A U.K. company that makes an app to help charities raise money says it may need some charity of its own, after nearly being run out of business because of changes to how Facebook lets it connect with its fans.

The makers of Charity Engine grabbed the vanity Facebook URL https://www.facebook.com/CharityEngine as soon as it became available in January 2010, even though its product was still far from being launched. The company used Facebook to explain the product, which offers computer users prizes to use idle time to raise money for causes, to prospect for users and to alert those fans as soon as it was launched.

Through most of 2010 the company placed advertisements in Facebook and its fan base quickly grew.

“By November we had over 100,000 fans from all over the world and we'd never even posted to the page,” CEO Mark McAndrew said. “As Charity Engine needed just 10K users to be viable, and cost nothing to download, this was hugely exciting.”

Now, however, Charity Engine is claiming rapid changes to how Facebook’s EdgeRank promotes posts are threatening its very existence. Charity Engine can’t contact its Facebook fans with any degree of certainty to let them know the product has launched unless it pays for a promoted post, something it says it can no longer afford to do because its Facebook marketing strategy backfired.

Facebook has yet to respond to requests for comment, but last month, when similar allegations were raised, Facebook defended how it presents brands’ posts to their Facebook page. At the time, the company essentially blamed brands for not creating engaging content, which is ultimately seen by fewer users.

“If a brand is continually putting up low-quality content that no one is engaging with, that content is going to be optimized out of the Newsfeed,” a company employee said at the time.

Sinking Engagement Levels

Charity Engine’s excitement over the initial response to its Facebook page was short-lived. As the company started making wall posts, the engagement was about one-in-500 responses from fans. On its long-anticipated launch day, Charity Engine found that Facebook had ditched group messaging, meaning, on average, just 12% of their fans would even see any post on its wall (including posts promoting the launch). And, in reality, McAndrew said, the number was closer to 5%.

“Facebook actively prevents sharing with the argument that EdgeRank is a useful and friendly filter, only letting the most-wanted content get through,” McAndrew said. “With fans worldwide, we knew our wall post wouldn't be seen by everyone, but now we knew it hadn't even been sent to everyone. How many had never received it?”

In those days, before Facebook started offering paid, promoted posts, the company’s answer was simple: create more engaging content and EdgeRank would score that content more highly, meaning more people would see Charity Engine’s posts. Charity Engine started producing non-commercial content designed to engage fans. But McAndrew said no matter what they posted, engagement continued to plummet.

McAndrew said his team started talking with Facebook directly. They took solace in the fact that, at the very least, they could send messages directly to followers, although the process was more tedious than simply posting it on the fan page. Then last year Facebook said it was suspending the ability for brands to directly message fans. 

At the same time, McAndrew said there were other problems, including an analysis of the brand’s followers that found about one in five of Charity Engine’s likes were from dead or fake accounts. Conversion and click-through rates were “terrible.”

McAndrew said in hindsight, his firm probably should not have invested its entire marketing budget in Facebook. But the early successes led the team to believe the giant social network was the best method for reaching potential users. By January, when it was set to award its first prize, Charity Engine had just 1,300 users, well below the 10,000 the firm needed to remain viable.

False Hope In Promoted Posts

“We cancelled our advertising and complained to Facebook customer services, an experience not unlike writing several letters to Santa Claus and throwing them down a well,” McAndrew said. “But, eventually, our prayers were answered – fan pages would be given the ability to 'promote' their posts (for a fee, of course) to fully 75% of their fans! The page wasn't a write-off at all, we would still be able to contact them.”

McAndrew said that sounded like a bait-and-switch marketing ploy, but he also felt stuck: The company had spent more than two years building up its Facebook page and followers. The relief promoted posts brought was short-lived: by the time the service was rolled out to Charity Engine, McAndrew was told it would cost up to $4,500 per post. Had he known how much promoted posts would have cost ahead of time, McAndfrew said, he would have spent the money on a half-page ad in the New York Times, which is what he estimates his company has spent on Facebook advertising to date.

Meanwhile, the number of fans seeing posts on Charity Engine’s Facebook page has continued to drop to less than 1%.

“Tried demanding a refund, threatening to go public or delete the page, even pleaded with them to not basically put us under - and offered to share a software patent they could have used,” McAndrew said. “Nada.”

Charity Engine’s solution? It’s giving up on Facebook. On Friday it posted a message to its fans saying just 0.3% of its followers were now seeing its posts because it wouldn't pay as much as $4,500 to promote each post.

“Have we shown you our Google+ profile...? ;)” the post concluded.

The man who claimed he was entitled to a 50% stake in Facebook because founder Mark Zuckerberg stole the idea from him stands accused of forging documents, filing a bogus lawsuit and orchestrating a multi-million dollar scheme.

On Friday, Federal investigators arrested Paul Ceglia, 39, of Wellsville, N.Y. on charges that included fabricating and destroying evidence. The charges were included in a 13-page complaint filed in federal district court in Manhattan.

The arrest appears to signal that federal investigators support Zuckerberg’s account of his work-for-hire agreement with Ceglia and seemingly ends the bizarre legal sideshow that has dogged Facebook during its meteoric rise.

Facebook Seems Pleased

"We commend the United States Attorney for charging Ceglia with federal crimes in connection with his fraudulent lawsuit against Facebook,” said Orin Snyder a partner Gibson Dunn and the attorney representing Facebook and Zuckerberg in the lawsuit. “Ceglia used the federal court system to perpetuate his fraud and will now be held accountable for his criminal scheme."

If convicted, Ceglia could face up to 40 years in prison. 

Doctored Documents

Ceglia "doctored, fabricated, and destroyed evidence to support his false claim," according to a statement from the U.S. attorney's office in New York City. Investigators also found a copy of the original contract between Zuckerberg and Ceglia which makes no reference to Facebook, according to the complaint.

Ceglia did contract Zuckerberg to programming work for the website StreetFax.com in 2003. In an April 2011 lawsuit Ceglia claimed Zuckerberg promised him a 50% stake in what would eventually become Facebook. Now, however, Ceglia’s claims are unraveling: federal investigators said Zuckerberg did not come up with the idea for Facebook until months after he worked for Ceglia and that he never received the bogus emails Ceglia cited in his lawsuit as proof of Zuckerberg’s promise.

U.S. Postal Inspectors verified Zuckerberg’s account that he had not received the emails by checking email servers at Harvard University, where Zuckerberg was a student and would take on work-for-hire programming jobs like the one he did for Ceglia.

An attorney for Ceglia could not be reached for comment Friday evening.

We’ll update this post when we hear back from Ceglia or his lawyer.

The Bulgarian blogger and digital rights activist who made headlines on Tuesday when he reported acquiring more than one million Facebook data entries for just $5, said Friday he is cooperating with Facebook as it conducts an internal investigation, but won't comply with the company's request to remove blog posts or not talk about the investigation.

Facebook Requested Silence

In an interview with ReadWrite, Bogomil Shopov said he had been contacted by Facebook's Platform Policy Team after revealing on his blog that he had acquired the list, which included email addresses of active Facebook users who were primarily located in the U.S., Canada and Europe. Shopov said officials with the company were upset because they feared his public revelation would upend an internal investigation.

(Read Shopov's new blog post: Mixed Feelings After Conversation With Facebook.) 

Facebook declined elaborate on the details of its investigation.

“Facebook is vigilant about protecting our users from those who would try to expose any form of user information. In this case, it appears someone has attempted to scrape information from our site," Facebook spokesman Chris Kraeuter said in an email statement. "We have dedicated security engineers and teams that look into and take aggressive action on reports just like these. We continue to investigate this specific individual.” 

Facebook Wanted To Destroy The Data

In addition to requesting that he keep conversations with Facebook private, the company also requested that Shopov destroy the data after sending a copy to Facebook. Shopov said he complied with the request to destroy the data but was continuing to speak with news outlets to make Facebook users aware of the breach.

That didn’t sit well with Facebook, according to Shopov. 

“Their version is [they are conducting] an ‘internal investigation’ and one of the reasons they are angry about my blog posts is that the seller can ‘go deep’,” Shopov said, explaining Facebook is concerned the seller will disappear before the investigation can figure out how the data was obtained.

A Black Market In Facebook Data?

Shopov provided ReadWrite with a cached link to the site where he purchased the data. The offer was removed within two days after his initial blog post on Tuesday, October 23, but the cached version shows that the seller obtained the data through an unidentified, third-party application. This raises the question of whether there's an international black market where anyone can buy supposedly secret Facebook user data. 

Shopov verified that some of the addresses were legitimate and had planned to notify people on the list that he had purchased the data. Facebook asked him to not notify people included on the list, Shopov said.

“We agreed with Facebook not to do that,” he said. “That was actually my first reaction, to tell them and to teach them about their rights.”

(Read Shopov's original blog post I Just Bought More Than 1 Million... Facebook Data Entries. OMG!)

Lead image: 1000 Words / Shutterstock.com

Over the years you’ve voluntarily (and involuntarily) subscribed to scores of email newsletters. Of the emails you don't need to read immediately, some you no longer care about and others are destined for your read-it-later folder. Managing all that so-called bacon wastes up to a full work day over the course of a year. Until now.

Most email programs, including Gmail, allow us to put messages into folders using filters. But a filter might mistake a Kayak confirmation for a Kayak fare-sale alert. And even if all the read-it-later file messages have been correctly filtered, we still need to sift through them, delete them and maybe, if we’re feeling extra motivated, go through the cumbersome unsubscribe process for the newsletters we realize we haven't read in months or years.

Our Recommendation: Unrollme

All of the programs I looked at were easier than a manual, message-by-message review to sort email bacon. But Unrollme stood out because it separated email I no longer wanted and email I still wanted to set aside, but not in my inbox.

Unrollme, which is free, compiles a list of newsletters in your Gmail inbox and sends you a daily note at a time you choose.

From there, it’s one click to manage each newsletter -- unsubscribe, direct to your inbox or group in categories that are delivered as a single, daily email called a RollUp. That makes comparing that previously-mentioned Kayak fare alert with the weekly fare tracker email from Orbitz and the e-savers from our favorite airline in a single message possible.

Facebook topped analysts estimates with its third-quarter earnings release, thanks to stronger than expected mobile advertising revenue.

The Menlo Park, Calif.-based company, which has struggled since its initial public offering in May, reported third-quarter earnings of $311 million, or 12 cents a share, on revenue of $1.26 billion, up from net income of $227 million a year ago. Those numbers beat analyst expectations. Wall Street had estimated the company would earn $285.12 million, or 11 cents a share, on revenue of $1.23 billion.

The company said 14% of its revenue came from mobile advertising. Three months ago, when Facebook announced lackluster second-quarter results, the company had no measurable revenue from mobile advertising.

Update: “I want to dispel this myth Facebook can’t make money on mobile,” founder and CEO Mark Zuckerberg said in a conference call with analysts Tuesday afternoon. “That may have seemed true earlier this year because we hadn’t started trying yet.”

Zuckerberg said that on a given day, there is a 40% chance a desktop user will visit Facebook. That number, he said, jumps to 70% for mobile users. He also repeated a previous argument that in coming years smartphones will far outnumber desktop computers worldwide.

"Our mobile user base is huge, growing and even more engaged than our desktop user base," Chief Operating Officer Sheryl Sandberg added. "Our results to date suggest we're on the right track....we have become one of the largest mobile advertising platforms in less than eight months."

On a year-over-year basis, Facebook served 27% more ads in the third quarter. Chief Financial Officer David Ebersman said the increase could primarily be attributed to the increase in its user base, which topped one billion in the quarter. A 7% increase in the ad rate Facebook charged, however, was due to increase ad placement in newsfeed on the desktop site, Ebersman said,

Investors shrugged off a decline in desktop advertising revenue and instead responded to the renewed focus on its mobile business, pushing Facebook shares up as much as 1% in afterhours trading. Executives were expected to speak with analysts in a conference call at 5pm ET Tuesday afternoon.

"We opened up a lot of inventory in mobile this quarter and we had a lot of advertisers shift from desktop to mobile," Ebersman said.

On the same day that Zynga said it would layoff 100 employees in Austin and close its Boston office, Facebook said it continued to depend less and less on Zynga. Revenue from Zynga games accounted for 7% of Facebook's total revenue in the three months ended Sept. 30, down from 12% a year ago and 10% a year ago.

“Gaming on Facebook is not doing as well as I’d like,” Zuckerberg said. But while Zynga revenue declined, “revenue from the rest of our gaming partners is up.”

Facebook will release its second set of quarterly earnings as a public company on Tuesday, and early indications are they will be better than the results the social network announced in July. But even if they aren’t, Wall Street seems to be falling in love with the company all over again, as Facebook now seems to have an actual plan to get more of your money.

Like a lot of Web companies, Facebook adopted the drug dealer’s business model: The first one's free. That is, give the product to the users for free so they get hooked on it and start spending real money.

But unlike a lot of other tech companies, Facebook promised early on it would never charge users. That means while competitors like LinkedIn pull in a few dollars per user per month on average as a result of premium subscription models, Facebook has to eke out about 40 cents per user per month through display advertising.

When you have more than a billion users, a few cents per user per month is still a lot of money, but not nearly as much as Wall Street had hoped Facebook would earn.

A Better Ad Strategy

Facebook matched analysts estimated when it released second-quarter earnings in July, but the company’s shares still fell, mostly because comments made by its top executives in a conference call with analysts failed to offer concrete proof the company had a plan for growth.

Facebook has spent the past three months hoping its actions will speak louder than words. It released faster mobile platforms for iOS and Android. Faster platforms mean more content consumption which means more ads served. It has struck partnerships to better understand how its ads work and convince advertisers that an unclicked ad on Facebook may still lead to an offline purchase.

Digital media management company Spruce Media is already seeing its clients spend more on Facebook ads as a result of the improvements to the programs and mobile platform, according to COO Lucy Jacobs. She expects spending to increase even more this quarter, as her clients take advantage of targeted advertising and promoted posts through Facebook’s platform.

“Overall Facebook spending is healthy,” she said. We’re “seeing sequential increases in spend and advertiser excitement about the company’s new ad products.”

But the biggest change, and one that drew praise in this morning’s Wall Street Journal, has nothing to do with advertising. But it may be why investors may be taking a second, third or fourth look at Facebook shares.

Going Beyond Advertising

The Journal was enamored by Facebook Gifts, a product that makes it easy for users to send each other gifts - including real, physical gifts, not just online tokens. It fits in nicely with Facebook’s birthday reminders, not to mention congratulations gifts when someone posts about an engagement, a new job, a new baby or any other life event. Unlike Amazon, you don’t need to know the recipients address, as they will have filled that in on their own.

But there’s another reason why Wall Street likes the product - and a reason why users might want to be wary. In the process of sending that gift, Facebook also gets your credit card number.

“Facebook probably can build a sizable business around gift-giving, but having credit-card data opens up a new range of revenue opportunities,” the newspaper noted. “The ability to generate cash from ‘likes’ isn't clear. But the commercial potential from a ‘buy’ button, with commissions coming back to Facebook, could be quite large.”

The buttons debuted earlier this month and closely foilowed Facebook's decision to make it easier to send gifts within the social network. It appears Facebook wants to mediate online purchases, taking a cut of the action.

Facebook is evaluating all upgrades, looking to see if each is a pure monetization play. PUre revenue moves help Facebook members least, usually. But in the case of the three new buttons, they may benefit. The buttons are advertising strategies, but they may decrease the ads appearing on newsfeeds.

Diane Buzzeo, CEO and founder of e-commerce software maker Ability Commerce, said that if they are implemented carefully, Gifts and Collections may help Facebook ads be less intrusive.

“Facebook's new approach of seamlessly integrating its new features, Gifts and Collections, into the social-networking experience may lead to a more successful outcome, while decreasing the platform's reliance on advertisements in the process,” Buzzeo said. “Facebook (is) resetting the standards for how retailers sell online." The new strategy bears watching, she said.

Still An Advertising Company

I first approached this post as a look at whether Facebook is considering a fight with Amazon by moving retail advertising. But the answer from the five social-media and digital-advertising experts I talked to was a resounding "no."

If anything, Gifts, Collections and Want solidify Facebook as an advertising platform.

“The Collections model looks much more like a social-media advertising model than a pure commerce play,” said Scott Forshay, a strategist specializing in mobile and emerging technologies for tech consulting firm Acquity Group.

Forshay said, “It seems a much less intrusive and awkward mechanism for spreading brand communications since the community effectively spreads the message, as opposed to the current strategy of injecting advertising into users' newsfeeds.”

In other words, you are always going to see ads in Facebook. Now, however, the ads may be disguised as shared content or, at the very least, should be more relevant. It’s up to individuals about whether repackaged ads is a good thing, but my instinct says most understand that Facebook needs to make money to survive. More-relevant ads may seem like the lesser of all evils for the ad-conscious.

Engineering professors and graduate students at University of California-Riverside have coined a new term to describe malware distributed on social networks, but they didn't stop there: They also developed an app to fight it.

“Socware” – pronounced “sock-where” - describes all criminal and parasitic behavior on Facebook and other online social networks (SOCial-WARE, get it?). But the term may be secondary news compared to the researchers released, which they claim stopped 97% of all socware while blocking legitimate messages only 0.005% of the time. 

A white paper outlines the study, which included 12,000 people who had installed the MyPageKeeper app and their collective 2.4 million friends. All-in-all, the study analyzed more than 40 million messages sent on Facebook.

The researchers, who described socware as an escalating arms race between scam artists and Internet security firms, said traditional blacklists, which have been used to block malware in email, have become ineffective as more communication has moved onto platforms like Facebook. They also found an increase in malware programs that hijacked accounts for the paid liking services I wrote about last month.

“Facebook is becoming the new epicenter of the Web, and we showed that hackers are adapting to this change by designing new types of malware suited to this platform, which we call socware,” they wrote.

A Sucker Born Every Minute

Seasoned and even ordinary Internet users are often left wondering “Who the hell would fall for that?” For example, MyPageKeeper researchers analyzed the data in their study and found:

• Only 54% of socware messages included URLs that had been shortened using a link shortener. The researchers had expected the number to be higher, as shortened links can hide suspicious-looking URLs - but apparaently suspicious URLs don't bother some users.
• Of the un-shortened URLs, the scammers often used what the researchers called “obviously fake domain names,” including  http://iphonefree5.com and http://nfljerseyfree.com.
• Certain words should be warning signs for users: "OMG," for example, was 332 times more likely to appear in a socware status update, while the word “bank” was 56 more times likely to appear in socware messages.

Anyone who clicks on a suspect link is vulnerable, but Facebook seems to be the chosen stomping ground for socware criminals. About one in five of the socware links were hosted on Facebook itself, and thousands of socware messages were sent through the network everyday.

Facebook declined comment, saying it does not comment on third-party reports and papers.

“Malware on Facebook seems to be hosted and enabled by Facebook itself,” Michalis Faloutsos, a professor of computer science and engineering, said in a statement “It’s a classic parasitic kind of behavior. It is fascinating and sad at the same time.”

Image courtesy of Shutterstock.

College admissions officers have learned to check applicants' Facebook profiles, and what they see there can have a negative impact on the students' chances. Guess what? The kids are a step ahead of them.

Parents, teachers and guidance counselors warn high school students that what they post on Facebook could hurt their chances of getting into college. And according to a Kaplan survey of college admissions officials released last week, it’s not an idle threat: More than one in four respondents said they check Google and Facebook for information on applicants, up from one in 10 when Kaplan started tracking the trend in 2008.

Of those who check, 35% said they have found information that negatively impacted an applicant’s chance of acceptance, up from 12% last year.

“It doesn’t matter,” my 15-year-old niece said over dinner last weekend. “The seniors in my school just hide their profiles or make up a new name and then change it back when they get accepted to college.”

It’s not just the students at her school. My own college-aged students, students at other high schools, and teachers and guidance counselors say that hiding profiles under aliases is just one of the tricks students use to dodge scrutiny during the college application season. Some deactivate profiles, others amp up their privacy settings. And still others are set up a second Facebook profile they call their “ideal self” account.

Admissions Jiu Jitsu

“Why say you went to a party on a Friday night when you can say you volunteered at a soup kitchen? Why say you spent the weekend playing Xbox when you can talk about the new art opening at the museum?” said Brent Busboom, an English teacher at Reno High School and Northern Nevada’s 2007 Teacher of the Year. Reno High is one of the best public high schools in Nevada and many of its students go on to top-tier colleges.

Some contents of ideal-self profiles are legitimate. Others, however, are embellished or exaggerated. Students don’t see an ethical problem, Busboom said. It's just "admissions jiu jitsu."

“Since students don't volunteer this information to the admissions office, they don't see it as lying,” he said. “Instead, they feel that if admissions officers are going to dig up dirt on them by prying in their personal lives, then they are going to game the system and create fake personas for them to discover.”

Silly Rabbit, Tumblr Is For Kids

Facebook is still popular enough that a college admissions official will raise a red flag if a kid claims he or she isn’t on Facebook. And the ideal-self profiles come in handy with certain scholarship sponsors, which have started requiring applicants to accept Facebook friend requests as part of the review process.

Busboom’s account of rampant ideal-self profile setups was confirmed by Sedgrid Lewis, who owns Spy Parent, a company that helps parents monitor their teens’ online activities. It also may partially explain why teens are spending less time on Facebook and adopting other social networks like Twitter and Instagram, or simply favoring the old, reliable SMS message. 

“It started a couple of years ago when adults started taking over Facebook,” Lewis said. “This is why you are seeing more teens cross over to Instagram, Tumblr, and Twitter. Auntie and Grandma are not on those pages.”

Anyone can call himself a social media expert and find clients willing to pay thousands of dollars for advice. Here are some things to consider before hiring a so-called expert, including whether you really need a social media consultant.

A friend of mine who works for a major grocery store chain mentioned to me that, during a PowerPoint slideshow presented at a meeting, up on the screen flashed a ReadWriteWeb story I wrote about Best Buy's social media failures. The presentation was delivered by a marketing consultant who was paid handsomely to get the company up to speed with Facebook, Twitter, Pinterest, Instagram, and the rest.

I asked my friend what she had learned. The answer was jaw-dropping in its simplicity. The consultant's tactics seemingly came from the book Social Media For idiots and basic SEO how-to websites. There was no discussion about leveraging Facebook's social graph or using promoted posts on Twitter. By and large, the strategy outlined in an all-day meeting would have done little to engage existing customers and even less to attract new customers.

(Both the chain and the consultant declined comment for this article, and because my friend is not authorized by her employer to speak to the media, I won't identify any of the three. Suffice it to say that I often have similar conversations with people who work in industries other than tech.)

