Today, not that much has changed.

After debuting close to $40 and cratering to just under $18 in August, the stock has somewhat stabilized in the $25 region, down 30 percent from its opening-day high. And along the way, the story emerged of how Facebook tried to hide some of the mobile risk inherent in its business and how the company panicked and botched its IPO by using vague positive language in its public prospectus and, apparently, specific negative information about slowing revenue growth to institutional investors privately.

Not to mention the $100 million paid to banks to stabilize the stock — on top of $176 million in IPO fees — for efforts that ultimately failed. And technical glitches that cost the NASDAQ $62 million in compensatory fees.

All of which negatively affected the overall IPO market.

That all said, however, Facebook has seemingly nicely recovered from the disaster — at least from a business fundamentals perspective. Revenue growth was strong in its latest quarterly earnings release, with the company booking $1.46 billion in revenue for Q1 2013, compared to about $1 billion a year ago. More importantly, mobile was significantly up, accounting for 30 percent of ad revenues, and Facebook singlehandedly accounted for 6.5 percent of all online ad dollars spent in the U.S.

Not exactly Google numbers, but pretty good nevertheless.

And the company has massively beefed up its advertising options. It’s now posting retargeted ads right in the news feed, once sacrosanct territory. And in a move aimed directly at advertising giant Google, Facebook has launched a self-serve tool that allows advertisers to target its users based on what they actually buy and want to buy offline … which is a significant move to targeting the intent graph that Google hits so well by virtue of being a search engine, but Facebook has often missed since its visitors are on the site to meet and greet people. In addition, as soon as July, Facebook will be rolling out 15-second video ads in the news feed, a product that it will be charging major brands millions of dollars for.

All of which is having an effect.

The consensus recommendation for Facebook is currently a buy, with a price target of $34. Most analysts are in the Strong Buy category, with few or none in the dreaded Underperform or Sell slots. And in the past four weeks, analysts have revised their earnings estimates upward by a factor of 6 to 1.

So there’s a lot of positive in Facebook’s future, and there’s a ton of potential. But it’s still challenging when analysts compare Facebook stock with other internet high-fliers like LinkedIn or Yelp, which rose 148 percent and 48 percent in their first years, respectively.

But at least it’s better than Groupon and Zynga, both down around 75-80 percent.

And, I would argue, while there are a ton of challenges and many very significant competitors — primarily Google — the future for Facebook is bright.

Even if the public start was a stubbed toe.

“Facebook won the MySpace battle because of better and more immediate interaction with people,” Eric Covino says. “The more they get away from that, the bigger the concern.”

Covino is the founder and CEO of CreativeSignals, an online marketing firm that buys Facebook ads, among other things. And he’s not impressed with the new of the impending autoplaying video ads that Facebook is rumored to be adding in the next few months.

Source: John Koetsier

Facebook’s clean, uncluttered new News Feed.

As soon as July, according to some reports, Facebook will be rolling out 15-second video ads right in your news feed. You’ll only see one video ad from one company a day, but the positioning right in your news feed — and the fact that they may be autoplay ads– makes it a risky move. That’s very different than Facebook’s existing video ad proposition, as Wired notes, which is on brands’ own product pages.

The rationale, however, is the pot of goal at the end of the digital rainbow.

“They’re looking to push out millions of dollars of ads,” Covino sayw. “The price per spot is definitely north of a million.”

The challenge, for Covino, boils down to user experience. MySpace bit the dust because of a horrible user experience cluttered with ads. Facebook, which just added retargeted ads in the middle of your news feed, initially had just one ad per page. The social network moved to four in 2011, then to six, and has tested up to 10.

The pressure, especially now that Facebook is a publicly-traded company, is to increase revenue. And there’s also pressure from advertisers, who want new and better ways of splashing their messages in front of social media users.

“With both Facebook and Twitter, you have these tremendously large user groups with advertisers salivating over them,” Covino told me. “I’m worried about the user experience … they keep interrupting people.”

Facebook, of course, is not unaware of these problems, and they test almost everything they do with small groups of Facebook users before migrating the changes slowly to others. So if there is a significant user backlash, Facebook will know, and it will be able to course-correct.

