Facebook shares break $45 for first time since 2012 IPO

SAN FRANCISCO (Reuters) - Shares of Facebook Inc rose more than 3 percent to a new high Wednesday, valuing the world's No. 1 social network at $106 billion, as investors focused on its recent mobile advertising advances ahead of a speech by its chief executive.

The stock touched $45 at 1:50 p.m. ET and briefly hit $45.07 shortly after 2 p.m. on the Nasdaq - highs not seen since May 18, 2012, the day of Facebook's initial public offering. It closed at $45.04.

CEO Mark Zuckerberg is expected to speak later Wednesday at the Techcrunch Disrupt conference in San Francisco.

JMP Securities analyst Ronald Josey said investors expect Zuckerberg to discuss future video ad products as well as plans to make money from its Instagram unit. The mobile photo app, acquired in 2012 by Facebook, is popular with young people but does not carry any advertising.

The stock's new intraday high is the latest milestone in its year-long recovery from fears that Facebook would struggle to make money from mobile users at a time when young people go online mostly through their smartphones.

The sentiment changed completely on July 24 when Facebook said its mobile advertising revenue grew 75 percent in the second quarter, trouncing analyst targets and delivering the company's strongest revenue growth since the third quarter of 2011.

The stock has risen 67 percent since then.

"The second quarter was the turning point when a lot of their work over the last year with the newsfeed came through," Josey said, referring to the format of Facebook updates that also carry mobile ads.

"Mobile is very hard to get audience at scale and Facebook is proving that it's one of those places where advertisers can go to reach eyeballs."

Facebook has said it expects sales and user growth for its mobile apps to outpace its desktop website.

Facebook options also traded heavily on Wednesday.

A total of 317,000 calls and 131,000 puts in Facebook changed hands on Wednesday, above its recent combined daily average of 355,000 contracts, according to options analytics firm Trade Alert.

The weekly $45 strike calls expiring this Friday as well as the September $44 and October $45 strike calls are among the busiest options.

"But one play in the options market appears to be making a 'cheap' bet that the recent run higher is overdone," said WhatsTrading.com options strategist Frederic Ruffy.

The top trade on Facebook on Wednesday was a 10,250-lot of September $39 strike puts, which were bought for 7 cents per contract as a new position. The contract, which is out-of-the-money, expires at the end of next week and would be profitable if shares fall below $38.93, Ruffy said.

Mark Zuckerberg has enlisted Samsung Electronics Co Ltd, Qualcomm Inc and other technology companies to help him in a project aimed at making Internet access affordable for the 5 billion people around the world who are not online.

Facebook Inc CEO Mark Zuckerberg has enlisted Samsung Electronics Co Ltd, Qualcomm Inc and other technology companies to help him in a project aimed at making Internet access affordable for the 5 billion people around the world who are not online.

The group, called internet.org, is the latest effort by an Internet company to seek to expand Web access to emerging economies. It follows a similar thrust by Facebook rival Google Inc, which uses everything from balloons to fiber connections to expand connectivity.

While short on specifics, Zuckerberg's group intends to explore everything from lower-cost smartphones and providing Internet access to underserved communities, to working out ways to reduce the amount of data downloads required to run mobile Internet applications such as Facebook.

Zuckerberg did not give an estimate on how much it would cost to connect the world's population to the Internet.

He said the key is to cut network operators' costs for providing data services so they can in turn lower the prices charged to consumers.

The 29-year-old who founded Facebook in his university dorm room said in a 10-page document released on Wednesday that he hopes the efficiency of data delivery will improve 100-fold in the next five to ten years.

Keith Mallinson, a longtime telecom industry analyst, said that while the concepts and technologies Zuckerberg cites could be viable, the commercial interests of big companies and government politics could create bigger obstacles.

"There has to be a lot of heavy lifting to make all these things happen and to coordinate them," said Mallinson, who founded research firm WiseHarbour.

While 2.7 billion people are already online, the number is increasing by less than 9 percent annually, a rate that Zuckerberg said was too slow. Two-thirds of the world's population still has no Internet access.

While many of today's Facebook members use the service just to keep in touch with friends, Zuckerberg said future Internet users may have more lofty needs.

"They're going to use it to decide what kind of governments they want, get access to healthcare for the first time ever, connect with family hundreds of miles away that they haven't seen in decades," he told CNN's "New Day" show on Wednesday.

