Last October Microsoft announced a $240 million advertising investment in Facebook, which put the valuation of the social media company at about $15 billion.

While it is shockingly common to see businesses throw around dollar sums with seemingly little attention to the number of digits left of the decimal point, big business has goofed up before.  I'll cite the current mortgage and credit crises as evidence of this.

That is why I'm wondering why companies value Facebook at such a high amount.  Granted, it and other social networks are currently business darlings with their rapid growth, loyal customer base that can have targeted advertising directed at, and great ability to furtively extract valuable demographic information from people through those pesky applications while playing hard-to-get since it is hard enough to monetize them to make the pursuit interesting enough.  However, while I'm an avid Facebook user now, I highly doubt that the site will do well in its current form in several years.  Social networking seems like a fad to me.

So, why are companies so eager to spend billions on a short term fad?  I don't know.  For awhile, I thought that the value of the sites is not what they are but what they will evolve into.  Will Facebook soon become the site that people use for e-mail, instant messaging, calendaring, photo sharing, networking, news reading, etc.?

If that's the case, I can see the value as a site can horde and maintain a loyal user base in which it can target advertising to while its users do a variety of activities.  But then I thought about the World Wide Web of the mid-1990s when portal services like AOL and Compuserve (remember that?) reigned.  They aimed to provide their users — who likely used them for Internet access — with everything that they needed (news, weather, reference material, e-mail, entertainment, etc.) on their portal sites in an attempt to keep people there.  In a sense they tried to act as if the whole purpose that the computer was invented was for you to visit and stay on their portal sites.

Well, what's happened to this business model?  It no longer works.  Granted, social networks like Facebook can gradually introduce more services to their users, but companies like AOL and Compuserve had more or less captive audiences, too.

After that thought process, that brings me back to my original question: Why are social networks like Facebook worth billions of dollars?

Fledging company UserVoice is attempting to provide focus groups to those companies that cannot afford focus groups.  The site's general idea is to moderate user ideas and complaints by means of formal comment boxes, polls, and ranking systems.  The three-person ‘Team UserVoice' is quoted as saying, "UserVoice adds structure to feedback and reduces the overhead of an honest dialog with our users - It creates a market around good ideas so we get more quality than quantity."

The interface is currently in its public beta stage, allowing (free of charge) access to its platform.  Those who sign up can create a page for their company, product, project, or even blog.  UserVoice just recently released the ability to add custom CSS to a company's page as well as c-name inclusion for a completely transparent user experience.  This means that the customer never perceives that they are on another site.  The idea is to put the UserVoice widget on the company's official site and allow users to comment on their company or specific products.  The company can then do several things:

1. Track user ideas as other users vote on them
2. Provide official responses to comments
3. Mark an idea as ‘planned'
4. Push out new features that users want
5. Collect fan mail

The new site has gained a lot of attention, but I question whether this new company can do things that are not already being done.  Sites like FeVote, Get Satisfaction, and Sales Force are already doing many of the things with which UserVoice claims to be able to help.  The only unique feature that I can discern is that UserVoice allows companies to create a specific page for themselves.  The effort seems to be made in keeping the comments more regulated and organized than the previously mentioned sites, but will that cause users to be less free with their suggestions and comments?  I applaud the company for creating a way for small to medium-sized businesses to have their own ‘focus groups' but it is going to be a couple of months before we will be able to decide if UserVoice shouts or gets silenced.

Recently, I was considering trading in my broken iPod for another type of MP3 player…that is; until I ran across an article from Wired stating that I'd better hold on to at least one Apple product.

According to InStat, by 2012, 40% of all music purchased is going to come from digital music downloads.  Most impressively, the vast majority of those downloads come from Apple iTunes.  Almost 30% of the computers in the world have the download software, according to Digital Music News.

I personally buy nearly all of my music through iTunes.  For me, it seems easy, safe, and quick.  I like the fact that I can purchase a single song from an album, and the fact that an entire album on iTunes is typically less expensive than a CD.  Do I hate the fact that Apple controls yet another aspect of the computer market? Yes.  Will that hatred stop me from downloading the latest free single of the week? No.

