With No TWIT or FABOO in Sight, Wall Street Gorges on LNKD
Rivers of drool run down Wall Street every time a plausible rumor about a Twitter or Facebook IPO comes around. It still hasn't happened -- both are still private companies -- but it's been a topic of conversation for years, and it speaks to investors' hunger to pump money into the world's top social networking sites.
This week, investors didn't get a chance to buy shares of FABOO or TWIT, which is what I assume their ticker symbols will be when and if the day comes. Instead, they got to take a crack at those networks' uptight, workaholic cousin, LinkedIn.
LinkedIn's the social network for career builders -- the one you don't worry about your coworkers finding you on; you actually want them to find you there. It's all about professional connections and keeping up with your contacts in the working world.
It made its grand entrance to the public market Thursday and exploded with the biggest initial public offering since Google. Shares started at US$45 and at one point in the day had nearly tripled, topping off at $122.70. They closed at a still very respectable $94.25.
Now the company's value is about $10 billion, and thousands of shareholders are holding its leash. If it doesn't want to become the poster boy of a suspected social network mini-bubble, it's going to have to go into overdrive to pump revenue. The way it's been doing that so far is through an optional subscription system.
But even though LinkedIn is usually classified as a social network, it's different from others like Twitter and Facebook. It's buttoned-down and, for the most part, not all that sticky. It isn't this pipeline of highly addictive digital heroin like the other two; you don't hear much about people compulsively checking their LinkedIn profiles for status updates and the musings of coworkers.
Still, that quiet, businesslike attitude may be a benefit for some users. More playful-minded social networks can get kind of annoying after a while, and the pros on LinkedIn are just too busy working to worry about "Farmville" or the state of your home beer-brewing operation.
Listen to the podcast (12:20 minutes).
Nothing but Net
Netflix has won the Internet. It's now the all-out biggest thing online -- bigger than Google, bigger than Amazon, even bigger than Zombo.com. That's not in terms of revenue, though; it's in terms of the sheer amount of data Netflix is sending down the tubes at any given moment.
According to Sandvine, Netflix is the No. 1 Internet traffic spot, accounting for nearly 30 percent of all peak-period downstream traffic. In fact, the average Netflix subscriber consumes over a gigabyte of data per day.
This isn't due to billions of people constantly tweaking their DVD queues, of course. It's the site's instant, on-demand video, a feature Netflix has been pumping hard lately. They've put Netflix Instant outlets on everything from PlayStations to DVD players to iPads, and they've started offering low-priced, streaming-only packages for customers who don't care about dealing with physical DVDs at all. In certain negotiations with studios, Netflix has even agreed to push back the time frame in which they receive new releases on DVD in exchange for rights to stream more of that studio's other titles.
While Netflix's users are chugging down data faster than ever, Internet service providers are throwing fits. They claim all those movies and TV shows Netflix is streaming are straining their pipes. Providers like Comcast have set hard limits on how much data customers can use in a month, and even though it's probably way more than you need if you're not a total Netflix junkie, a "24" marathon could probably get you there.
In fact, Comcast has told Netflix's distributor, Level 3, that it's going to start charging it additional fees to carry Netflix content. Who knows where those fees could get passed from there -- over to Netflix, perhaps, and from there possibly to customers. Sounds like someone's going to need to put in a call to the FCC, if they haven't already.
Privacy and Otherwise
If there's one thing Facebook stands for, it's consumer privacy. Every time it sees some big company acting like it owns the world, slurping up customers' data behind their backs, it only strengthens Facebook's resolve to make things right. It'll do whatever it takes to get the word out and sound the alarm, even if that means hiring a PR firm to use sneaky tactics and badmouth the wrongdoer by proxy. That kind of behavior simply will not stand.
At least, that's how Facebook felt about it last week, when it was slinging some mud at Google's Social Circle. But when the slurping is being done by Microsoft, which owns a portion of Facebook, well that's not such a problem at all.
The social network has allowed Bing to futher integrate itself with Facebook information, allowing Bing to deliver pages that the user's friends have given the nod by way of the "like" button.
Perhaps it's a minor little hookup that most people will barely notice, much less get upset over. And it's not unexpected or odd, given Microsoft's and Facebook's prior relationship. But it does come just a week after it was learned that Facebook was trying to give Google a hard time for doing almost the exact same thing with Social Circle -- dinging it for intruding on user privacy.
The difference, perhaps, is that here Facebook is voluntarily giving Bing the go-ahead; in the Google case, Facebook pointed out that it never authorized Google to scoop up its data. But it also said that all it wanted to do was to verify that people didn't approve of what Google was doing -- collecting and using information from their accounts for inclusion in another site's search engine. But that looks a lot like what's happening with Bing. So whose approval is the one that really matters?