NOT JUST MONEY

The world's largest social network with 1 billion-plus members, Facebook once harbored ambitions of becoming an all-encompassing Web destination with everything from searches to messaging and shopping, analysts say. But a succession of forays into new areas, such as its "Home" interface for smartphones, fizzled.

Zuckerberg said in the CNN interview that internet.org was for now a "rough plan." He said the project was not just about making money for Facebook, which needs to keep expanding to boost revenue.

He noted that the first billion Facebook members "have way more money" than the rest of the world combined.

Facebook recently surprised Wall Street by reporting stronger-than-expected quarterly results, helped by an increase in advertising revenue from mobile users.

The earnings report was a much-needed boost for the company, which has struggled to regain credibility after a rocky initial public offering in May 2012. It remains under pressure to sustain its high growth rate by expanding into new markets.

Besides Facebook, other players in internet.org include Ericsson, MediaTek Inc, Nokia and Opera Software ASA.

While the list did not include mobile network operators, Zuckerberg said these companies would play a central role.

For example, he suggested improvements such as new antenna technology and data-caching, new types of partnerships and better use of wireless airwaves, which are typically auctioned to carriers for billions of dollars in government sales.

He also suggested that linking consumers' Facebook accounts with carriers could provide operators more consumer data.

Analyst Mallinson said it may be difficult to get governments to change their policies on spectrum but suggested that Internet and telecom companies could change how they do business.

For example, Internet firms like Facebook and Google, which do not have to build or maintain vast public networks that carry Internet traffic, could pass some advertising revenue on to carriers that spend billions of dollars on networks to help reduce data prices for consumers, he said.

Google has spent hundreds of millions of dollars on fledgling network projects such as local high-speed fiber networks. But it now depends almost completely on traditional telecom companies to deliver its services to consumers.

In June, Google announced a small network of balloons over the Southern Hemisphere in an experiment it hopes to use to bring reliable Internet access to remote regions.

The pilot program, Project Loon, took off from New Zealand's South Island, using solar-powered, high-altitude balloons that ride the wind about 12.5 miles, or twice as high as airplanes, above the ground.

(Reporting by Sinead Carew in New York, and Ashutosh Pandey and Krithika Krishnamurthy in Bangalore; editing by Maureen Bavdek and Matthew Lewis)

After 15 months,Facebook price is same as IPO

News for facebook price Facebook's soaring stock closes above $38 IPO price The Guardian - 5 days ago Shares gain 56 cents to finish at highest closing price since end of its first day of trading in May 2012.

$0.99 facebook phone

It's never a good sign when a cellphone company lowers the price of a cellphone so soon after its release, which makes the new, very low $0.99 price of HTC's so-called Facebook phone so very foreboding. It's only been a little over the month since the HTC One's debut at $99 — with a two-year AT&T contract. The new 99-percent discount suggests (or perhaps even confirms) that the social-media centric gadget, hyped by Mark Zuckerberg himself as an exclusive partnership in a rollout of his Facebook-first operating system, isn't selling too well. After all, Nokia slashed its Lumia 900 in half after a little over three months of struggling sales , and it looks like a similar thing may be happening to HTC, despite the Facebook marketing surge — overcrowded airplanes and all. One analyst said his local AT&T store had sold zero Facebook phones. And an Examiner survey of 20 stores found that the HTC One was selling "well," but not as well as the Samsung Galaxy S IV.

RELATED: An Early Version of Facebook Home Is Out in the Wild

It's not too surprising the HTC One hasn't exactly flown off shelves, and not just because it's a mid-level phone in a Galaxy and iPhone universe. Reviewers found the first Facebook phone addictive but refused to recommend it to anyone who wasn't a Facebook "addict," whatever that means. I liked the phone itself after trying it for a week, just not the Facebook-as-a-home-screen part of it. Plus, the best part of Facebook's new mobile OS — Chat Heads — is available through the social network's Messenger app, on all Android phones, without having to buy a brand-new device. Perhaps there just aren't that many actual Facebook addicts out there? Or maybe they're all so cheap (read: young) that a price cut can lure them in.

Facebook built "Home" app to take over the smartphone from Gooogle

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  Reuters/Reuters - Mark Zuckerberg, Facebook's co-founder and chief executive speaks during a Facebook press event in Menlo Park, California, April 4, 2013. REUTERS/Robert Galbraith

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•  Article: Facebook unveils "chat heads" messaging tool for mobile phones
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•  Article: First phones with Facebook's "Home" will be exclusive to AT&T
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By Gerry Shih

MENLO PARK, California (Reuters) - Facebook Inc on Thursday unveiled its most ambitious attempt yet to enter mobile computing without a phone of its own, introducing a new app that replaces the home screen on some Android smartphones.

Called "Home," the new software lets users comprehensively modify Android, the popular mobile operating system developed by Google, to prominently display their Facebook newsfeed and messages on the home screens of a wide range of devices - while hiding other apps.

"Why do we need to go into those apps in the first place to see what's going on with those we care about?" Facebook Chief Executive Mark Zuckerberg told the hundreds of reporters and industry executives gathered at the company's Menlo Park campus.

"We want to bring all this content to the front."

The "Home" software will be available for download for free fromGoogle Play starting April 12. In addition, AT&T Inc has exclusive rights to sell for $100 the first handsets, made by Taiwan's HTC Corp, that come pre-installed with the software starting the same day. France Telecom's Orange will be offering the phone in Europe.

Shares in Facebook finished trading up 82 cents, or 3.1 percent, at $27.07; Google stock closed at $795.07, down $11.13 or 1.38 percent.

Analysts say should the new software take off, it may begin to draw users away from Google services. Offering Facebook messaging, social networking and photos on the very first screen that Android users see could divert attention from the panoply of services, such as search and email, which generate advertising revue for Google.

Instead of traditional wallpaper or a "lock screen," users with Home installed will see a new Facebook "cover feed" that displays a rolling ticker-tape of photos, status updates - and eventually, ads - from Facebook's network.

Facebook's executives, acknowledging that messaging and communications remain the most fundamental use for smartphones, also showed off a new "chat heads" messaging interface, which would combine SMS text messages and Facebook chat messages under one tool.

"On one level, this is just next mobile version of Facebook," Zuckerberg said. "At a deeper level, this can start to be a change in the relationship with how we use these computing devices."

People who used the software and the HTC phone on Thursday appeared impressed by the highly visual design and interface that featured a multitude of pictures. But analysts say the jury is still out on whether Home has appeal beyond habitual Facebook users.

Some were skeptical consumers would leap at the chance to make Facebook so central to their lives.

"Facebook thinks it's more important to people than it actually is," said Charles Golvin, an analyst at Forrester Research.

Golvin said that in markets like Spain and Brazil, mobile users spend far more time in messaging apps like Whatsapp compared to the Facebook app.

"For the vast majority of people, Facebook just isn't the be-all and end-all of their mobile experience. It's just one part," he said. "I see a more apathetic response among Facebook users than Facebook might be expecting."

COMPETITION WITH GOOGLE

Facebook's wide-reaching mobile strategy could heighten its competition with Google, the dominant Internet search engine and the developer of Android with whom it is locked in a battle for Internet users' time online and for advertising dollars. But if it proves to be popular among Android users, Home could also place the two companies in something of an uneasy partnership.

More than 750 million mobile devices featuring Android have been activated to date, according to Google, more than gadgets based on Apple Inc's iOS, the runner-up.

Zuckerberg downplayed the rivalry even as he praised Google's willingness to let other companies tinker with Android. He said he was confident Google would not make changes to Android that would hamstring Facebook.

"If 20 percent of time people are spending on their phones is in Home, I really think they're going to have a hard time making a rational decision" to limit Home's functionality, Zuckerberg told reporters.

Google issued a neutral statement, saying the new phone demonstrated Android's openness.

"The Android platform has spurred the development of hundreds of different types of devices," the company said. "This latest device demonstrates the openness and flexibility that has made Android so popular."

Not everyone is sure that Google will remain neutral.

"Google has made Android open, but as they release the next version, are they going to be as open?" said Simon Mansell, the chief executive of TBG Digital, an advertising technology provider. "Facebook is hiding all the Google stuff with their own stuff, and how Google will respond is interesting."

For Facebook - founded in Zuckerberg's dorm room in 2004 as a website - bolstering its mobile presence is critical. Nearly 70 percent of Facebook members used mobile devices such as smartphones and tablets to access its service at the end of 2012, and 157 million of Facebook's roughly 1 billion users accessed the service solely on a mobile device.

The company has stepped up efforts to ensure that its revenue-generating ads can be viewed on mobile devices and Zuckerberg has said that the company's engineers are now focused on creating "mobile-first experiences."

Zuckerberg said features like cover feed will be ad-free initially, but he envisioned advertising as another form of content that will eventually be integrated. Analysts say the company treads cautiously when introducing ads into any of its services, wary of infuriating users.

"This is about becoming more deeply embedded in the operating system on mobile devices, and creating a broader platform," said Jan Dawson, chief telecoms analyst for the research firm Ovum. "It will allow Facebook to track more of a user's behavior on devices, and present more opportunities to serve up advertising."

But "that presents the biggest obstacle to success for this experiment: Facebook's objectives and users' are once again in conflict. Users don't want more advertising or tracking, and Facebook wants to do more of both."

Reports that Facebook was developing its self-branded smartphone have appeared sporadically and Zuckerberg has shot them down, as he did again on Thursday.

But with specialized software that adds a layer on top of Android, Facebook may get many of the benefits of having its own phone without the costs and risks of actually building a hardware device, analysts said.

"It's much lower risk than developing a phone or an operating system of its own, and if it turns out not to be successful, there will be little risk or loss to Facebook," Dawson said. "If it does turn out to be successful, Facebook can build on the model further and increase the value provided in the application over time."

Facebook Graph Search

Facebook Inc's new search tool has strong potential to generate revenue for the social networking company, though it is unlikely to challenge Google Inc as the world's dominant search engine, Wall Street analysts said on Wednesday.

Facebook's "graph search" tool, rolled out on Tuesday, lets its more than 1 billion users trawl their network of friends to find everything from restaurants to movie recommendations and is the company's biggest foray into online search.

Graph search contains some category suggestions that can be easily monetized, BofA Merrill Lynch analysts said in a note.

"It should be easy to incorporate commercial search results via Facebook's partnership with Bing," they added.

Facebook currently has a partnership with Microsoft Corp, whose Bing search engine provides search results for external websites. Microsoft also integrates certain Facebook results into its Bing search results.

BofA Merrill Lynch analysts estimated Facebook could add $500 million in annual revenue if it can generate just one paid click per user per year, and raised its price target on the stock by $4 to $35.

Facebook's shares were flat at $30.10 in early trading on Wednesday. They have jumped about 50 percent since November to Tuesday's close after months of weakness following its bungled Nasdaq listing in May.

However, analysts at J.P. Morgan Securities said the lack of a timeline for the possible launch of graph search on mobile devices may weigh on the tool's prospects.

The success of the graph search, which will rely heavily on local information, depends on Facebook launching a mobile product, the analysts said. Half of all searches on mobile devices seek local information, according to Google.

Graph search also lacks the depth of review content of Yelp Inc, the analysts added.

Pivotal Research Group analyst Brian Wieser said monetization potential would be largely determined by Facebook's ability to generate a significant portion of search query share volumes and he expects that quantity to be relatively low.

"Consumers are likely to continue prioritizing other sources, i.e. Google. Advertisers would consequently only use search if they can, or are perceived to, satisfy their goals efficiently with Facebook," Wieser said.

NO GOOGLE KILLER

Analysts mostly agreed that Facebook's search tool was unlikely to challenge Google's dominance in web search at least in the near term.

"As of now, we do not see Graph Search as a threat to Google Web search. Looking forward, Facebook Graph searches could be competitive with certain categories of Google searches, such as Places and Maps," BofA Merrill said.

Internet search, social networking tools and e-commerce are among the biggest weapons that companies such as Facebook, Google and Amazon.com Inc have in their battle for supremacy. A successful combination of the three could win the day for them.

Google has been trying to combine social networking and search for more than a year by integrating Google+ into its search engine.

"Overall, Graph Search offers users a unique view to information not available on Google, but does not replace Google. We view the relationship between Facebook Graph Search and Google as both competitive and complementary," Piper Jaffray & Co analysts said.

The brokerage said users looking to buy a cellphone, for example, could search for friends' reviews on Facebook and expert reviews on Google.

Facebook is buying Microsoft Ad technology

Facebook Inc is in negotiations with Microsoft Corp about acquiring advertising technology that could allow the social network displays ads on other websites, broadly expanding its advertising business, according to media reports on Thursday.

Facebook is in "serious" discussions with Microsoft about a deal to purchase Atlas Solutions, an ad-serving product that Microsoft acquired through its $6 billion acquisition of aQuantive in 2007, according to reports in the technology blogs Business Insider and AllThingsDigital on Thursday.

The deal could allow Facebook to significantly expand its advertising business by showing ads on third-party websites, mounting a challenge to Google Inc's DoubleClick ad network, said the reports, which cited anonymous sources.

The potential price for the acquisition was unclear, though Business Insider said the highest bid for Atlas in Microsoft's previous attempts to sell the business was $30 million.

Facebook and Microsoft representatives declined to comment.

Facebook, the world's No. 1 online social network with roughly 1 billion users, has been moving aggressively to bolster its advertising business with new capabilities, including ads on mobile devices and features that demonstrate the effectiveness of its ads to marketers.

Facebook currently generates 86 percent of its revenue, which totaled roughly $1.3 billion in the third quarter, from ads that appear on its own website.

Shares of Facebook were off 1.2 percent, or 33 cents, at $27.38 in midday trading on Thursday. Microsoft shares were up 7 cents at $26.73.

Facebook Q3 mobile revenue jumps from $40 m to $150. Stock price increases 13% to $21.98

SAN FRANCISCO (Reuters) - Facebook Inc grew mobile advertising revenue several times in the third quarter, a faster-than-expected pace that helped drive shares in the world's No. 1social network nearly 13 percent higher.

Facebook said on Tuesday that it now gets 14 percent of itsadvertising revenue from mobile ads, helping to reassure investors that the social network is beginning to figure out how to earn money off smartphone and tablet users.

Mobile ad revenues totaled roughly $150 million, up from an estimated $40 million to $50 million in the second quarter and almost nothing in the first.

"This certainly dispels the most bearish view, that Facebook couldn't monetize people on phones or tablets," said Colin Sebastian, an analyst with Robert Baird & Co.

"In about a six-month period they've actually started to generate decent revenues form their mobile applications," Sebastian added, though he said Facebook still needs to show that its mobile ads can command the same rates as its traditional ads and that they can deliver results for marketers.

Mobile advertising has been among the key investor concerns hanging over Facebook, helping slash more than $40 billion off its market value since its May IPO. As its users increasingly access thesocial network with their smartphones, Facebook has struggled to transition its business to mobile devices.

The mobile ads helped reignite Facebook's overall advertising business during the third quarter, following several consecutive quarters of slowing revenue growth that raised questions about Facebook's long-term prospects.

Advertising revenue increased 36 percent to $1.09 billion, up from 28 percent growth in the second quarter. But revenue from its payments and other businesses increased just 13 percent to $176 million.

Mark Zuckerberg, the 28-year-old chief executive who created Facebook in his Harvard dorm room, said mobile was the "most misunderstood aspect" of the company and took issue with the "myth" that Facebook could not earn money on mobile.

"Over the long run we're going to see more monetization per time spent on mobile than on desktop," Zuckerberg said on a conference call with analysts on Tuesday.

The company's shares leapt nearly 13 percent to $21.97 in after-hours trading on Tuesday.

Facebook said it had crossed the 1 billion threshold for monthly active users by September 30, of which 604 million were mobile users, a gain of 61 percent from a year earlier.

The shift to mobile has challenged many of the Web industry's top companies. Google Inc is the No.1 provider of smartphone software with its Android operating system. But the company missed Wall Street's revenue targets in the third quarter, with some analysts blaming the shortfall on its increasing reliance on lower-priced mobile ads.

Social game maker Zynga Inc, which announced layoffs of 5 percent of its staff on Tuesday, has suffered as it struggles to translate its hit games to mobile devices and as the use of its games on Facebook's service declines.

NOT PLEASED WITH GAMING

Zynga's woes were visible in Facebook's results, with Facebook's payments revenue from the maker of Farmville down 20 percent year on year.

Zuckerberg said he was not pleased with revenue from gaming, but said that beyond Zynga - which accounts for 7 percent of Facebook's total revenue - the situation was brighter.

"The interesting thing is that the rest of the games ecosystem has actually been growing. Our monthly payments revenue from the rest of the ecosystem increased 40 percent over the past year, since payments has been adopted," he said.

Zuckerberg also said Instagram, the photo-sharing app that Facebook acquired for roughly $750 million this year, now has 100 million users, up from 27 million when Facebook bought the company.

Facebook posted a net loss of $59 million or 2 cents a share in the three months ended September 30 after booking a big provision for income taxes. Excluding share-based compensation and income tax adjustments, it earned 12 cents a share, a penny higher than the average analyst expectation.

Facebook Finance Chief David Ebersman said the company would continue to invest aggressively during the fourth quarter, though the company did not provide a specific financial outlook, in keeping with its previous practice.

Ebersman said that the total number of ads that Facebook delivered in the third quarter increased 27 percent year-on-year and that the average price per ad increased 7 percent.

Facebook's third-quarter mobile revenue marked a big jump from the second quarter, when Facebook said that it was generating more than $1 million a day from a new class of ads that appear in users' newsfeeds. Facebook said that roughly half of that revenue was from mobile ads, suggesting that mobile advertising revenue totaled $45 million in the second quarter.

Stifel Nicolaus analyst Jordan Rohan said that Facebook's mobile ad revenue was impressive, but said that Facebook needs to proceed carefully so as not to damage the user experience by overloading its service with too many ads.

And he said that Facebook's desktop PC advertising business appeared to have shrunk by about $40 million from the second quarter. Rohan said he would rather see the desktop ad business remain stable as the mobile ad business grows.

Facebook's third-quarter revenue of $1.26 billion was a hair above the average analyst expectation of $1.23 billion, according to Thomson Reuters I/B/E/S.

Joanna Shields,the vice president and managing director of Facebook’s Europe, Middle East and Africa operations, is leaving to become the chief executive of the Tech City Investment Organisation

Another post-IPO executive departure for Facebook, this time on the international front. Joanna Shields,the vice president and managing director of Facebook’s Europe, Middle East and Africa operations, is leaving to become the chief executive of the Tech City Investment Organisation. And in a (possibly temporary) step up for another exec, Facebook tells us that Shields’ reports will now report to Carolyn Everson, the global VP of marketing for Facebook.

Tech City is a David Cameron/Conservative government initiative to develop a technology hub in the East End of London to rival that of Silicon Valley and other major tech centers.

It looks like for now Carolyn Everson’s assumption of Shields’ reports may just be an interim measure, but it also could be a sign of her growing position at the company. Indeed, as Facebook continues to position itself for more revenue-generating activities, in some respects, the marketing relationships that fall under Everson’s (and formerly Shields’) remit are perhaps the ones that Facebook can least afford to let drop while it weathers churn at the management level.

The news of Shields’ new job was first reported by the Telegraph (a Tory-backing newspaper) earlier tonight.

Shields, an American ex-pat, is coming into a role that has been up for grabs since June, when chief executive Eric van der Kleij said he was stepping down to serve as an advisor to the Canary Wharf Group, a real estate development company that wants to bring more tech companies to the Docklands area of the city, which is currently very heavy on investment banks and other financial industry businesses.

Tech City has had its ups and downs since first being established in 2011. Started with some fanfare by Cameron as a route to revitalizing the East End of London by catalysing some of the tech startup activity that was already happening there, critics asked why the government chose to focus on one part of London when there are tech companies spread out to many other parts of England, such as Cambridge for hardware. Some have accused Tech City of being little more than a PR machine.

Whether Joanna Shields will be able to turn that image around will be the big question. The TCIO has already said that it plans to split the job into two, with the CEO having an external facing role and a deputy CEO acting as more of an event organizer.

Shields is already looking to take the Tech City vision into something beyond just London. “The spotlight has been thrown on the east London cluster,” Shields told the Telegraph in an interview. “We have to give this Government credit for recognising the success of it and then reacting with policies that are absolutely spot on for incubating businesses, not just in the cluster, but all across the UK.”

To be fair, there have been some very notable advances in London-as-tech-hub: among them, Google establishing its multi-story Campus incubator and events space; Amazon and Facebook both building out their operations in the city; General Assembly arriving in town; hundreds of startups in between all of that; and even an exit (the first, apparently).

Some of that is also just a consequence of how the tech world has continued to grow and globalize. We’ve also seen huge developments in Dublin, Berlin, across Israel, in Russia and more. Is London extra-remarkable in that context?

Before coming to Facebook, Shields had already established her tech credentials at the executive level: she had previously been the CEO of social network Bebo and also worked as a senior executive for Google in Europe, among other roles. This is her first foray into public policy.

Shields’ departure from Facebook follows a string of other executives leaving after Facebook’s IPO. Among them have been CTO Bret Taylor, Platform head Carl Sjogreen,and Ari Steinberg (influential engineer who had most recently been leading FB’s Seattle office). Three other recent business exec departures include head of partnerships Ethan Beard, director of platform marketing Katie Mitic, and platform marketing manager Jonathan Matus.

We have reached out to Facebook to find out who will replace Shields and will update this post as we learn more.

Update: Facebook has sent us the following statement:

Joanna has been a tremendous contributor to our EMEA organization and her leadership and passion will be missed. Facebook supports the UK Government’s vision for building a stronger technology-based economy and start-up ecosystem, and we wish Joanna every success as she moves into her new role at the Tech City Investment Organisation and as the Business Ambassador for Digital Industries.

Facebook real gift from virtural world

NEW YORK (AP) — Facebook is rolling out a service called Gifts which, as its name suggests, lets users send chocolate, coffee, socks and other real-life presents to one another.

Facebook Gifts launched Thursday to a subset of users in the U.S. and will roll out to more over the coming months as people begin to send gifts to each other.

Users will be able to click on a "gifts" icon on their Facebook friends' pages on Facebook's website or on Android mobile phones. (IPhone and iPad versions are coming soon.)

The icon will also show up on the right side of users' Facebook pages with the notifications for friends' birthdays, weddings and other life events. For example, if your friend's birthday is coming up in two days, you'll now see a "give her a gift" link and the gift icon next to her name and photo.

Clicking the icon will display presents you can buy, such as a Starbucks gift card, cupcakes or a teddy bear.

The recipient will be notified through Facebook to enter a shipping address for the presents. In some cases, they'll be able to select their own cupcake flavors or size and style of socks. They can also exchange gifts for other items if they don't like chocolate or don't wear socks.

The move represents Facebook Inc.'s first real foray into e-commerce. The company will take an unspecified cut from each item sold. On Thursday, possible gifts included gourmet ice cream, Andy Warhol prints, flowers, organic dog toys and spa packages.

Facebook Gifts is the result of Facebook's acquisition of Karma, a 16-person startup based in San Francisco. Facebook bought the company on May 18, the day of its rocky initial public offering. Karma's mobile app let people send gifts to their friends on the go. Facebook Gifts, of course, works both on computers and mobile devices.

Lee Linden, the former head of Karma, is now head product manager for Facebook Gifts, which he says incorporates "the heart and soul of the Karma experience."

"We think gifting is a form of communication," he said.

Google to pass Facebook in display ads

 Google is expected to surpass Facebook in display advertising revenue this year, beating all other competitors with a 15.4 percent share of the U.S. market, according to a closely followed research firm.

EMarketer said Thursday that it expects Google Inc. to generate $2.31 billion in revenue from online display ads — the graphical advertisements people see on websites. Display ads are more lucrative than the text-based advertisements that appear next to search results and account for the bulk of Google's revenue.

The New York-based research firm predicts Facebook Inc. will hold 14.4 percent of the market this year with $2.16 billion in U.S. revenue.

In February, eMarketer predicted Facebook would stay ahead of Google. The social networking company had surpassed Google a year earlier. But Facebook's ad revenue has fallen short of the expectations it set in February, just months before its initial public offering.

Google, eMarketer said, is helped by strength in its advertising network, video ads on YouTube and AdMob, the mobile advertising service it bought in 2010. Facebook began showing mobile ads to users only as recent as this year.

In all, eMarketer expects the display advertisement market to grow 21.5 percent this year to nearly $15 billion in the U.S., helped by both Facebook and Google. By 2014, the two rivals are expected hold as much as 37 percent of the market, making it difficult for smaller players.

In 2011, Facebook had a 14.1 percent share of the $12.4 billion U.S. display advertising market according to eMarketer, above Google's 13.5 percent. A year earlier, though, Yahoo Inc. held the lead with 14 percent of the market. By 2014, eMarketer expects Yahoo's share to be half that. In the coming years, market share among former online powerhouses such as Yahoo, AOL and Microsoft is likely to decrease as Google and Facebook grow, according to eMarketer.

Facebook's stock slid 39 cents to $22.90 in morning trading. Google dropped $3.68 to $723.82.

Potential Facebook competitors in Asia?

SEOUL, South Korea (AP) — A handful of smartphone apps that began as basic instant messaging services have amassed several hundred million users in Asia in just a couple of years, mounting a challenge to the popularity of online hangouts such as Facebook as they branch into games, e-commerce, celebrity news and other areas.

Among them is Line, which has grown to 60 million users, mostly in Asia including at least 29 million in Japan. Its developer estimates the number of users will reach 100 million by the end of this year. Also popular is Kakao Talk with 60 million users, more than half in South Korea where it originates. Other successful messengers are Nimbuzz made by an India-based firm which has amassed 100 million users including 31 million in Asia, and WeChat by China-based Tencent, which is nearing 200 million users.

The rapid growth of such applications underlines that people are increasingly going online using mobile phones and other wireless devices. It is a trend that has proved problematic for the world's most popular social networking site. Facebook has lost more than $50 billion of its market value since its initial public offering largely due to doubts about its ability to successfully insert advertising into the mobile version that a large and growing number of its 955 million users access from smartphones.

