Software, Interrupted

Nielsen is out with a new report on media consumption by teens and the results are counter-intuitive to what we commonly believe to be the norm. According to the How Teens Use Media report (PDF), "teens exhibit media habits that are more similar to the total population than not."

Key takeaways from the report:

• Teens are not abandoning TV for new media: In fact, they watch more TV than ever, up 6 percent over the past five years in the U.S.
• Teens love the Internet, but spend far less time browsing than adults: Teens spend 11 hours and 32 minutes per month online. Far below the average of 29 hours and 15 minutes.
• Teens watch less online video than most adults, but the ads are highly engaging to them: Teens spend 35 percent less time watching online video than adults 25-34, but recall ads better when watching TV shows online than they do on television.
• Teens read newspapers, listen to the radio, and even like advertising more than most: Teens who recall TV ads are 44 percent more likely to say they liked the ad.
• Teens play video games, but their tastes aren't all for the blood-and-guts style games. Just two of their top five most-anticipated games since 2005 have been rated "Mature."
• Teens' favorite TV shows, top Web sites and genre preferences across media are mostly the same as their parents: For U.S. teens, American Idol was the top show in 2008, Google the top website and general dramas are a preferred TV genre for teens around the world.

One of the more interesting findings from the report is the realization that today's teens are not uniquely wired, but are an "artifact of larger, demographically broader shifts in media behavior. Teens are wildly different--not from other consumers today, but from teens of generations past."

Follow me on Twitter @daveofdoom.

If there is one way to win me over, (take note PR flacks) it's through Dunkin' Donuts and the delicious DD coffee. While I was on the East Coast two weeks ago, I drank so much DD coffee in the first two days, I couldn't sleep for the next two days.

So, when I saw that the company launched a new "Dunkin' Run" iPhone application today, I bought the shiny new Apple product. But then I was dismayed to learn that Dunkin' is not in the San Francisco Bay Area (or really west of the Mississippi.)

Dunkin Run is basically a social game, with a payoff of coffee and baked goods. Users can start a "Dunkin' Run" from their computer, mobile device, or iPhone, and let everyone know they are hitting the road. This type of application that comes with a tangible payoff would drive membership in a variety of social networks, and would certainly keep me logged into my otherwise useless Facebook profile.

Dunkin' Run brings customers a completely new and unique social online group ordering experience and tools. To begin, "Runners" can initiate a group order on www.DunkinRun.com through their computer or mobile device, or via an iPhone application available for free download at the iTunes online store. Immediately, interactive alerts are sent to the Runner's list of friends or co-workers, telling them when a trip to Dunkin' Donuts is planned along with a personal message inviting them to place an order online. Invitees can view the Dunkin' Donuts menu to place their order, and registered users can select from their own personal list of favorites and/or previous orders. All Dunkin' Donuts core foods and beverages are presented using interactive product images to make personalizing an order both simple and fun.

All of the orders are integrated onto a single page/screen which the Runner either prints or uses their iPhone or mobile device to bring to any Dunkin' Donuts store. Dunkin' Donuts crew members will use this checklist to fulfill orders quickly and ensure order accuracy. The Runner can also use this page as a checklist to ensure that everyone in the group gets what he or she ordered.

My coffee addiction aside, this is actually a great idea and I'm surprised more takeout places and coffee shops haven't gone down this path yet. The obvious next step is a receipt generator to see who's not paying their share so you can humiliate them across your social network.

Follow me on Twitter @daveofdoom.

Some interesting data from Nielsen suggests that Twitter, despite the hype and meteoric growth, appears to have a user loyalty problem, an issue not suffered by Facebook or MySpace, the two behemoths of social networking.

Considering the viral nature of Twitter, I was a bit surprised to see that users weren't more loyal. On the other hand, sites like Facebook and MySpace offer a lot more functions that facilitate communication on many levels, not just through messaging.

Currently, more than 60 percent of Twitter users fail to return the following month, or in other words, Twitter's audience retention rate, or the percentage of a given month's users who come back the following month, is currently about 40 percent. For most of the past 12 months, pre-Oprah, Twitter has languished below 30 percent retention.

Is this Twitter's Achilles' heel, where there aren't enough reasons to come back to the service, or, is audience retention naturally lower because Twitter only offers one thing to do in comparison to the other services?

The chart below shows that MySpace and Facebook both had higher loyalty levels at the same reach.

I think it's an easy argument in Twitter's favor that it has significant reach with significantly fewer features than the comparative sites. Of course, loyalty matters a great deal if and when the company ever decides to monetize the user base.

Interesting new data from Nielsen Online says "member communities" (e.g., social networks and blogs have become more popular than e-mail.

While the data does not show a dramatic difference between member communities and e-mail use, in terms of percentage points, it does reflect an impact that social communication is having on the way we work and communicate.

Of course, the other side of the equation is finding out how the sample data was taken and if it's based only on consumer data. Nonetheless, it shows that information is moving online, not getting stuck in e-mail boxes.

Another interesting statistic is the fact that 85 percent of those surveyed use search tools, showing once again that the data structure of the Web still has a long way to go. That stat should also bring comfort to Google shareholders.

Facebook delayed a plan to let employees sell some of their stock. The plan seemed like a big win for the employees there but with the recession underway and no clear liquidity event in sight, I can't see why or how the company could move forward.

VentureBeat got the low-down:

The global economy is in the midst of an incredibly difficult period, and all companies have been affected in some way. After carefully considering the current environment, we've decided to establish an open-ended timetable for an employee stock sale program. Despite the turbulence in the financial markets and resulting challenges, we believe the company is very well positioned to handle this economic downturn. We have the means to go after big opportunities that will help solidify our position as the platform that everyone uses to share while building a fundamentally strong business.

