Facebook has banned offer providers Gambit and Tatto Media from providing offers in games and apps on the social network.

The development is one of the results of the recent scandal around the quality of offers in social games and apps. Some of the offers have been tainted as scams because they don’t tell consumers about hidden obligations or fees. Earlier today, Offerpal said that it was issuing a set of standards for its advertisers to follow in order to meet the highest ethics standards.

Tatto Media has had a history of problems with alleged deceptive ads, but Gambit has reportedly been trying to play by the rules. Facebook outlined the actions it was taking on Nov. 5, but it did not name the banned companies at that time. The reason was repeat violations of Facebook’s guidelines for offers. A spokesman for Facebook confirmed that the companies mentioned in the post were indeed Tatto and Gambit.

Curiously, Gambit said today in response to Offerpal’s announcement, “We at Gambit are really glad to hear that Offerpal is taking these steps. For our part, Gambit’s AdControl suite of tools has been in effect since the earliest days of Gambit, so we see this as great news because it validates our product development choices. … Because of the recent limelight on our industry, we think we can look forward to lots more announcements like this as more and more payments and offers companies realize that ‘monitor’ and ‘filter’ are key components to ‘monetize.’”

Gambit has also addressed the scam issue in its own blog. Apparently, Gambit’s approach isn’t good enough for Facebook, which has begun cracking down on scam offers as a result of the controversy. Gambit hasn’t yet responded to our query about the Facebook ban.

The offer crackdown is serious, since Inside Social Games reported today that the offer business accounts for 30 percent of revenues in the $1 billion virtual goods business. And Inside Social Goods reported that as much of 20 percent of the offer business may be based on questionable promotions. Thus, the crackdown on Facebook and other social networks could have a significant slowing effect if all of the questionable offers are removed.

Offers are special ads that are used to monetize otherwise free social games on Facebook and other social networks. In an offer, a user will agree to sign up for a Netflix subscription or credit card offer. The business has been lucrative because the offers guaranteed some kind of direct benefit for the advertisers, who are willing to pay more. And these offers are appealing to gamers who didn’t want to pay for virtual goods with credit cards. Offer companies like Offerpal, Super Rewards, Gambit, Trialpay and others have been at the forefront of the industry.

But as with other online media, complaints arose that some offers were scams. The scandal ignited last month as Techcrunch editor Michael Arrington challenged former Offerpal CEO Anu Shukla over the legitimacy of most offers at the Virtual Goods Summit. Shukla said that less than 1 percent of the offers have generated complaints from users. But the ensuing debate led to changes in policy regarding offers at Zynga, RockYou, and other companies. Facebook renewed its crackdown on scams and actually stopped one of Zynga’s games, FishVille, from launching until Zynga removed controversial offers. Zynga has also stopped using offers until it could set up a system to properly vet them. Zynga is now in the process of restoring offers, using companies that include Offerpal.

Our own Marshall Kirkpatrick’s dreaded brain chip for controlling computers and mobile devices may be closer than even he suspected.

Intel researchers in Pittsburgh told journalists today that brain implants are harnessing human brain waves to surf the Internet, manipulate documents, and much more. And just as we told you two years ago, the lucky recipients of these implants will be willing volunteers, not government-controlled guinea pigs. Some of us are now researching cheap flights to Pittsburgh.

Sponsor

Just think of how far we’ve come since the early days of portable tech. “If you told people 20 years ago that they would be carrying computers all the time,” said Intel research VP Andrew Chien, “they would have said, ‘I don’t want that. I don’t need that.’ Now you can’t get them to stop.”

Indeed, mobility, transparency, and accessibility are all the terms of the hour; and their advocates are popular laureates. The forefront of the user interface has revolved around concepts such as intuition, organics, and biology.

Gesture technology is removing one barrier that lies between human-to-machine communication; think about that the next time you twirl your iPhone around like an Etch-A-Sketch. Isn’t removing the need for physical contact the next rational step? Chien tells us that, although there are many challenges yet to solve, the day of brain-controlled computing isn’t so far off.

