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Top Ten SOCIAL Media Stories of 2010

Since MySpace’s founding in 2002, social networking sites have changed quite a bit. Through the rise and development of more and more networks–MySpace, Facebook, Twitter, and beyond–we have seen time and time again that social media is a constantly evolving entity, one that’s difficult to pin down easily. 2009 was no different. From the enormous valuations and market-changing acquisitions down to the small ways in which social networking is affecting our lives, 2009 rocked the social Web. Here we look at the ten biggest social media stories of the year.

1. Twitter valuation at $1 billion

In case you missed it, Twitter blew up this year. It was just a small sign of things to come when the site noted 5x normal tweets per second on Inauguration Day on January 20th. For the first half of the year, the micro-blogging service experienced a rocket-ship trajectory. Twitter received so much media attention that in June it was calculated that the site had received $48 million in free media coverage. Growth of the site reached such incredible heights in the first six months that CEO Evan Williams had to assure everybody that the growth plateau in the second half of 2009 was only temporary. The Twitter noise may have reached the peak of its crescendo in September, when, in anticipation of the startup’s closing of a $100 million Series D funding round, rumors swirled that investors valued the company at $1 billion. On top of everything else, the Global Language Monitor named “Twitter” the top word of 2009:

“In a year dominated by world-shaking political events, a pandemic, the after effects of a financial tsunami and the death of a revered pop icon, the word Twitter stands above all the other words,” said a Global Language Monitor spokesperson.

2. Facebook buys FriendFeed

Facebook goes cash-flow positive (September). Facebook hits 300 million users (also September). Facebook shares rise 42% in four months (November). Facebook hits 350 million users (December). There were a lot of notable Facebook stories this year and most of them simply reiterated the same thing in different words: “Facebook is still growing. A lot.” One story, however, underscores how Facebook is becoming a notable and viable acquirer. In August, Facebook made a combined $15 million cash and $32.5 million stock purchase of microblogging site FriendFeed. To the dismay of FriendFeed fans, Facebook was motivated simply to purchase the staff behind the technology at FriendFeed, leaving the service to see no future development. Though we have not yet seen any tangible results from FriendFeed developers moving over to Facebook, for now we can only assume that they are working on something awesome.

3. EA acquires Playfish for $275 million

As the Web continues to evolve, it seems like social media is changing the way we do just about everything. The video game industry, which for years has pushed towards the biggest, loudest, most powerful consoles yet, got a bit of a wake-up call in early November when Electronic Arts, one of the world’s largest third-party game publishers, paid $275 million in cash for a little social gaming company called Playfish. If Playfish meets certain criteria by the end of 2011, Playfish’s former owners could receive another $100 million. That’s a lot of money for a company that designs poker and restaurant games, free games that collect revenue via the sale of virtual goods, solely for social networking sites like Facebook. EA foresees mobile and online games will continue to make up more and more of the gaming industry in 2010. In attracting one of the most well-known game publishers and in reaching nearly 60 million monthly active users worldwide, Playfish is proving that social games like Pet Society, Restaurant City, and Country Story are here to stay.

4. Zynga worth $1 billion

A couple of weeks after EA’s acquisition of Playfish, speculation arose that Zynga – a Playfish competitor and the leading social gaming company today – was worth about $1 billion, since EA paid 3-4 times the revenue generated by Playfish. With incredibly popular games like Mafia Wars and FarmVille, Zynga sees 100 million monthly unique visitors and has registered over 200 million active users. FarmVille, the most popular social networking game ever with almost 75 million monthly active users, has been expanded by Zynga to a stand-alone site, where users sign in with Facebook Connect. Despite some controversy over scam offers made via advertising in Zynga games, which the company has since made efforts to diminish, Zynga is yet another example of social gaming on the rise. [Note: Zynga CEO Mark Pincus is presenting a keynote at Vator Splash on February, 4, 2010 in San Francisco. Mark your calendars.]

5. MySpace acquires iLike for $20 million

ILike’s sale to MySpace underscores that it’s a hit or miss world out there. While iLike had significant traffic of some 55 million users, and had grown to be one of the most popular social music discovery services with applications on Facebook, Orkut, hi5 and Bebo, it only fetched $20 million in a buyout by MySpace. The sales price puts iLike in a stark juxtaposition to Zynga – which is estimated to be worth $1 billion, and underscores the uncertainty of a startup’s future and exit when there is no monetization plan in sight. While iLike appeared to be on the road to greatness with its 55 million users, its exit valuation clearly signaled that unless a company knows how to monetize its users, the market won’t pay up.