"Japan, Korea and to a lesser extent China are leading the way in terms of mobile messaging-centric apps that move into diverse and potentially very profitable new service areas like gaming, affiliate marketing, next-generation emoticons," said analyst Mark Ranson at research firm Ovum. "Offering a free, high quality messaging service is a good way of building a large and loyal user base which can later be introduced to more readily monetizeable services."

Instant messaging, also known as IM, was first popularized on desktop computers with applications such as Microsoft Messenger that evolved from text-based chatting and sharing files to the voice calls and video conferencing that Skype is known for. The advent of smartphones took IM back to basics with services such as WhatsApp and Blackberry Messenger that allowed for real-time chatting, swapping photos and not much else. The new instant messaging apps such as Line have evolved into online destinations in their own right.

"I use Line messenger every day, about every hour ... instead of text messages or emails," Supinda Toochinda, a 31-year-old interior designer in Bangkok, said in an email. She said Line was the only mobile application she'd spent money with, buying elaborate emoticons called stickers that can be sent to friends while chatting.

Part of the appeal of the applications is the ability to create an unlimited number of group chats and the ease with which connections can be made — the apps automatically create a contacts list by harvesting the contacts list saved in the phone. At the same time, managing privacy is simpler than on a social networking site.

Analysts say these mobile messengers are showing more nimble and promising moves in the efforts to make such mobile services profitable without relying solely on advertising.

"Kakao Talk and Line are seeing opportunities as Facebook isn't making money from users of its mobile website and app," said Ryu Han-seok, director of the Technology, Labor and Culture Institute, a consulting company, in Seoul. "In the mobile markets in Asia, they are ahead of the game."

"It is probably tough to compete with Facebook in the U.S. or Europe. But in Japan, South Korea and other Asian countries, they have a good chance of beating Facebook," said Ryu.

While Line messenger is expanding to photo editing and sharing, social games and Twitter-like features that allow users to follow corporate brands or celebrities, its windfall came from sales of virtual goods. Sales of stickers — a $1.99 bundle of cute pictures of cartoon characters or animals — have been its biggest revenue generator. In August, users spent about $3 million to send the elaborate emoticons when they chat with friends.

Kakao Talk, which is only accessible on mobile devices, says it is trying to develop a business model that isn't dependent on advertising. Since its launch in 2010, it has added a free voice calling service, a gift shop to send Starbucks drink coupons to friends, and options for receiving weather and news, discount vouchers and music videos.

"We are not interested in displaying mobile banner ads just to make money," Kakao Inc. CEO Sirgoo Lee said in an interview with The Associated Press.

The app has been wildly popular in South Korea. Even a small disruption in service makes news and it has entered the local lexicon with the phrase "let's do ka talk." South Koreans are typically connected to multiple group chats on Kakao Talk, holding conversations in separate chat rooms with family, a group of close friends, co-workers and other circles.

According to Appsooni.com, which compiles data on Android applications, South Koreans used Kakao Talk for 62 minutes a day on average in August, compared with 17 minutes on Facebook's Android application.

In a move seen as bringing the three-year-old startup close to generating a profit, Kakao introduced mobile games to its users in July.

"Giving gifts or sending emoticons are business models that Facebook doesn't have. Facebook simply displays ads so its model is different from ours. (Facebook's) profit models are not tailored for mobile users," Lee said.

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Facebook helps get out the vote

Facebook ad targeting to use e-mails, phone numbers

new tool for advertisers lets them target ads to customers who have already used their services.

Facebook plans to roll out a new advertising tool that will let companies target their ads to existing customers based on their phone numbers and e-mail addresses.

The social network is launching the new tool next week and touts it as a way for businesses to reengage with customers who have already used their services, according to a Facebook spokesperson.

For those who may have privacy concerns over this exchange of personal information, the social network said the process is secure.

What this means is Facebook isn't giving any of your data away, it's taking existing numbers and addresses from businesses and letting those businesses use the information to target its ads.

On the flip side, Facebook won't be gaining any new data from businesses. When advertisers give Facebook your data, it is hashed -- a security technique that scrambles your data -- before it is fed into the advertising machine. Once the ads are placed, Facebook dumps the hashed data, so that if an advertiser wants to do another ad, the process starts over again.

The new method was available briefly in the Facebook Power Editor , a virtual toolbox used by advertisers to create ads, according to InsideFacebook .

Facebook continues to figure out how to improve its advertising service amid revenue reports and forecasts that have not been up to par.

Of course, it's not the only company expanding its targeted advertising efforts. Twitter launched a feature today that puts tweets in the streams of a broader audience than before.

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