It will be interesting to see if these predictions from InStat and Wired are correct.  I would like to also predict that by 2012, Apple will have released another five ‘upgrades' to the design of the iPod.

Combining aspects of things that people already enjoy is one of the best ways to make an impression on a market without having to be completely original or creative.  For the past couple of months, there has been a surge of such activity in the form of ‘angry' video game reviews.  These reviews combine aspects of life that many males (and some females) enjoy, including ranting, nostalgia, cheap Photo shopping, and dirty humor.  Taken together, these form a "review" of a classic video game.  The reviews have the taste level of an episode of Family Guy, but also have the marketability, as well.

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So while reaching the $21 billion plateau for the first time sounds great, the growth of internet ad revenues is also slowing down.

The data, collected by the Interactive Advertising Bureau, suggests revenues grew an estimated 25 percent last year, up from $16.9 billion in 2006. That’s a whole 10 percentage points lower than the previous year’s growth.  Even the dollar figure was lower, with a $4.2 billion increase compared to $4.3 billion in 2005.

The increasingly torpid growth was forecasted by many analysts though. As the internet continues to soak up more of the advertising stream, this has meant less money for traditional outlets like newspapers. Still, the internet only occupies about 10 percent of all American ad spending, which means plenty of room for growth, albeit slower.

There are some variables that may contribute to the slowdown in growth not accounted for IAB's figures. We’re arguably in a recession, and one of the first things companies do when the pockets get thin is cut ad spending. Some of the big boys like MSN, Yahoo!, and AOL are even having a rough go of it lately.

A full breakdown of the numbers is expected to be released by the Interactive Advertising Bureau in May.

We’ve written about the One Laptop Per Child project before on The Bivings Report. Now they have launched the Give One Get One promotion running through November 26^th. The way it works is for a $399 donation one laptop is donated to a child in a developing nation and one is sent to another child of your choice.

So why is this a big deal? It’s the only way that the public (read you – the "child") is able to get one of these laptops. At first I questioned the motivation for wanting one. Isn’t personal ownership of one of these cool, inexpensive and innovative laptops against the spirit of the OLPC project? These are supposed to be for the kids, right? I especially thought this when I saw this post the other day on Engadget.

But I think when all is said and done this is a good thing. Gadget crazy hackers get a new toy to play with and will probably make it 100 times as awesome as it already is, and a child in a developing nation gets a fantastic learning and communication tool. Plus as part of the promotion you get a free year of T-Mobile HotSpot Access worth $359.98 and a tax write off of $200 for the laptop you gave. It’s a win-win-win-win. Now all they have to do is keep up with production.

Everyone knows about author bloggers like Guy Kawasaki and Seth Godin. But outside of the Technorati Top 100, there are a lot of authors that have used blogs to create fantastic communities of users. Here are my five favorite, slightly lower profile author blogs:

(5) Malcolm Gladwell

Gladwell, the author of The Tipping Point and Blink, started his blog in March 2006. Most of his posts expand on his New Yorker articles or comment on interesting stories he comes across. He has a very engaged community that posts hundreds of comments to every entry. He’d be hire if he posted consistently (nothing new since January).

• Sample Post: Defining a Racist

(4) Tim Ferriss

Ferriss is the author of the book the Four Hour Workweek and just started his blog a month or so ago. His writings, which focus on how to streamline your life and increase your own efficiency, have really struck a chord with folks. The blog has been really entertaining so far although it is possible that Ferriss is a bit of a one trick pony. Plus he doesn’t work much so we’ll see if he sticks with it after the promotional aspect wears off.

• Sample Post: How to Check E-mail Twice a Day… or Once Every 10 Days

(3) Scott Adams

Dilbert author Scott Adams writes daily posts about whatever is on his mind to his surprisingly fantastic blog. I’m a much bigger fan of the blog than I am of the Dilbert cartoon. Adams just has an interesting take on life that really comes across in his blogging.