Source: Jolie O'Dell/VentureBeat

Mark Zuckerberg announcing the updated News Feed

The question, however, is whether the tension between cash and user experience will be resolved in a way that solves both problems.

Covino’s not so sure.

“The core problem of all this is that you have to overcome the psychology of what your users think your service is,” he says.

In other words, people come to Facebook to connect with friends, not necessarily with brands. That is probably largely true, but people are also connecting strongly with companies on Facebook — especially local community businesses. In fact, Facebook trumpeted just a month ago that its users have made more than two billion connections to local businesses, view their Facebook pages 645 million times a week, and comment on them 13 million times a week.

And Facebook fans have never been more valuable to brands — BMW fans are worth $1,613, Starbucks fans $177, and Coke fans are worth $70 to their respective brands.

The core question, to Covino, is how long they’ll stay that way.

“All these things are great, and they sound great, but can that money overcome psychology?” he wonders. “I’m extremely skeptical.”

Video ads in mobile games and apps saw huge growth last year, according to AdColony, which created a platform for just such a thing. The Los Angeles startup said users watched more than a billion high-definition videos via its platform since 2011.

Privately held AdColony doesn’t disclose its revenues. But it said that it had 565 percent revenue growth in 2012, compared to 2011. And the fourth quarter of 2012 was its six consecutive quarter of record revenue. Spending on mobile video ads grew about 122 percent from 2011 to 2012, and spending on mobile ads of all kinds in the U.S. rose 180 percent over the previous year.

Will Kassoy, the chief executive of AdColony, told GamesBeat that the company should see a seventh quarter of record revenue in the first quarter of 2013 and that it is growing faster than the overall market. Kassoy said the growth happened because mobile users and brand advertisers have waited for a platform that delivers high-quality mobile video. AdColony focuses on delivering high-definition, instantly playable video ads, which users can view as an option in mobile games. If they watch the full ad, they get virtual coins to spend in a game. AdColony’s technology eliminates load times and buffering delays in video ad playback regardless of the connection strength.

“Video has become a very powerful tool in mobile,” Kassoy said.

The results are good because the ads deliver videos that users want to see, such as game or movie trailers, he said. AdColony launched in March 2011. That’s a short time ago, but AdColony is now working with Fortune 500 brands and more than half of the top-grossing publishers in the Apple iTunes App Store. The ads are viewable in 65 countries on both iOS and Android.

Kassoy said advertisers are moving away from standard ad units like banners and toward mobile video. In a survey of clients, two-thirds of advertisers said video ads were more effective for app-marketing campaigns than display ads or offer walls. And 50 percent of respondents said they plan to shift more budget to mobile video in 2013. This year, Kassoy said companies are focused on video ads for monetization and user acquisition.

AdColony said its completed video views grew 3.5 times in the past year. AdColony’s average publisher earnings per thousand views (eCPM rates) grew 60 percent year-over-year. Click-through rates on video ad campaigns grew 27 percent year-over-year. The average session time for apps in AdColony’s network is more than 10 minutes.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Mandatory commercial breaks are coming soon to your Facebook News Feed.

Facebook is currently shopping around its most outlandish ad unit yet, AdAge reported today. The social network plans to debut video advertisements that autoplay in the News Feed and is said to be courting TV advertisers with deep pockets. The ads are slated for release in the first half of 2013.

When reached for comment, a Facebook spokesperson declined to discuss the company’s plans around video ads.

Facebook is hoping to attract the type of premium ads you see on television, according to the report. The company plans to allow advertisers to run 15-second spots that will take over your News Feed and play video, and possibly audio, automatically.

“On the desktop version of Facebook, the video ads are expected to grab a user’s attention by expanding out of the news feed into webpage real estate in both the left and right columns — or rails — of the screen. Facebook is also working on a way to ensure that the video ads stand out on the mobile apps as well,” said AdAge reporter Jason Del Rey, citing television industry executives.

Hopefully, the implementation of these video ads will be less obnoxious than what is being proposed. An inescapable ad inside a Hulu video is something web users have come to expect. A forced interruption of the News Feed, however, sounds like cause for Facebook users to revolt.

