace