Bitcoin exchange service Mt. Gox is experiencing some issues with U.S. authorities. The Department of Homeland Security issued a seizure warrant to Dwolla for the money in Mt. Gox’s Dwolla account. Mt. Gox users can’t use Dwolla as a funding option anymore even though it was one of the most popular options. The Japanese startup failed to register in the U.S. as a money transmitting company — president and CEO Mark Karpeles now faces up to five years in prison.
Dwolla had no choice but to proceed with the request. IDG News obtained a copy of the warrant through the U.S. Immigration and Customs Enforcement (ICE), the investigation team of the Department of Homeland Security.
In order to accept funds in dollars, Mt. Gox opened a Wells Fargo business account for Mutum Sigillum LLC (Mt. Gox’s American subsidiary). The company had to complete a document that states whether it provides money services or not. The warrant reads: “That document was completed on May 20, 2011, and identified Mutum Sigillum LLC as a business not engaged in money services.”
In particular, Karpeles answered no to two important questions: “Do you deal in or exchange currency for your customer?” and “Does your business accept funds from customers and send the funds based on customers’ instructions (Money Transmitter)?” If the ICE feels the need to emphasize those questions, it means that the DHS probably believes that Mt. Gox is both a money transmitter and a currency exchange service.
Mt. Gox should have registered with FinCEN to limit fraudulent activity — it is a requirement for money services in the U.S. As Bitcoin is an independent and anonymous currency, many observers believe that it is used for money laundering and paying for illegal drugs. It could be the DHS’s main concern.
The exchange service is still working fine. So far, Mt. Gox wrote the following statement on its Facebook page:
Like many who have contacted us, MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously. However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.
Facebook Home, the app which CEO Mark Zuckerberg touted as the “next version of Facebook,” has not been an immediate hit. Its Google Play rankings have been dropping steadily after the launch buzz wore off, according to new data from top app store analytics firms. Despite having an active user base of over a billion on the social network itself, the company announced on Thursday that it was just now “nearing” 1 million downloads for its Home app. Plus, AT&T also slashed pricing this week on the HTC First, the first Facebook Home-powered handset, which went from $99 to just $0.99.
The application became available for download on April 12th on Google Play, where only a limited selection of devices were supported: the HTC One X, HTC One X+, Samsung Galaxy S III and Samsung Galaxy Note II. A preloaded version of the app was made available via the HTC First, which officially went on sale that same day. This week, support for the HTC One and Galaxy S4 was also added.
To be fair, the limited rollout is partially responsible for the app’s inability to maintain a higher ranking.
On April 24th, Facebook Home reached its best position on the charts in many of the countries where it was available, but its ranks have declined in several key markets since. Its moves indicate an early rush from curious Android owners, but then a tapering off as word got out that the app wasn’t quite ready for primetime.
App Annie’s data demonstrates this rise, then subsequent fall. Shortly after becoming publicly available, Facebook Home reached #72 overall in the U.S., on April 16th. By April 23th, it had also reached the top 100 overall in 8 countries (Norway, Singapore, Canada, Denmark, Australia, Hong Kong, Hungary, U.K.), and the top 500 in 38 countries. By the end of April, it started to drop, then ranking in the top 500 in 29 countries, and having dropped out of the top 100 worldwide altogether.
It has yet to return to the top 100 in any market.
Distimo’s analysis of the top 500 apps on Google Play, also confirms the same general trends. Towards the end of April (4/29), the firm found that Facebook Home was ranked highest in Luxembourg, where it was #83 overall, and was lowest in Portugal where it was ranked #477, but its ranking was on the decline.
In the chart below, you can see Facebook Home’s top ranks as of 4/29 as well as its ranking change since just a few days prior (4/24), indicated by the small number at the top of each country’s bar.
As of a few days ago (5/8), Distimo found that the picture for Facebook Home has gotten even worse. In key countries including France, Germany, Brazil, and Argentina, Facebook Home remains out of the top 500 overall apps.
And the number of countries where Facebook Home is even ranked is fewer still. (Compare the number of bars in the chart below to the above).