Even AdAge’s industry executives, who’ve reportedly seen the units in action, are fearful of the repercussions, particularly regarding the autoplay functionality. “There could be serious outrage,” one person said.

Old television image via Shutterstock

Nobody likes pre-roll video ads — generally, they just seem to be an annoyance that gets between you and the viral cat video you’re dying to see. Opt-in video ads, or ads you choose to watch in exchange for a reward, are proving to be a far better alternative to typical pre-rolls, according to social video ad company Jun Group.

In terms of video completion and engagement rates, opt-in video ads see 98 percent and 3.5 percent respectively, while industry averages are just 64 percent and 1.2 percent, Jun Group says.

To show just where the new ad format is going, Jun Group released a report today based on 7.7 million opt-in video ad views made between May and August of this year. And for Facebook, the company’s data could mean trouble ahead.

Jun Group found that Facebook engagement fell 9 percent over the year, while advertiser website visits shot up by more than 20 percent. In particular, consumers are using website features like store locators and coupons. Facebook remains the most popular form of interaction, with 31 percent of overall engagement, but advertiser site visits are now nipping at the social network’s heels, with 28 percent.

“We’re excited about [the move towards advertiser website engagement] because to us, that’s what’s meaningful to our brand customers,” Jun Group CEO Mitchell Reichgut told VentureBeat in an interview last week.

But he noted that some of the results from the report, the third Jun Group has released so far, are counterintuitive. In particular, the company found that long ads don’t perform that much worse than short ads — even though Jun Group last year said that shorter ads were better. 87 percent of consumers watch full two-minute ads, compared to 98 percent who complete 30 second ads (minute-long ads get around 92 percent completion). Surprisingly, two-minute ads were the most viewed of Jun Group’s videos at 37 percent, and minute-long videos accounted for 33 percent. Meanwhile, short 15-second ads were the lowest at 6 percent.

“It’s much more important to target people properly … when you do that, and you’re in this environment that they’re opting in, you can tell a long story,” Reichgut said.

Targeting also leads to higher consumer engagement, according to the study. When a video ad asked a pre-screening question like “Do you own a cat?” consumers interacted with brands more by 13 percent.

Squashing the belief that you need to create ad content specifically for the web, or God forbid, try to go viral, Reichgut also pointed out that it doesn’t actually matter if brands reused television ads on the web. Both saw engagement levels that were incredibly similar (and TV ads even performed slightly better).

In terms of demographics, Jun Group’s study also found that people between the ages of 18 and 34 were the least likely to engage with ads.

Laptop outdoors photo via Shutterstock

Birst raises $26M for big data

Big data startup Birst has raised $26 million in its fourth round of funding, with a goal accelerating growth and product development. The company provides business intelligence software and competes with QlikTech, SAP, IBM, Oracle, GoodData, and Microstrategy. The new funding round was led by big dog VC firm Sequoia Capital with additional participation by prior investors Hummer Winblad and DAG Ventures.

Engrade moves to the front of the class with funding to keep teachers organized

Classroom management software company Engrade has closed a $3 million funding round. The company’s software helps teachers, administrators, and school boards keep track of students’ grades and progress reports. Rethink Education led the round, with NewSchools Venture Fund and private investors Greg Gunn, Zac Zeitlin, and Richard Chino.

Flingo grabs another investment, mere months after its last one

Smart TV app maker Flingo has received another $1 million in funding from entrepreneur Mark Cuban, bringing its total first round to $8 million. Flingo has developed a technology, dubbed SyncApps, that can detect what you’re watching in just a few seconds and communicate that information to your television, smartphone, or computer.

Datasift secures $7.2M investment

DataSift, a social data platform that extracts large amounts of data from a number of online sources, raised $7.2 million. Essentially its services help understand the impact of social media marketing techniques employed by business. Existing investors IA Ventures and GRP Partners led the round.

App security startup Appthority gets a $6.25M boost

App security company Appthority has raised $6.25 million. The company works to prevent potential apps with malware, location tracking, and keystroke recording  from ending up on your smartphone. US Venture Partners and Venrock led the funding.