I could never make sense of how Facebook was going to cash out employees of their stock options. Valuations are too variable and unless the payout were to occur at the exact moment of a financing event it seemed too good to be true--especially considering the hefty Microsoft valuation of $15 billion versus the internal valuation of $4 billion.

I certainly hope that the staff over there get some money out ASAP.

Facebook moved further into virtual-good sales on Monday, with a micropayment platform that's no longer tied to the dollar, but rather points that can be purchased and earned.

This is a common enough scenario in virtual worlds and online games such as MapleStory, but the gamelike metaphor that this brings to social networking may introduce confusion and annoyance to the users who have made Facebook such a powerful force.

With more than 120 million users, perhaps a better move would be to start offering subscriptions. Personally, I would pay to NOT get certain invitations or for the simple function of not being forced to use the craptacular Facebook e-mail, especially considering that Facebook already has my address.

Slate's Farhad Manjoo lays out some logic behind a subscription model:

100 million people use Facebook regularly. Judging from some of the folks in my social network, a sizable minority of Facebook users have hundreds of "friends" and check into the site multiple times a day--call them superactive users.

Let's imagine that Facebook became a tiered service. A free plan would limit you to 200 friends, one status update per day, or some other nondraconian combination of restrictions. But for $5 a month, the limits would be lifted.

Certainly, many users would balk; tens of thousands would join Facebook groups to protest the new pay model. Let's assume that 95 percent of users will refuse to pay a dime. That still leaves 5 percent, or 5 million people, to pay $60 a year. That's $300 million in the bank.

I am a fan of virtual goods. I like the direct analogy of dollars equaling goods, even if they are not physical. I also think that they can provide a great revenue stream, when offered in the right environs.

Facebook definitely is the right place, but this new system doesn't make total sense. A micropayment system obscures the amount paid for the virtual good, and the true value becomes unknowable and therefore diminished.

For example, consider a dating site where someone can gift you a red rose for $10 or a daisy for $1. There is a clearly established value (and message where you communicate how much they are worth to you). Contrast that with a virtual gift that you earned from completing a puzzle. The gift may be the same, but the value is diminished, and the recipient may not be as thrilled.

It's hard to believe that with all that traffic, Facebook still hasn't figured out more revenue mechanisms. And the ecosystem seems to be faltering a bit as the company usurps applications and doesn't deliver on things like a payment platform, on which others can generate revenue and Facebook takes a cut.

A subscription offering wouldn't necessarily hurt traffic, and it would undoubtedly increase revenue. If we learned anything from the dot-com crash, it was that eyeballs don't equal dollars. Facebook needs to capitalize now, before it becomes a true utility with a diminished value.

I spent some time this morning with Rob Frasca, CEO, Viximo, a virtual goods provider. Virtual goods have been growing both in adoption and in relative importance versus advertising, especially in the down economy. Facebook appears to have done $34.5 million in virtual goods revenue this year--primarily in the form of gifting.

Viximo has two main revenue streams: digital gifting and branded virtual goods. They provide a turnkey solution to sites who want to offer virtual goods or gifts. The user comes in and buys credits and can use them as they would any other giftcard. Viximo splits the revenue with the publisher and the artist.

The basic premise for virtual good sales is that they are bite-sized and therefore people are more willing to make small purchases instead of large purchases; ie. you'll buy a candy bar but not a car.

Rob called this approach "snack food" which appeals to the new generation of"digital natives", people who have far more communication with online/connected friends then they do with people in real life.

According to Rob, there is an ongoing demand for content and Viximo has created a community of creators they call "Digital DaVincis" in order to create a self-generated marketplace. They've also found that companies are willing to pay to have their brands on items that are extremely targeted and make them part of the social dynamic. The ability to brand a gift is not considered advertising but more akin to a status symbol.

The customer base is anyone that runs a socially oriented website. Big and little--it could be Yahoo IM or a coffee shop that has a community. There is a monetization opportunity for virtual goods in any socially aware environment. And the theory is that most sites won't try and do this themselves due to the inherent technology and billing complexity.

Overall, Viximo appears to be a pioneer in the market. Basically, they have the supply of goods and if there is demand then they stand to profit. And while the company's success is predicated on continued sociailly-oriented online behavior, so it is for Facebook, MySpace and so on.

Note: The cupcake pictured is used with permission and looks delicious.

You have to admire the guile (stupidity?) of a company has already faced so much anti-trust heat and still do crazy things like this. Essentially, Microsoft is saying that the contacts that users put into MSN messenger belong to MS, not the user. And if that user wants to import those contacts to a social networking site, the site should pay them. Bizarre and stupid.

The problem typically arises when a social network, say, offers its users the ability to import the list of contacts they've accumulated on Microsoft Hotmail.

Since the summer, my friends tell me, Mister Softie has been sending cease-and-desist letters to startups that try to do this. These nastygrams are typically followed up by a meeting with Microsoft reps, who then try a couple different approaches to get the startup to integrate Messenger into their service.

If the company wants to offer other IM services (from Yahoo, Google or AOL, say), Messenger must get top billing. And if the startup wants to offer any other IM service, it must pay Microsoft 25 cents a user per year for a site license.

More on the attempt to squelch the growth of the internet via the full post on Fortune's Techland Blog

Jose over at JasperSoft sent me this video that visualizes the nonsense that is the valley. I can't wait until I'm rich and I don't have to pay attention anymore

In case the video doesn't start automatically here is the link http://www.youtube.com/watch?v=fi4fzvQ6I-o