My friend's employer is plagued by common issues: IT spending and hiring are an afterthought, and the in-house marketing staff is qualified to manage in-store displays and traditional advertising, including print, broadcast and outdoor. In other words, the company has little digital expertise. That leaves it open to exploitation by so-called social media experts who take a one-size-fits-all approach to every client. These consultants often bill tens or hundreds of thousands of dollars before anyone realizes there is little or no return on the investment.

Tell Me Something I Don’t Know

The consultant included my ReadWriteWeb article in his presentation as a warning about what could happen to companies that don’t have a social media strategy: They risk going bankrupt, as Best Buy did (although, as ReadWriteWeb's Dan Frommer elegantly explained in April, the reasons behind Best Buy’s trouble were not so simple).

The rest of the presentation was part Social Media 101 (what's the difference between Facebook, Twitter, Google+ and Pinterest?) and rudimentary lessons in using social media (what’s a hashtag?). The consultant concluded by describing his recommended strategy: tweet photos of your employees preparing food, update your Facebook page with daily specials, and always include a link to your Website in your tweets.

Note that he never suggested hiring someone so the in-house marketing team could execute a social media effort. Instead, he pushed the company to retrain traditionally schooled marketing people who tend to be reluctant and skeptical about digital media after years of doing things the old-media way. That, in my mind, also gave him ready-made fall guys to blame when his recommendations failed to move the needle.

Why My Friend’s Company Should Fire Its Social Media Consultant

There are, in fact, several reasons why my friend’s company should fire its consultant ASAP, but only one of them matters: The strategy he prescribed won’t work. Here’s why:

• It’s too basic. It’s most likely the same strategy he offers to competitors and companies in completely different industries. It doesn’t take into account the needs of this particular chain.
• It treats social media as another advertising platform. At best, his strategy treats social media as a brand-awareness tool. But the companies that have had the most success with social media are those that do all the things true experts recommend: engage with users, have conversations with customers and occasionally offer a targeted special to selected users.
• It preaches to the converted. His strategy allocates all the marketing team's attention to people who already like the company on Facebook or follow it on Twitter. It does nothing to attract new followers (who can be seen as potential customers). The easiest way to do that is to explain promoted posts and tweets, but to do that would be to admit that a social media consultant’s advice only goes so far before a company has to pay for engagement.
• It doesn’t consider that social media may not be right for every company. My friend's company doesn’t have a loyalty rewards program, which will become increasingly important as Facebook tries to link online advertising to offline purchases. There are other reasons why companies may want to just say no to social media, including the fact that spending too much time on a strategy with no proven return on investment will detract from what the company already does well.

If you’re tired of logging into Facebook to reset your privacy options every time the company updates its user agreement, a new Chrome extension may be the fix you’re looking for.

PrivacyFix is being released today, and after playing with it, I’m thinking it may be the long-sought after answer to privacy concerns that regular Google and Facebook users hear on an almost-daily basis.

“Default privacy settings on sites like Facebook are revenue- driven, not privacy-driven,” PrivacyFix founder Jim Brock said in a release. “Privacyfix puts you back in control of your data.” 

The Chrome extension runs you through a checkup of your privacy settings for Facebook and Google, and it lists all the cookies currently tracking you as you use your browser. The extension takes you to each site to make fixes, explaining each change in clear, direct language that makes the pro and cons of each setting change easy to understand.

In less than 10 minutes I had recalibrated my privacy settings and sent automatically generated email requests to delete my information from the sites PrivacyFix couldn't block. If any settings change - as is wont to happen amid ever-changing user agreements - or if I visit a new site that is going to install tracking cookies or otherwise violate my privacy, PrivacyFix’s HealthTracker will alert me in the upper-righthand corner of my browser.

What Gets Blocked

PrivacyFix promises to block tracking by over 1,000 sites, but pays particular attention to Facebook and Google. It promises to block the offline data tracking by Facebook that we wrote about last week, and will remind you at regular intervals to run a privacy scan.

PrivacyFix is offered by PrivacyChoice.org, which helps one million people track their privacy. The product was developed with input from several hundred testers who helped make it easy to understand and use.

“The data collection industry sees easier privacy controls as a threat to its existence, so initiatives like Do-Not-Track have seen fierce opposition,” Brock said. “Our biggest risk is that Facebook and Google will interfere technically with how Privacyfix operates. But that’s a battle we’d love to fight.” 

For the record - as though it needed stating - PrivacyFix also makes it clear at several points on its site and the in-app prompt screens that it does not store your data and has no way of knowing who you are.

Is PrivacyFix For You?

I’ve only been using PrivacyFix for a few hours at this writing, but my review has been fairly exhaustive and I plan to keep on using it.

The initial scan was eye-opening. I had manually gone through my Facebook privacy settings earlier this year, amping up my privacy and deleting apps I didn’t use anymore. PrivacyFix showed me that many of the apps had been reactivated on Facebook and several Facebook privacy settings - including the one that allows Facebook to use my likes in advertising - had reverted back to less-private settings.

It told me that Facebook tracks on a whopping 86% of the sites I have visited and makes, on average, about 16 cents per year on ads at my level of activity.

I feel I have the most to loose with Google: By boosting my privacy settings, I’m sacrificing some efficiency in my searches. But that’s a small price to pay, considering the amount of data I end up unknowingly sharing every time Google or Facebook change their user policies or develop new features to better target ads at me.

Facebook has not kept secret its scanning of private messages for references to criminal activity. What is new is that it also looks for links and records those as likes. This practice gives the appearance that more people are liking more things on the social network.

Kashmir Hill of Forbes asked, “Do over 6,000 people really ‘Like’ the Placenta Teddy Bear, or is that just reflective of the number of times a link to that page has been sent around in horror?"