• Sample Post: What’s Your Permanent Age?

(2) Freakonomics

I’m a big fan of Steven D. Levitt and Stephen J. Dubner’s book Freakonomics. So I was pleasantly surprised to find a year ago that not only were they blogging, but were doing so quite well on a daily basis. On their blog, they provide theirs takes on whatever topic strikes their fancy.

• Sample Post: Poker: Skill vs. Chance

(1) Neil Gaiman

Neil Gaiman is a bit of a jack of all trades - he has written books, comics and films, among other things. He is also one of the first author bloggers, having started blogging in February 2001 in an effort to promote his book, American Gods. These days Gaiman blogs about his work, his life and spends a great deal of time answering reader mail through the site’s Ask Neil feature. Gaiman was born for the blog format.

• Sample Post: Tabs, writing and why writers should not carry portfolios

This post is part of ProBlogger’s most recent group writing project, with the theme of “top five”. Be sure to check out other entries!

One trend to watch this year is the boom in well produced, niche video blogs.  The children of Rocketboom. 

My favorite example is Wallstrip, a daily video blog that takes an in depth look at a hot stock each day from a sort of layman’s perspective.  Using humor, they try to explain in real world terms why a stock is doing so well.

I think it is terrific.

To give you a taste, following is a recent show in which a bunch of venture capitalists race to see who is the most proficient on a Blackberry.  Most of the shows are a bit more informational than this one, but it gives you a taste of Wallstrip’s tone. 

On a side note, I think it is just a matter of time before someone does this for the political scene in DC. I’m looking forward to it and I hope it is as good as Wallstrip.

Virtual gaming fever has hit the MacArthur Foundation, resulting in the philanthropic organization awarding Indiana University professor Edward Castronova a $240,000 grant to build a Second Life -esque virtual world fashioned after the plays of Shakespeare. The project, entitled "Arden: The World of Shakespeare," is meant to let Castronova and his research team delve into online behaviors by conducting ongoing social experiments online.

In an article by CNET's Daniel Terdiman, the professor explains that the early designs are influenced by a "Richard III" theme, which gives designers and prospective gamers the necessary historical context needed to spark the imagination.

Castrova, an Associate Professor of Telecommunications at Indiana University, is the author of Synthetic Worlds: The Business and Culture of Online Games and Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier, as well as the director of the Synthetic Worlds Initiative. The Synthetic Worlds Initiative was founded in 2004 to "promote research on synthetic worlds." The research center has both a website and a blog .   

According to a Reuters article, the 1,753 residents of the farming village of Hansdehar have chosen to connect to the world via the Internet, in hopes that the Indian government might take notice of the poor condition of their infrastructure. From a link on smartvillages.com,  Internet users can see pictures of the village, read profiles of the residents,  learn about the specifics of the infrastructure problems of Hansdehar.

The website was the brainchild of Kanwal Singh, a former web developer for the Chandigarh government. His mother's house will be the set up for the first Internet station in the village. Once the connection has been established, the Internet will enable residents to seek out opportunities they would not have otherwise known existed.

 A number of residents already know what they would like to do on the Internet. Here's a sample:

• Get better prices for their crops by trading on the National Commodity & Derivatives Exchange
• Publish an academic paper on mathematical theory and philosophy
• Find a marriage partner
• Apply to college
• Unite with other rural villages that have been ignored by the government.

John Voelcker, an interactive media strategist, released a review of the top ten technologies that are changing the world. His list is based on technologies developed by social entrepreneurs who thought through the development , usability and financing of their solutions. 

Voelcker's list is as follows, followed by summaries (based on his paper) of what these products actually do:

1. The Enviroloo by Enviro Options (Pty) Ltd of Kya Sands, South Africa.

Sewage treatment poses a problem in the developing world. People are exposed daily to disease carrying insects and contaminated water. In response to this problem, South Africa-based Enviro Options Ltd. introduced a new system, the Enviroloo, which uses heat and ventilation instead of a water-based system.   