Dean Pomerleau works for Intel on matters of cognitive neuroscience, machine learning, computer vision, robotics, man-machine interfaces, brain processing of semantic information, and various brain-scanning technologies, such as fMRI, MEG, EEG and ECoG. He and his cohorts are solving the mechanisms of brain waves.

While there’s no doubt the use cases are fascinating, Pomerleau also brushes off user concerns about implants, saying, “Eventually people may be willing to be more committed… to brain implants. Imagine being able to surf the Web with the power of your thoughts.”

This is the precise line of thinking that Kirkpatrick debates so heatedly – perhaps as much now as he did in his editorial almost two years ago.

Have concerns around user privacy abated since then? Hardly, with Facebook and location-based-tech developers struggling to maintain balance for their users and constant struggles and inquisitions over corporate storage of user data. Has the issue of information overload lessened? If it had, would so many startups be staking their claim on the issue of firehose filtration? And is mobile tech obsolete enough to require even more portable access to the apps we love and – dare I say it? – need?

Are end users ready for brain implants? You tell us.

Discuss

Loopt — perhaps the largest location-based social network, a network that uses your location to recommend places to go and inform you of friends around you — announced the acquisition of GraffitiGEO this week. Several industry observers and researchers are raving about the potential of location-based social networks for businesses and advertising. “Context awareness is critical when you want to buy something, and advertisers get higher targeting based on our patterns and social contexts,” said Massachusetts Institute of Technology researcher Nadav Aharony in a recent BusinessWeek article.

Yesterday at the Web 2.0 Summit, Founder’s Fund managing partner Sean Parker gave a provocative presentation entitled “The New Era Of The Network Service.” In it, he argues that so-called “network services” like Facebook (which he helped start) and Twitter will soon dominate the web, rather than “information services” like Google and Yahoo.

It’s a very interesting idea, to say the least, and obviously you’re interested in it, as about 200 of you commented on it yesterday. So we’ve obtained Parker’s full slide deck from his presentation. Find the full presentation embedded below, definitely worth the read.

SP_Web2.0_FINAL_AsGiven

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

Last week Apple surprised the iPhone’s developer community with the annoucement that it was finally allowing free apps to offer in-app purchases. The move will likely lead to a fundamental shift in the way developers conduct businesss on the App Store (we’ve already begun to see some changes). I sat down with SGN CEO Shervin Pishevar to talk about the annoucement’s effect on SGN’s upcoming games, as well as its impact on the market in general.

Pishevar says that he was estactic when he heard the news — he almost immediately recorded a video sharing his elation that he sent to all of SGN’s 100+ employees worldwide. He explains that this is really the announcement that he’s been waiting for, but that he had no expectation that Apple might do it so soon. Now the company is working at a brisk pace to take advantage of the change: it will soon be releasing a new free version of its smash hit game F.A.S.T., which has done over $1.8 million in sales before Apple’s cut. The new version of F.A.S.T. will feature an extensive array of virtual goods, which users will be able to purchase once they’ve downloaded the core game, which will be free. I also suspect that many (if not all) of SGN’s games will be released for free from here on out.

After discussing the impact on SGN’s apps, the conversation turned toward how this will impact developers in general. The App Store is going to see some major changes, and some of those won’t necessarily be for the better. For one, it will become even harder for premium applications to get noticed — before now they only had to compete against other ‘paid’ apps for a chance to appear on the Top Apps list. Now many of them will be migrating to the much more crowded ‘free’ section, which means they’ll be facing off with the vast array of ‘fun’ apps that are so enticing for impulse downloads. There’s also the possibility that the store will become flooded with applications that you can download for free, but really offer nothing of value until you start paying for features, despite what users may have been led to believe (a so-called ‘bait and switch’).

Pishevar agrees that the new market may pose a challenge to new developers, who may have trouble getting noticed and establishing trust with users. But he says that the development houses that can establish a relationship with users will be able to rise to the top, even more so than before. That scenario would obviously put SGN, which has millions of installs across all of its games, in a good position.

But Pishevar emphasized that SGN isn’t going to be content to simply rest on its laurels and exploit its large audience by rehashing games that have already been successful (he notes that the the highly derivative nature of many games on Facebook was one of the reasons SGN decided to shift over to the iPhone). Instead, he says he wants to push the limits of the iPhone, and eventually other mobile platforms. And to prove that wasn’t just marketing talk, he gave me a sneak peek at some of the projects that SGN has in the works. I’m sworn to secrecy on those for now, but suffice to say, SGN has some seriously cool things in the pipeline right now that really will take mobile gaming to the next level.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

Facebook just made one of the biggest changes to the site’s user experience since the introduction of the News Feed three years ago. News Feed was the place in the very center of the site where all the activities of a user’s friends were displayed in reverse chronological order. That feature is now called the Live Feed and the News Feed has become a filtered display of activity highlights instead.

In September 2006 the News Feed was a radical idea; thousands of Facebook users revolted against the idea that all their friends would be shown every photo they uploaded, when their relationship status changed and other information as soon as it was available. Today we live in a different world. Almost everything is social and the new challenge is tackling information overload. That’s what Facebook just did today and it’s going to be very important for the future.

Sponsor

Everyone’s trying to solve this problem. There are inbox filtering services like ReMail, Threadsy and the experimental new Mozilla Raindrop. There are column filters in stream readers like Tweetdeck and Seesmic. Google Reader yesterday introduced a “magic” filter view for the most popular items across the whole network. FriendFeed, a small but innovative social aggregator started by one of the creators of GMail and acquired by Facebook for $50 million this summer, offers a “best of day” view of any stream of updates you’re looking at.

That FriendFeed view is the closest thing to the new Facebook News Feed, but a Facebook spokesperson told us that the two products are unrelated.

Everyone’s trying to tackle information overload. Step one, get more people sharing information. Step two, figure out how to create a personalized, high-value view of all that information by surfacing the most important updates for each user. Step three, profit!

How It Works

The new News Feed view is based on an algorithm that scores every update coming in through what’s now called the Live Feed. That scoring is based on the number of “likes” and comments an item has received and how much you personally have interacted with the update’s author in the past.

A related algorithm was used in the past to create the “highlights” section on the right-hand side of the Facebook home page. That section was getting too little interaction and didn’t include things like important status updates, the company says. If your sister posted a status update saying that she’s pregnant, a Facebook spokesperson told us today, that wouldn’t show up in the old highlights view. It should show up in your News Feed now.

So three big changes: 1. The new Live Feed is linked-to at the top of the page and shows a number of new items since your last visit. 2. Highlights plus hot status updates are now the default, the new News Feed. 3. Birthdays and other important events have taken the place of the old Highlights section; they are of particular interest to users and will now be easier to see.

What It Means

Facebook says that after viewing your new News Feed, you can go check out the raw Live Stream of all the most recent updates from your contacts. That’s the opposite of the way FriendFeed did it and neither strategy should be taken for granted. Decisions like this impact a major method of communication for hundreds of millions of people around the world.

By showing the News Feed highlights as the default view, Facebook will probably encourage users to pay more attention to, interact with more and grow closer to the people they already have a history of interacting with and the events that are already popular. Weak social connections and your personal long-tail of content are less prioritized in this view.

The inclusion of a user’s past behavior as a criteria for hotness is key, though. It’s not just a popularity contest. Your News Feed is your little universe and popularity is defined in relative terms.

That, again, is a particular strategy. The new Google Reader Popular View, for example, appears to evaluate popularity across all users in total.