You can also see the ranking decline for the U.S., Germany and Australia, pictured below as a line graph.
App Annie confirms this decline, too. As of May 10th, their data shows Facebook Home is only in the top 500 in 19 countries. And it’s not close to breaking the top 100 in any of these, with #191 being its highest ranking – and that’s in Norway.
Most countries are somewhere in the 300-400 range – for example, the U.S. is #338.
Still Time To Recover?
This is not what you would call a hit.
Even Facebook itself fudged its numbers when discussing Facebook Home traction earlier this week, noting that the app was “nearing 1 million downloads.” Those are downloads, not actives. And as the above data indicates, the app is losing steam on the charts.
That being said, for those who adopt Home, engagement soars. To summarize an earlier report: among those who use the app, 25 percent more time spent on Facebook as a whole, with comments and likes up 25 percent, Chat usage up 7 percent, and messages sent up by 10 percent.
But the goal now is to get more people to download – and then not abandon – the application. Facebook admitted that the replacing people’s custom widgets and app folders was a mistake. [Update: And as Josh Constine writes, that mistake was in part due to Facebook's iPhone culture. Some of the Facebook employees building and testing Home were regularly iPhone users, and didn't realize how big of an issue the missing customizations were.]
Facebook outlined its plans for getting Home back on track, saying it will soon offer a better onboarding experience for new users, add an icon dock (the tray of favorite apps at the bottom of your homescreen), make it easier to initiate chats with a new “Dash Bar,” and will work towards becoming more homescreen layer than replacement, so as not to disrespect the work users have done in customizing their phone.
Time well tell whether or not Facebook can make these changes in time, before it loses further mindshare among early adopters who are now spreading word that the app is a flop.
“House Of Cards” proved that great, exclusive content can create loyal customers. While Facebook isn’t about to produce TV shows, it tells me that it plans to ramp up production of its Facebook Live original programming starting with a talk with Star Trek celebrities today at 5:15 p.m. PST. Comedian Andy Samberg will interview film director JJ Abrams and classic cast member and social media maven George Takei.
Randi Zuckerberg, CEO Mark Zuckerberg’s sister, started Facebook Live in 2010. A website and Facebook app powered by Livestream, Facebook Live streams talks and offers an archive of past video clips. Users can discuss the videos in real time with other users and ask questions. Facebook Live moderators then pick from submitted questions, name-check the people who ask them, and pose them to the celebrities.
It featured Randi’s interviews with celebrities, as well as instructional talks on Facebook’s products and marketing tools. Later it would host Facebook’s election coverage, including Barack Obama’s town hall talk at Facebook headquarters in 2011. Over the years, Oprah Winfrey, Vin Diesel, Madonna, astronaut Ron Garan, and Israeli President Shimon Peres all came on the air.
For the last six months, though, Facebook Live has been pretty quiet. Since Bravo’s Andy Cohen interviewed Rihanna in November, the only video it’s added was from the Facebook Home launch event. While fascinating to tech insiders, there wasn’t much wide appeal.
But now, the social network is putting Facebook Live back in gear. A Facebook spokesperson for the project tells me “Facebook Live is something we’ll be utilizing more.” While more shoots haven’t been lined up, they should come at a brisker pace.
Why invest in original programming? “The purpose of Facebook Live is to give fans an opportunity to interact with public figures and give the public figures a global platform to present how they are using Facebook [or are engaged in conversations happening on Facebook] in an authentic way,” is the rather dry answer I got from the spokesperson.
But digging a bit deeper, Facebook Live accomplishes several strategic goals for the team at 1 Hacker Way. First, it can turn fans of the stars that Live brings on air into more frequent Facebook users. On the flip side, it can turn celebrities into more hard-core Facebook content creators. Facebook wants to be the place where people follow their favorite public figures, but it needs them posting frequently.
Most importantly, though, it demonstrates Facebook’s potential as a live events discussion platform. Becoming the second screen to important global events can generate tons of time-on-site and engagement. This has historically been Twitter’s domain thanks to its unfiltered, real-time feed, but Facebook wants a piece of the pie.