Facebook clarified the discovery, noting that the scanned links were counted as engagement, not endorsement. It also said there was a bug that had scanned links being counted as double, but it conceded that this was one of the ways it boosted the number of shares. 

But the main thrust of the statement was to stress that no private user information was shared. “Absolutely no private information has been exposed,” the company said, and “when the count is increased via shares over private messages, no user information is exchanged, and privacy settings of content are unaffected.”

This statement misses the point. Facebook's practice of scanning messages and counting links as likes isn’t a privacy issue. It's common knowledge that what users do online - even in so-called private messaging - is potentially public. Rather, Facebook's activity raises a credibility issue. It shows that the company is fudging the numbers when it comes to advertising.

Last month, when Facebook said it may end up removing as many as 1% of all likes from the site because they were phony, experts were quick to note that the actual number of fraudulent likes, shares and comments was probably much higher, with some estimates exceeding 10% of all likes and shares on the site.

At the time, we suggested Facebook was merely going through the motions of cleaning up the site.

“It's not in Facebook's best interest to proactively solve this problem," said Tom Corson-Knowles, an online marketer who consults with small-business owners on ways to promote products on social networks. "Facebook's revenue is directly proportionate to the number of pageviews the site gets, and banning one percent of [pageviews] will cost the company a lot of missed ad impressions."

The latest news is more than a suggestion of impropriety. it's an outright confirmation.

So Facebook has reached the impressive milestone of 1 billion active monthly users. What does it mean? Hard to know without a bit more information.

In today's exclusive interview with Matt Lauer on NBC's Today Show, Zuckerberg said, “I really only want to go out and talk when there’s something to say.” But that’s not entirely true. Zuckerberg only likes to go out when there is something good to say, and, even then, only when the interview is highly scripted.

And that’s why Lauer pressed Zuckerberg harder about his May wedding than the company’s dismal stock performance. Lauer seemed more interested in comparing who has more drawers for their clothes (Zuckerberg one, Lauer considerably more) than digging in deep on how the company plans to catch up in mobile. The interviewer let it go after the CEO pointed out that there are five billion mobile phone users in the world that Facebook could capture as customers.)

The tech and business press weren't much more circumspect. In the most-widely circulated story so far, TheNextWeb’s Emil Protalinski gushed over Facebook’s “big news” and even Bloomberg assumed “the next billion” was a given.

Unasked & Unanswered Questions

I wish Lauer had asked Zuckerberg the following questions. (I've been trying to do it myself. I'll update this post as soon as I hear back.)

• Facebook officially recorded its billionth signup on Sept. 14. Why the delay after months of predictions that it would reach one billion users in August, if not sooner? (Some reports have alluded to the fact that Facebook has had trouble with phony accounts and was most likely waiting until it was sure it had one billion “real” users. Could be.)
• What exactly is an active monthly user? It has been widely reported how difficult it is to delete a Facebook account, but I’ve heard anecdotal reports of people deactivating their accounts, either permanently or for long stretches of self-imposed Facebook exile. Is there an uptick in deactivated accounts and, if so, were those counted in the 1 billion figure?
• How are we to understand the lag time between 900 million and one billion when compared to 800 million and 900 million? To me, it suggests that Facebook has saturated the market.

But even those question obscure the bigger issue: 1 billion users is impressive, but it's an arbitrary milestone. If Zuckerberg is serious about only talking when there's something to say, now is the time to say something. It’s time to let shareholders know exactly how (whether?) the company hopes to reach 2 billion users and to tell users how their experience will change as Facebook's status as a public company forces it to focus more on revenue and less on its original mission of connecting the world.

Ian Lurie, founder and CEO of Internet marketing agency Portent, is looking for 16,000 volunteers to help build a data set that will map patterns of interest among Facebook members.

Already he has used Idea Graph, his name for the data set, to figure out that cyclists are more likely than others to enjoy the cartoon TV show Adventure Time and that people who attend boat shows are more likely to watch extreme sports.

And, yes, Britney Spears fans are more likely to buy colon-cleanse products.

These may seem like random associations. “But there are patterns in all that randomness,” Lurie writes. And those patterns give marketers new paths to find their way into potential customers' lives.

Lurie's work shows how two seemingly unrelated interests can be connected by a common thread, a concept he calls random affinity. It could be a goldmine for marketers. 

“The only connection is the fact that an unusual number of people are interested in both,” said Luriek. “If marketers know common interests, it doesn’t mean they’ll be able to sell high-ticket items more often," she said, "but it does increase rapport with potential customers, helping them to remember the company, and giving the marketer other topics of interest to keep the communication interesting.”

Lurie collected much of his data by placing Facebook ads. Facebook’s precise interest ad function, which homes in on words users have added to their Timeline as opposed to demographic information, makes it easy for him to explore random affinities by showing related keywords when a user considers wording for an ad.

Now he wants to expand the program. First with a more comprehensive look at random affinities on Facebook, then by expanding to other social networks. Lurie is asking people who want to help build his Idea Graph to install a Facebook app that anonymously tracks likes. It's a rare opportunity to find out what how your unlikely likes line up with those of other people in the Facebook community.

At one time, social readers - those spammy Facebook apps that broadcast everything you look at to everyone in your friend list - were a key component of the social network's strategy to keep members in the walled garden. Only one problem: users hate auto-sharing. Now a third-party company says it may have solved Facebook’s dilemma.

So significant is yesterday's announcement by Janrain that is launching a transparent, one-click sharing app that Facebook joined the PR push. The social network's minions shared the happy news with reporters and tech bloggers who, like me, typically cover Facebook but may not be familiar with Janrain. 