6. MOL acquires Friendster

Friendster, the first mover and pioneer of social networks, made the last big social media news of the year (unless something else happens in the next two weeks) by being acquired by MOL Global, a Malaysian online payments company. Though financial details have not been disclosed, there are estimates that MOL paid up to $100 million in the deal. Though you may have forgotten all about Friendster, the 2002-founded social network is still huge in Asia, where it has 75 million registered users–90% of the entire site’s membership. Having raised just over $45 million since its founding as the original social network, this Silicon Valley darling may have led us to expect more from its exit. Nevertheless, MOL, already having implemented various payment systems into Friendster, will certainly enjoy the benefits of owning the actual network.

7. Citizen Journalism

When that US airways plane crash landed into the Hudson River in January, Twitter was the first one to let us know. And in June, when masses of demonstrators took to the streets of Tehran to express anger at a questionable presidential election in Iran, we only heard the dissent’s oft-censored voice because its community managed to find ways onto social networking sites like Facebook and Twitter. We can only guess at how many people first heard about Michael Jackson’s death through a status update. As social sites grow in popularity, they become more powerful hubs of communication, and so it is only natural that in 2009 we experienced the rise of a new era of citizen journalism. YouTube even launched a Reporters’ Center to teach the basics on reporting the news. While there have been some less pretty side effects (like businesses jumping on trends for free advertising or uninformed “reporters” kindling false rumors), citizen journalism has the awesome potential to give a lot of power back to the people. Why else would censorship-heavy countries like China be so preoccupied with blocking social networking sites?

8. The Rise of Augmented Reality

Smartphones are very powerful devices. So powerful, in fact, that the tech industry has coined a phrase, “augmented reality,” to refer to an emerging form of reality, made accessible, supplemented, and molded by mobile applications. Aloqa, for example, notifies you through your mobile device of nearby hotspots, Facebook friends, or interesting events. Gowalla, which raised $8.3 million this year, is another location-based social networking service all about sharing and discovering new and interesting places in the world. Similarly, Aha Mobile informs users about traffic conditions in real-time. Probably the most popular augmented reality app is Foursquare, an application available for iPhone, Android, and other devices that has slowly been building a dedicated community of users obsessed with finding and sharing the coolest locations within cities. These technologies, just now emerging, signal the start of a new era of mobile social media.

9. Google + Bing go real-time

If you still think Twitter and other social sharing sites are just noise, then you’ll have to explain why Bing and Google are all about incorporating real-time in search results. Bing went there first, creating a branch off its main search engine called Bing Twitter, where users can search the Web via Twitter’s real-time updates. But Google took it one step further when it announced last week that relevant real-time updates would be implemented directly into Google search results. Not only that, but while the page remains open, the stream will automatically update in real-time. Coupled with an October update which includes forum posts in search results, these updates show just important user-generated content has become.

10. US Government 2.0

Partisan politics aside, we can probably all agree that the current administration’s ability to take full advantage of social media capabilities is a good thing. From Facebook to Twitter, President Obama’s fleet of advisers and assistants have created profiles to keep the public constantly updated about the goings-on at the White House. Videos on YouTube and Vimeo of presidential speeches, photos of meetings between diplomats, and a constant stream of executive updates made available across multiple sites may have made this administration the most accessible that it has ever been. Similarly, the US Army has gone to great lengths setting up multiple accounts across all the most popular social networking sites in order to get the most direct access with possible recruits. On the other hand, troops have had to deal with mixed and confused orders over the use of social networking while serving, as policies teetered constantly between full access and an all-out ban. Still, the government’s embrace of social media is just one more sign (as if we needed more) of the massively growing influence of online networking.

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How to survive in 2010

2009 was a banner year for social media. Fueled in large part by the impressive growth of Twitter and Facebook and the adoption of both by major brands and recognizable individuals, it’s safe to say that social media truly went ‘mainstream’ this year.

That means new opportunities, and new challenges, in 2010 as social media finds its place in the overall mediasphere. Here are five tips for companies looking to take their social media efforts to the next level in 2010.