As much as it annoys Facebook when others use its data without permission, it seems to irritate it even more when others try to dictate what it can and can't do with that data.
There's a bill currently under consideration in California, SB 242, that would impose changes in the way Facebook and other sites handle user privacy. Right now, you can sign up for a lot of different kinds of social sites and immediately start working the room -- posting photos, updating your status, messaging friends, everything. If you want to adjust your privacy settings, though, you'll probably have to find them yourself. And the default settings are typically set to the least private modes possible.
The bill would require sites to make privacy settings an integral part of the the sign-up process, not something you go and adjust only if you're aware they exist and are able to find them. And it would require settings to be private by default.
It'd also require sites to remove any personal info at the command of the person who posted it, or the command of a parent if the person is a minor.
But opponents to the bill are making their voices heard. Facebook joined companies like Twitter, Match.com, eHarmony, Yahoo and even Google to write a letter formally opposing the legislation. One argument against it is the possibility of unintended consequences. Opponents say making users choose privacy settings before they've had any experience with the site at all could lead them to choose bad settings or even completely misunderstand what it is they're actually doing. It's hard enough for an experienced Facebook user to figure out all those buttons and knobs. If you don't even know what a News Feed is, how can you say how private you want it to be?
A Little Help?
Third-party iOS app developers have found a company that might be even more annoying to them than Apple. Its real name is "Lodsys," but lately it's been called many, many things in the hate mail and nastygrams directed its way. One of the more printable things it's been called is a "patent troll."
But Lodsys claims trolling is not what it's doing. It says it's just asserting its rights in a patent it owns. Lodsys says it's the patent holder on a technology used by certain iOS apps for in-app purchases. It claims a wide variety of iOS developers are violating its patent with apps that offer in-app purchases, and it's begun to serve some of those devs with papers threatening litigation if some kind of arrangement isn't made.
Perhaps making it a bit less trollish-looking, Lodsys at least isn't trying to drive developers into outright financial peril. It just wants a cut of future revenue -- 0.575 percent. So for every $1 million in sales an app does, Lodsys wants a little under $6,000. Doesn't seem like that big a bite.
But some devs don't think Lodsys should get a dime. Some say that if the issue is pressed much further, they'll just redesign their software to not use in-app purchases at all.
There's also the question of what role Apple plays in all this. Lodsys has acknowledged that Apple itself has licensed its technology, so Cupertino's not going to get sued. If that's true, why wouldn't Apple have bundled that license in with all the other tools the company requires third-party developers to use in order to make iOS apps in the first place? Was that a brain fart on Apple's part, or do its lawyers really have a fundamental disagreement with Lodsys' lawyers over what that patent license really means?
As of Friday morning, Apple hadn't commented on the situation, and that's made some developers feeling like they've been left in the lurch. Cupertino should probably buzz in with some kind of answer soon -- otherwise, it risks further alienating its army of software makers.
Game On? Maybe?
Our long global nightmare is over. The PlayStation Network is back, and it's got a handful of trinkets to give you as an I'm-sorry offering. So it's time to stop running around outside in that springtime weather and get back to the basement with the PS3 where you belong.
Sony's game console network had been on hiatus for nearly a month after it was breached by hackers who stole the personal information of tens of thousands of PSN members. After Sony detected the foul play, it pulled the plug on the network to work out the kinks in its security system. Nearly a month later, Sony now claims it's more or less unkinked.
The whole incident was a real burn for Sony's reputation. Company executives were pressed for answers by government officials in Japan and the U.S. Some users thought it didn't act quickly enough to inform customers about whatever personal data the hackers may have accessed, and lots of gamers thought it was the height of lameness not to be able to do any online play for three and a half weeks.
It's likely the outage will prove to have a real impact on the PlayStation division's bottom line. Retailers have been telling stories about frustrated customers trying to trade in PS3s for Xboxes. They've also blamed slow sales of new releases on the fact that until the network got back up, users couldn't do online play, which is kind of a big deal for some games.
Once the PlayStation Network returned, Sony apologized by showering users with an odd variety of knicknacks and downloads: a couple of oldish free games; a limited selection of movies; a few service upgrades; and a grab-bag of various add-ons for games you may or may not own. Kind of looks like they did most of their gift shopping at the dollar store for this one, but remember, it's polite to smile and say thank you.
By the way, the network hasn't been restored everywhere. One country's government still hasn't allowed Sony to bring the PSN back online within its borders, and it just so happens to be the one Sony calls home.
Japanese officials say Sony still hasn't completed all the tasks it said it would carry out earlier this month to ensure the security of the network, and they're holding the company to those promises before it can resume network activity on its home turf. Call it tough love -- Sony is one of Japan's most prominent corporations, and the country's government has an interest in ensuring it doesn't have another security disaster.