Social readers help keep a user on Facebook, allowing them to easily share and read content without going to a third-party site. But there has been user backlash as people ended up sharing articles they didn’t want to share with friends and family. In May, in response to the user complaints, Facebook scaled back the amount of social reader articles being shared in newsfeeds.

The Janrain app, according to press materials distributed this week, still allows for seamless sharing of articles viewed in a social reader but gives users a sense that they have more control over what they share and how they share it. Users who opt in to autosharing of all content will still have a second chance to make sure they don’t share it with all of their friends.

“Unfortunately, the current crop [of social readers] has seen a backlash from users who don’t always understand that they are giving a website access to post about their activity online to their Facebook wall,” Larry Drebes, CEO of Janrain, said in a press release.

How It Works

Janrain’s one-click sharing works like most other social readers: Users can choose to share stories one by one or opt in to autosharing. The key advantage is that when they opt in to autoshare all articles, they will see a timer on their screen that counts down before sharing the link on their Facebook timeline. That gives users a chance to think about whether they really want to share “Tips to Spice Up Your Love Life After 60.”

Janrain and Facebook did not release screenshots or offer a demo of the product before the release was made official at 8 am ET Thursday. But Ben Foster, Senior Vice President and Digital Strategist at PR and marketing firm Ketchum, said that if the clock is prominent, it will be a big advantage over previous social readers, which have alienated both users and their friends.

“The countdown timer could be the key product innovation here,” Foster said. “It’s easy to forget that you’ve enabled auto-sharing, and if that timer is designed well and easy to use, then users can both express themselves to their friends and also consume interesting content that they don’t want their friends to see.”

EdgeRank Checker, a social media consulting company focusing on Facebook, posted a blog item about the matter and found the typical page had reach of 26%  prior to the Sept. 20, meaning that, on average, 26% of a page's subscribers would see messages posted on the page. That reach has dropped to 19.5% since Sept. 20. Similar drops were recorded in EdgeRank's measures of viral reach and median engagement for pages in its sample, which the company conceded was “relatively small.”

Facebook made the recent change to boost the relevance of users' feeds. "We’re continuing to optimize Newsfeed to show the posts that people are most likely to engage with, ensuring they see the most interesting stories," Facebook said in a statement to ReadWriteWeb. "This aligns with our vision that all content should be as engaging as the posts you see from friends and family."

Facebook’s goal, stated by founder Mark Zuckerberg, is to make sure all the content in your Newsfeed - even if it’s from a brand - works to keep you on the site longer. A Facebook employee said that the company constantly tweaks the algorithm that determines who sees what in their Newsfeed. (The employee requested to remain anonymous, citing company policy on making public statements.) 

In short, according to the Facebook source, if brands are seeing less engagement and reach on their Facebook pages, it’s because they’re not creating engaging content.

“If a brand is continually putting up low-quality content that no one is engaging with, that content is going to be optimized out of the Newsfeed,” the source said. 

Gaming The System

Facebook measures the quality of content through engagement: number of likes, clicks, shares and comments. Typically, a post’s reach is between 15% and 20%.

The source declined to reveal what kinds of content increase engagement. But he was quick to point out that Facebook charges brands less to promote content with high engagement rates than it does for sub-par content.

“Content that doesn’t get any play and is optimized out of Newsfeeds is more expensive to promote to more people,” he said. “That’s good for [people] because they are seeing relevant content, and it’s good for brands because we’re encouraging them to create engaging content.”

We warned you on the day Facebook filed for its initial public offering that, from that point onward, the company would be fixated on making investors and advertisers happy, in that order, even if it meant making users unhappy. So it has come to pass. How else to explain Facebook's latest effort to bolster advertising revenue, which portends yet another wave of privacy concerns and alienated users?

Matching Email Addresses & Phone Numbers

The new ad program lets advertisers match email addresses and phone numbers from their own files with the information shared by users on Facebook, making it easier to target ads. That follows programs launched in the past few months that let advertisers target ads based on surfing habits on other sites and ads that follow users once they leave Facebook.

How effective are these initiatives? Effective enough for Slate to declare that Facebook is finally a place where politicians can win votes through advertising. Effective enough that shares of Facebook are, at this writing, up in a second straight day of trading.

That may sound like good news, especially if you’re part of the two groups of preferred stakeholders. But Facebook could be trading a short-term game for long-term regulatory problems, and the most recent push seems like a desperate bid to woo institutional investors who can prop up the company's share price.

Regulators Ratchet Up The Pressure

Facebook's plan to boost revenue by revealing personal information comes at a time when regulators in both Europe and the U.S. are clamping down in response to privacy concerns. The EU measures have more teeth than those proposed by the U.S. Federal Trade Commission, which primarily targets how information from minors is used.

“These new limits will seriously hamper the company’s focus on a market of half a billion people in the EU and hone its efforts on US consumers,” said Darren Hayes, a professor at Pace University’s Seidenberg School of Computer Science and Information Systems in New York. “This change will require that the company become more intrusive about collecting personal data.”

Hayes expects the FTC to push forward with its new rules and perhaps open new investigations into Facebook as early as next year. Government actions could end in hefty fines and diminished confidence in the company’s ability to grow revenue without flagrantly violating privacy. “If President Obama is re-elected, then the FTC will be relentless with these investigations,” Hayes predicted. 

How Much Is Privacy Worth To Users?

Of course, fines and regulatory pressure probably won’t stop Facebook’s latest efforts to target ads at the risk of privacy. The company has, after all, made an art form of pushing ahead with intrusive initiatives and weathering negative publicity related to its privacy policies. The ultimate regulation comes from users who will, sooner or later, either quit Facebook or accept privacy breaches as the price of using the service.

When I started teaching college writing and journalism classes five years ago, the choice was to have students submit assignments the way I had 15 years earlier -- as hard copy -- or as a Word document. 