Get creative. Just being on Facebook and Twitter isn’t enough. As social media matures, companies will need to do more to stand out and stay relevant. That means going beyond “We’re on [site name]” to “We’re using [site name] to do x, y and z” and developing strategies relevant to those objectives.
Bring on the right people. Many companies have relied on outside social media consultants and agencies (and unfortunately a few gurus) to help them get started with social media. That can work in the beginning but it’s hard to be truly ‘social’ and ‘authentic’ when somebody who isn’t part of your company is managing your social media presence. For companies that see social media as a long-term must, it’s time to consider building a competent in-house team that focuses, in whole or in large part, on social media.
Make measurement a priority. 2009 was the year that many companies really got involved with social media in a big way, or at least became far more comfortable with it. Now that initial experimentation is out of the way and social media is more than a new toy, measuring what social media delivers should be a priority. In other words, this is the year to face the social media ROI issue head on.
Specialize. Right now, the majority of companies I see have what I’d call a broad social media strategy. They have a presence on most of the popular sites, but depth is lacking. In 2010, companies should determine which platforms are best-suited to their needs and consider jettisoning those that are being used just for the sake of using them.
Prepare for the end of the honeymoon. If you’re serious about social media, you’re serious about turning it into something sustainable. At some point, the media honeymoon will be over and novelty alone won’t attract the attention it often does today. That means companies should start thinking less about how they’re going to get into relationships with consumers via social media and more about how they’re going to foster long-term relationships.

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Can social-media tools, such as Twitter, help me with my investing?

The growth of the Internet and social-media tools, such as Facebook and Twitter, means advice is never hard to come by. However, the quality of that advice — and the adviser — should be researched thoroughly before making any financial decisions. Members of the Financial Planning Association of Greater Indiana may be able to advise you on this and other financial matters. Visit its Web site at http://www.fpagrindiana.org.
Charlotte Lippert, Bedel Financial Consulting
With regard to your investments, you should be very discerning about the advice you heed. This applies to the opinions you are exposed to at a holiday party, from the television, on the Internet, or through the use of Twitter.

The Internet can provide you with loads of data in mere seconds. With increased participation from trustworthy sources, it has become a great tool for obtaining quick and reasonably accurate information.
Now, social-media tools provide new avenues to reach out and be heard. However, most of what is out there is just “noise” and could be misleading.
For example, earlier this decade, stock message boards were intended to be a way to gain new insight about a company’s stock. In 1999 and 2000, they also provided the vehicle for a 15-year-old boy to commit securities fraud.
According to The New York Times, a teen named Jonathon Ledbed posted multiple recommendations for stocks with low trading volumes. When others bought the stocks based on his advice, he dumped his shares, netting at least a quarter of a million dollars in profit.
With regard to investing and advice, it is best to ask yourself the following questions: Is this information from a reputable source? Is the person or source providing the advice being paid by you? Do they have your best interests in mind? If the answers are “no,” then it’s likely not of great value to you.
Chad Stevens, Westpoint Financial Group
The world of information available to us today is astonishing.
We have investment advisers, business magazines, financial news sites, well-known Web sites, and now Twitter. This is the new thing.
Be forewarned, however, that just because a person goes by the name “Best Financial Planner in the World,” that does not mean it is true, nor does is mean that the person you are following or “tweeting” has the credentials or the licensing to give advice.
Whether online or in person, always ask if the person is licensed and has a professional designation, such as CFP, ChFC or CLU. Also, check their backgrounds. Check for years of experience and verify it via a company Web site.

One more caution: If the information you are getting is considered “insider trading,” which is nonpublic information that has been disseminated via an employee of the company, you could be subject to fines.
Twitter can be a good way to research a stock and get hints. If a tweeter is guiding you to other credible Web sites, it might be a good resource.
I would encourage you not to act solely on a “tweet” when picking your next investment. Meet with a financial adviser, who will learn about your specific situation and make recommendations.
The information provided is intended to be educational only and is not written or intended as specific tax or investment advice and may not be relied on for purposes of avoiding any federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax counsel. Chad Stevens is a registered representative of MML Investors Services Inc., member SIPC.
Jeffrey B. Sturgis, Brightstone Advisors
There is a Latin phrase that comes to mind when discussions of the Internet and social media take place. It is caveat emptor, or “let the buyer beware.”
Those who seek investment advice from Twitter, Facebook and the Internet in general should keep this phrase in mind. Thanks to recent advances in technology, answers and advice are just a few mouse clicks away. Although access to abundant information is helpful, it is the quality of the information that still matters most.
The best advice and counsel is rarely generic in nature. Advice and counsel that takes into consideration your unique and specific set of circumstances will deliver the most value to you.
One size does not fit all when your money and investments are at stake. That is why the best advice and counsel will be found from a competent and experienced professional with an integral knowledge and understanding of you and your specific situation.

The chance of finding this kind of advice on Twitter, Facebook or the Internet is very unlikely, but, I suppose, not impossible.
If you are brave and can mitigate the risks that accompany social-media tools, it is not unreasonable to still expect any adviser to put your interests first — including advisers found on Twitter.
You should ask early on for their professional designations and the code of ethics they follow. If the vetting of their credentials discloses no reason for concern, there is no reason not to continue.
After all, centuries ago, Latin had a phrase for that, too — audaces fortuna iuvat — which means “fortune favors the bold.”

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