Vungle Raises $2M seed round

Mobile advertising company Vungle has raised an impressive $2 million seed investment. The company creates ads in the form of video trailers for mobile applications. Big name VCs and angel investors Google Ventures, AOL Ventures, Crosslink Capital, Ron Conway, Dave McClure, Maynard Webb, Scott McNealy, and Tim Draper participated in the round.

McCann WorldGroup invests $4M in Israeli incubator

Media startup incubator Thetime has raised $4 million from investor McCann WorldGroup. Thetime is an Israel-based incubator for media companies looking to get guidance, funding, and new business ideas before they obtain a seed round. After seed funding, Thetime offers additional resources to help startups receive institutional funding. McCann WorldGroup gets a 15 percent stake in Thetime for its investment.

Collaboration software startup Blueprint raises $15.9M

Blueprint has raised $15.9 million to help with software development project management. The company helps business people and software developers, working for the same companies, set goals for software and app development projects. It then manages the work for each project, helping each department communicate effectively. New investor Tandem Expansion Fund led the round, with the participation of existing investors from BDC IT Venture Fund, Walsingham Partners Fund, and several private investors.

Reading child against numbers background image via Shutterstock and Flickr

BrightRoll is a video advertising network that boasts over 70 million unique viewers per month, which is more than Hulu, ABC, CBS, FOX and NBC combined. Its service allows clients to run and monitor multiple video ad campaigns across several mobile and web platforms. BrightRoll currently manages 2.25 billion video ads per month, or nearly 1 out of every 3 U.S. video ads served, according to the company.

BrightRoll is in a good position because its inventory of video ads is much larger than that of content publishers — enabling the startup to steal business away from those publishers.

The company said it plans to use the new capital to grow its mobile advertising business as well as its international business.

The new round was led by Trident Capital, with additional participation from True Ventures, Scale Venture Partners and Adams Street Partners all participated, as did Comerica Bank. As part of the funding deal, Trident Capital Senior Managing Director Evangelos Simoudis will be joining the BrightRoll board of directors.

Founded in 2006, the San Francisco-based startup previously secured $10 million investment in February 2010. The company has a total of $46 million in funding to date. BrightRoll faces direct competition from Tremor Media.

Deerfield, Fla.-based Intergi finds advertisers for more than 300 game publishers that post their titles on the web. Those publishers have more than 64 million users a month. Intergi specializes in tailored and integrated ad campaigns. That means it can find lots of ads to plug into videos. With Playwire, Intergi is creating a platform that simplifies the process of making money with online video ads for the under-served “long tail” of the market, or small-demand items that add up to a lot over time.

Many people who publish video on the internet never make money from video ads. But Intergi hopes to change that. Playwire uses a free Bolt open source video player that can deliver high-definition video. Playwire supports more than 100 video formats and can stream video to mobile devices. It also has a built-in ad server. Playwire also includes everything else people need to publish videos online: encoding, hosting, content management, analytics, syndication, and monetization. Publishers pay for this infrastructure only as they make money.

Jayson Dubin, chief executive of Intergi Entertainment, says that advertisers shouldn’t ignore the long tail of content publishers who can reach a lot more people now thanks to the internet. “No one has ever really tried to reach this customer base,” Dubin said.

Playwire’s launch partners include Adap.tv, Adobe, Amazon web services, AOL, BrightRoll, Google, Specific Media, Tidal TV and Tremor Media/ScanScout.

Other video platforms often require video publishers to sign up for contracts, where the videos have to get minimum views to make any money. That has stopped a lot of small businesses from signing up. Playwire’s “pay as you go” business model allows publishers to get up and running quickly without paying upfront money. Publishers only pay for the storage they use each month and the more they use, the less they pay.

Rivals include Ooyala, Brightcove, YouTube, Kaltura and others. Dubin said Playwire is starting out small, with 500 beta testers now. Within a year, he will be happy if there are 5,000 to 10,000 publishers using the service. Intergi was founded in 2007 and has 20 employees. The company is self-funded.