If you have a great time chatting with other Star Trek fans today, maybe you’ll choose Facebook to discuss the next Star Trek TV show premiere rather than on its 140-character competitor. With the potential to promote them to a billion people, Facebook shouldn’t have much trouble getting the world’s VIPs into the revamped Facebook Live studio.
Facebook has finally found a permanent executive for one of its key leadership positions in its international operation: Nicola Mendelsohn, a longtime veteran of the ad industry, is joining the social network as its VP, EMEA. She replaces Joanna Shields, who left Facebook nearly seven months ago in October 2012 to run Tech City, the London tech cluster advocacy group. Carolyn Everson, VP of Global Marketing Solutions, was in the role on an interim basis.
Mendelsohn joins most immediately from Karmarama, an ad agency where she was partner and exec chairman. Before that she was at Grey London and a board member at BBH. She had also most recently been president of the IPA — the first female in the organization (an ad trade industry body) in 96 years. She’ll be leaving her position at Karmarama in July and making the transition then.
Facebook has had a mixed picture in EMEA and given that it currently makes the vast majority of its revenues from advertising, it makes sense to draw from that world for the role. Europe alone has 269 million monthly active users in Q1 but its ad revenues in the region actually declined last quarter, and are now at $423 million, down from $440 million the quarter previously. That was in a quarter where other regions like the U.S. declined as well — although some of that would have been due to seasonal attributes and also the fact that the last quarter covered a slightly longer period.
On the other hand, the EMEA operation also includes key markets that in some ways may represent some of the most interesting growth for Facebook: with regions like Africa, the Middle East and Eastern Europe also included in Mendelsohn’s remit, she will also be responsible for some of the emerging markets that are currently some of the fastest growing for the social network. As CEO Mark Zuckerberg said when Facebook announced 1 billion users, the next 1 billion is likely to be in emerging markets like those in in EMEA rather than in more developed and mature regions like the U.S.
Mendelsohn will be bringing deep contacts in the industry, along with both independent and big-four agency experience to the mix as Facebook looks to grow the number of brands and agencies relying on Facebook and its particular brand of social advertising for their marketing strategies.
“Facebook’s innovation in the way brands are putting people at the centre of the conversation is fascinating,” Mendelsohn said in a statement. “I am very excited to be joining the team and I look forward to bringing my experience to Facebook.”
She will be reporting to Everson. “I could not be more thrilled to announce Nicola Mendelsohn as the VP of EMEA,” Everson said in a statement. “She brings outstanding leadership and passion for what Facebook can do to become an indispensable partner for our clients and agencies throughout the region. It’s testament to Facebook’s innovative role in business and advertising that we’re able to welcome a leader with such great experience.”
More to come. Refresh for updates.
Facebook says that there are no plans for now to add advertising to Instagram, even though advertisers are approaching them, CEO Mark Zuckerberg said today during the company’s Q1 earnings call. Adding ads could end up stunting Instagram’s rapid growth. He said, more than once during the call, that Instagram is currently growing at a faster rate than FB did at the same age, and it now has 100 million users.
“They’re really doing well and growing quickly and that is the right focus for them,” Zuckerberg said. “They have the opportunity to…build community. I am really optimistic about the business and the opportunities.” But he also noted that “big brands are approaching us” about doing more on the platform — perhaps commercializing more, is the implication here. Instagram is already a pretty substantial marketing platform.
Facebook faced an outcry last year when Instagram updated its terms of service, with many concerned about how Instagram would get commercialized, specifically around selling ads against users’ photos. The company ended up reverting back to its original terms. At the time, Instagram co-founder Kevin Systrom noted,
“Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.
On one hand, the decision to hold off on adds on Instagram runs counter to how Facebook has been running the rest of its mobile business. The company has been focusing a lot on mobile advertising, which now makes up 30%, or $375 million, of all of its advertising revenue. For now, Facebook seems happy instead for Instagram to provide a complement to the increasing commercialisation on Facebook’s main platform, which includes lucrative app install ads.
On the other, there’s still a lot of evidence here that points to Instagram still lacking the scale to be an effective ad platform for the company. While Instagram now has 100 million users, mobile active users for Facebook are now at 751 million.