What It Could Mean In the Future

Someday social networking is going to be like the telephone. Today you can’t send messages from Facebook to people on MySpace or LinkedIn but that isn’t going to last forever. Just as you can call someone who uses T-Mobile from your Sprint phone, someday sharing and messaging between online social networks will be a given.

How will social networks retain users then? Why stick with Facebook when some smaller service offers a decentralized social networking service outside of Facebook’s control but still tied into your friends on Facebook and elsewhere?

These services will someday have to compete on user experience, when they no longer have your social connections locked-in. The service that does the best job filtering up the most important information you have coming your way will likely be the service you stick with. That’s going to be a key area of competition between social networks.

How well will Facebook do at filtering the Live Stream of content? We’re about to find out and it’s going to make a big difference in how we experience the web. That will only be more true as more and more people begin publishing content.

There’s been a lot of emphasis on the live stream of real-time web content, but Facebook now joins many other services in recognizing that the best value is sometimes built by combining real time and slower assets.

Discuss

Taking aim at information overload, Facebook is now allowing users to see its news feed in two ways. They can either see a live stream with updates ordered by time, or the most interesting content as judged by comments and likes.

“While seeing real-time activities is extremely valuable, we also want to be sure you don’t miss other interesting content,” wrote Raylene Yung, a Facebook engineer in a company blog post today.

Stories in the “News Feed” section are featured based on how much activity they’ve attracted from others and on a user’s prior behavior. Are they likely to click on videos? Or are there certain friends they’re more likely to interact with? Facebook used to relegate these to the “Highlights” section on the right-hand part of the page. There is also a Live Feed that shows activity as its happening.

The feed design resembles what’s on Facebook Lite, a more spare version of the social networking site designed for developing countries with slower Internet connections.

The new design is a compromise between the ‘old’ News Feed, which used algorithms to present stories Facebook thought you’d find interesting, and the feed Facebook rolled out back in March that consisted of a Twitter-like stream of recent updates. Since this year’s redesign Facebook has used the ‘Highlights’ section at the right hand side of the screen to present items you may have missed, but this was never an ideal solution: for one, you couldn’t see your friends’ comments on these posts, and the small space afforded to Highlights made it easy to pass over.

Today’s change will make the Highlights section redundant, so it will be removed (everything below it will also be shifted higher on the page, which means the ‘Birthdays’ and ‘Events’ sections will no longer be buried). Facebook’s post also notes that the News Feed will include more events, including when your friends become fans of Pages, add friends, or RSVP to an event.

The change has been a long time coming — reports about the merging of Highlights back into the feed emerged as far back as June.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

The last thing the world needs is another video site, right? Well, that’s not stopping Aaron Crayford, who convinced a bunch of his supercomputer engineer buddies to put together Rippol, a video discovery site that blends hardcore machine learning with social streams. Rippol (not to be confused with rrripple, the media sharing site) is coming out of stealth today into private beta. Be one of the first 1,000 people to try it by signing up here. (If you don’t get an invite, the site will be launching publicly in a month at our next Realtime Crunchup).

Rippol is still in raw form (the UI needs more polish, not all the buttons work the way they should), but it is experimenting with some powerful ideas in online video. You can sign in with Facebook Connect, or create your own account (it will also support Twitter and Gmail sign-ins soon). Once you have friends on the system, it lets you discover new videos through your friends. The homepage is an activity stream of the videos you and your friends have watched, favorited, rated, and reviewed. And a global stream in the left column shows what the broader Rippol community is watching. Links to any video can also be shared on Facebook or Tweeted out.

You can click on any video mentioned in the stream to watch it, and chat with friends via Facebook Chat, which pops up from the bottom left of the browser window. Displaying videos as a realtime stream of information is a discovery mechanism that we are beginning to see in cutting-edge video sites like Magma (our review). And I suspect it will become adopted more broadly.