Neither situation was ideal. Paper, is, well, paper. Word seemed more efficient, but I soon realized different students had different versions of Word and were working on different operating systems.

Far too often I’d give up and have a student submit work by copying from a problematic file and pasting  it into an email. That eliminated Word's biggest advantage over paper: the ability to insert legible comments in the margins and track changes.

All that changed a year ago when I started requiring students to submit assignments using Google Drive, which was still called Google Docs then.

They were reluctant at first but we quickly ended the problem of lost documents, unreadable attachments and massive files clogging our email. The students didn’t have to buy additional software and, at most, I spent half of class showing them the basics of using the app.

But along the way, we also found an additional, unexpected benefit: It made learning to write easier for many of my students.

Google Drive Makes It Easier To Think With Your Fingers

Like every decent writer, editor or writing instructor I have ever met, I like to “think with my fingers.” That is, show the person what they’re trying to explain by simply banging out a phrase, sentence or paragraph into the documented being reviewed or edited.

The problem in the instructional sense is that that usually means the student looks over the professor’s shoulder as he rips apart the paper.

With Google Drive, we can be sitting on opposite ends of the same table or opposite ends of the continent. They will see my changes in live time and start to see why I’m making the changes. If they don’t like the changes I suggest, they can simply use the “Restore Previous Version” feature. And if they have a question about what I’m doing, they can open a chat box and we can discuss in real time.

Good For Groups

In most of my writing classes, students workshop first drafts. In some classes, they work collaboratively on a writing project (last year, for example, my first-year writing class researched updates to the school’s Wikipedia page). With Word and paper documents, that meant sacrificing valuable class time or having students try to find out of class times when they could all meet.

That is no longer a factor. Google Drive lets students make and respond to comments and editing changes when it works for them, which gives us more in-class time to work on direct instruction.

Making The School Newspaper More Efficient

I also serve as the adviser to the Comment, the student-run newspaper at Bridgewater State University in Massachusetts. Up until last year stories were submitted to a central email address as Word, with all the problems I previously mentioned, plus an added layer potential mishaps.

With Word documents being saved on different hard drives, student editors and page designers often ended up working on older versions of a story. In the best case scenarios, editors would have to re-edit a story once they found the most up-to-date version. In the worst case scenario, the wrong version of the story would be published, or different versions of the same story would end up on the site and in the print edition.

After experimenting with Google Drive last year, the paper started using is exclusively for copy this semester. Editors always know they are always working on the most recent version of the story and they can discuss edits with reporters remotely, which has made the paper’s tiny office much less crowded this year.

We got an added boost when Trello, which we also adopted to manage story ideas, announced just before the start of our semester that they students could now attach Google Drive documents directly to the Trello cards they create for each story they’re working on.

Known as the Children's Online Privacy Protection Act, the proposed rules represent the biggest overhaul of US privacy policy with respect to minors in more than a decade. They would require parental consent for users under 18 for a wide range of common data-collection techniques, including cookies and location tracking. Facebook allows users as young as 13 to become members, so the rules would affect the site's users between 13 and 18.

Facebook, responding to the FTC's request for public comments, submitted a letter arguing for a lower age of consent. The company suggested that the proposed rules would violate the First Amendment free speech rights of its minor users.

“Because the Commission’s proposal would restrict the ability of users who are 13 years old or older to ‘Like,’ comment on, or recommend the websites or services on which those plugins are integrated, it would infringe upon their constitutionally protected right to engage in protected speech,” Facebook said. “The Supreme Court has recognized on numerous occasions that teens are entitled to First Amendment protection.”

The company's argument is weak on two counts.

First, it misrepresents the FTC's action, according to Ted Claypoole, an attorney specializing in privacy with Womble Carlyle Sandridge Rice in Charlotte, NC. “The FTC is not trying to stop the teens from ‘liking’ anything or from expressing their interest in any topic," the attorney said. "Instead, the FTC is saying that Facebook must stop collecting and using data about these ‘likes’ and expressions.”

Second, Facebook's use of free speech as the basis of its argument is misguided at best, Claypool said. “These are business issues, not Constitutional crises,” he said.

Ultimately, the free-speech argument may be disingenuous. Claypoole speculated that Facebook is less interested in protecting minors' rights than in avoiding the expense of creating a system that would treat one set of its users - those under 18 in the U.S. - differently than others.

In what is likely to become the next privacy controversy for Facebook, the social-media giant is working with a big-data firm to correlate off-line purchases with ad views on Facebook.

And, surprise, opting out is trickier than Facebook’s typically difficult procedures.

The data aggregator is Datalogix, which claims to have information about consumer transactions worth $1 trillion and about almost every U.S. household. Most of that data comes from retailer loyalty-card programs, and includes hashed email addresses and phone numbers, and purchases linked to those accounts, according to a report issued by the nonprofit privacy-advocacy group Electronic Frontier Foundation.

The EFF report didn't make clear how long Facebook has had access to the data, which will help Facebook understand how ads on the social network impact real-world purchases. Being able to do so would make the social network more popular with advertisers.

Execs at Facebook told the foundation said that Facebook is after group patterns, and isn't tracking any individuals' purchases. Facebook also will disregard information not linked to one of its participants, according to the foundation. We've asked Facebook and Datalogix for comment and will update this post as soon as we hear back from them.

The foundation report says that if you're on Facebook, you are automatically in this data-sharing arrangement. There is no mention of this program on Facebook.com.

How To Opt Out

Opting out requires you to go to the Datalogix privacy page, which means that even most Facebook privacy-philes won’t know about the program.

At the privacy page, scroll down to the “Choice” section and click on the link in the last sentence of the paragraph that gives you the option to “opt out of all Datalogix-enabled advertising & analytic products.”

You will be prompted to enter your name, address and email address. Datalogix says people will be out of the program within 30 days.