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Over the past few years, microfinancing has grown in popularity with a number of internationally focused entrepreneurs and international development workers. The concept of microfinance was introduced by Dr. Muhammad Yunas, who began an experiment in Bangladesh in the mid 1970’s. The professor gave a group of 42 women only $27 to start a bamboo chairmaking operation.  He found that that $27 allowed the women to take care of themselves and their families, sell their chairs and repay their loans. In the early 1980s, Dr. Yunas began the Grameen Bank, which extended small loans (typically less than $300) to the poorest of the poor to help them onto the road of self-sustainability.  The loan repayment rate is around 98% and the bank is now hugely successful, it’s worth having been estimated at nearly $2.5 billion. Grameen’s operations have been modeled by a number of similar microfinancing institutions in a number of other countries, including Nepal, India, Norway and even in the US.

Twenty-eight years after Dr. Yunas first loaned the $27 to the bamboo chair operation, a staff member of the Village Enterprise Fund, Jessica Flannery, along with her filmmaker husband, Matthew, learned that they could use Paypal to essentially wire loans to rural communities through a field operation volunteer who was with the Village Enterprise Fund. The couple worked tirelessly to figure out how they could get involved in microfinancing. They came up with this: an Internet driven microfinancing operation they named Kiva. (more…)

Those polling maniacs over at Rasmussen Reports released a study today that claims that 69% of Americans still have a positive opinion of Wal-Mart, while 29% do not like the superstore. The report revealed the following:

• Americans who are in the lower or middle income brackets are more likely to have a positive opinion of Wal-Mart than those in the upper income bracket.

• Of the 25% of Americans who claim they rarely or never shop at Wal-mart, 35% percent think positively of Wal-Mart.

• Those surveyed say that if given a chance to shop at either Wal-Mart, Target or K-Mart, 48% would prefer to shop at Wal-Mart, 30% would go to Target and only 9% would go to K-Mart.

I’m curious to see if there’s a difference in category. For instance, if someone was asked if they would prefer to buy clothes from Wal-Mart, Target or K-Mart, would they still choose Wal-Mart? Or, if they were given the chance to have a shopping spree at either Wal-Mart, Target or K-Mart, would they still pick Wal-Mart?

I didn’t realize that the U.S. was such a laggard when it came to the deployment of broadband Internet access. See chart below, courtesy of the International Telecommunications Union. We’re 16th on the list of the top 20 economies, one-half Korea’s rate, and just under Liechtenstein’s.

Not very impressive; perhaps reflects a real need for policy to spur more investment and competition in the telecommunications sector. Wonder just how the debate over net-neutrality will affect our position in this chart over the coming years.

I read an interesting article in Business 2.0 this month (June 2006) entitled “Flipping Web Fixer-Uppers” regarding a new trend in online entrepreneurship – purchasing underperforming sites, improving the content, infrastructure, and/or marketing to build traffic and revenue, and then selling them for a profit. This has been facilitated by sites such as SitePoint and eBay where whole sites and the businesses built around them are auctioned off.I took a look at SitePoint, and there are a lot of sites that I would never purchase, but there are a few I found that I would consider. As the article in Business 2.0 says, the key would be finding a site about something you are passionate. I do not think that a techie would be able to flip a site on modern art, nor would a musician be able to turn a profit on a site dedicated to advanced data structures.

I do think that this kind of entrepreneurship has merit, as I have personally visited many a site with potential but which has been neglected. There are many destinations on the Web that simply need the tender love of someone who really cares about the site’s topic in order to blossom. Virtual real estate certainly has tangible value, so it is natural that this kind of opportunity arose just as it did for neglected homes in hot housing markets across the country.

Some of the sites for sale are quite comical. My favorite is SaveToby.com, which I had run across before. It involves threatening to eat an innocent bunny, and the viral momentum it had a few months ago is worth a blog post in and of itself (stay tuned).

If you are interested, visit these sites to see some of the Web properties currently up for sale:

• SitePoint
• EBay