However, Rippol doesn’t rely solely on your friends’ activities to help you find interesting videos. The site is also a standalone video discovery engine in its own right. You can watch about 500,000 videos right now in the Rippol player, which can be detached like a chat box and moved around in front of the screen, while you search for more videos, check out your stream or chat with friends.

Rippol ingests videos from other sites like Hulu and YouTube and then it runs them through its “Butterfly Network” (see diagram at right, click for larger image). Here is where the machine learning comes in. The Butterfly Network looks at all of your video-related activities in the site, those of your friends, and those of people in your demographic. All of the videos on the site have particularly good metadata (titles, genres, actors, descriptions), which lets Rippol take advantage of data-mining techniques to recommend videos for you. It creates a genre cloud for different categories of videos (TV Shows, Movies, Sports, News),and then generates a list of videos for each genre tag you click on.

Depending on what genre of videos you are looking for, Rippol’s realtime ranking servers shows you videos associated with ones you’ve watched or liked in the past, your friends have watched or liked, and people in your demographic have watched or liked. If you click on comedies and martial arts videos, those will rank higher for you in the future.

Since Rippol has all the realtime stream data as well, the video results are skewed towards what people are watching right now. Your own actions impact the rankings the most, followed by those of your friends, followed by those of people in your age and gender group. And if you are a 45-year-old male who tends to watch videos more like a 25-year-old male, it adjusts the demo it associates with your actual watching habits.

The system is supposed to get smarter the more you use it, and the more your friends use it. So it’s hard to evaluate how effective it will be right now with only a handful of users, but it is a promising approach. Soon users will be able to suggest videos to add to the site. (Crayford says he’s come up with a novel way to filter out inappropriate videos from the broader community by taking into account what is acceptable to different social groups).

Crayford’s last company, Vusion, specialized in high-definition video streaming over the Web. It’s patents, intellectual property, and other assets were acquired by the Clarendon Foundation in June, 2009. Craydon learned from that experience that advanced technology can only take you so far, and this time around he is trying to create a complete consumer experience rather than just an enabling technology. Rippol is completely bootstrapped so far.

Screenshots:

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

Microsoft announced this week that it has made a deal to include public updates from Facebook in its search engine Bing. Some Facebook users expressed concern that their private activities might be exposed to search. The real story is a little more complex. To put it simply: Facebook is not ever going to knowingly expose private activities on the site to public search. We can say that with as much assurance as we can say almost anything about the internet.

None the less, Facebook has a clear agenda to convince you the user to willingly expose more information publicy by changing your privacy settings. Multiple Facebook execs have told us so when we asked point blank.

Sponsor

Facebook believes that sharing is good for the world. It was founded on making sharing private and secure between friends – so you’d share more – but it hopes in time to make hundreds of millions of people more comfortable sharing publicly.

As is, searching public activity is good for search users (though many are skeptical), it’s good for search engines and it’s good for the social networks serving up the data.

But is it good for social network users that don’t want their messages showing up in search results? That’s the wrong question to ask because that’s not going to happen.

Your Facebook profile is private by default. Your messages and media can’t be seen by anyone but your friends. Some small number of users have chosen to change those settings, some even making everything they do on Facebook publicly visible to the whole world. Clearly some users would find programatic analysis of their activities anonymized and made available in builk to be a violation of privacy – but many more would not and are all ready wide-open.

That group is probably made up mostly of self-promoters, marketers, overcompensating lonely people and other exhibitionists. (My profile is public, I fall under the self-promoter category, unfortunately.)

Facebook would appreciate it if you would put yourself in this category, too. The company believes that sharing leads to understanding between people, empathy and progress towards world peace. Sharing also provides nice opportunities to advertise.

Facebook wants to display lots of your information publicly, but it won’t shoot itself in the foot by breaking its promise to respect your privacy settings – whatever they may be. Is it strange that Facebook, now more populous than all but three nations in the world, has such a clear agenda to change the world’s culture? It is certainly something to be aware of. But Facebook is not going to make your private messages public.

Discuss