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Article from SFGate.

“Here’s a mind-numbing stat: Americans spent a total of 53.5 billion minutes on Facebook in May, according to a new Nielsen study released Monday.

In fact, the media-measurement firm’s new report on social networking found that Americans spent more time on Facebook than on any other website – and it wasn’t even close. Yahoo was second with 17.2 billion minutes in May and Google ranked third at 12.5 billion minutes.

With Americans now spending nearly one-quarter of their overall Internet time on social networks and blogs, Nielsen said the results show “how powerful this influence is on consumer behavior, both online and off.”

“Whether it’s a brand icon inviting consumers to connect with a company on LinkedIn, a news ticker promoting an anchor’s Twitter handle or an advertisement asking a consumer to ‘Like’ a product on Facebook, people are constantly being driven to social media,” said Nielsen’s first-ever State of the Media report to focus on social networking.

The report took a snapshot of online activity during May and found nearly 4 of every 5 active U.S. Internet users went to social-networking and blogging sites, accounting for 22.5 percent of the total amount of minutes people spent online. Online gaming was next with 9.8 percent, followed by e-mail at 7.6 percent.

In the social-networking and blogging category, Palo Alto’s Facebook was the runaway leader with 140 million unique visitors during the month, with Google’s Blogger blogging platform a distant second with 50 million unique visitors spending about 723 million minutes.

But the up-and-coming blogging platform Tumblr was third with 623 million minutes, edging out both San Francisco microblogging service Twitter Inc. with 565 million minutes and the professional social network LinkedIn Corp. of Mountain View, which had 325 million. Nielsen said New York’s Tumblr Inc. has nearly tripled its audience since May 2010 and is now “an emerging player in social media.”

Also, the report said 70 percent of all adult social-network users shop online. But 60 percent of social-network denizens create reviews of products or services, making them more likely to be influential for online and offline purchases.

And compared with average Internet users, social networkers are 26 percent more likely to post their political opinions, 33 percent more likely to say what they like or don’t like on television and 75 percent more likely to spend heavily on music.

Other Nielsen findings include:

— The profile of the most active social-network user is of a woman of Asian/Pacific Islander descent between the ages of 18 and 34. The majority of social-network users are women, but men are more likely to visit LinkedIn.

— About 31 million people watched nearly 157 video streams on social networks or blogs in May. More women than men watched video this way, but men spent 9 percent more time watching those streams.

— While almost all social-media users access their networks by computer, a growing segment – about 37 percent – now do so with their mobile phones. More than twice the number of Internet users age 55 and older accessed social media on their phones than a year ago.”

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Here is an article from SF Gate.

“Susan Choe, head of the San Francisco-based online video-game startup Outspark Inc., figured she’d found the right strategy when a family of four spent $35,000 for virtual goods on her site.

“We actually called their bank to make sure they could afford it,” said Choe, 40, who serves as chief executive officer. “Apparently they can.”

Outspark offers free Internet games and then makes money by selling extras, such as $2 magic potions, $200 rings with special powers, and even $5 licenses that let players get married virtually (divorces are free). Several hundred families have now spent tens of thousands on the site.

The company is tapping into the so-called freemium model, where people play for free but shell out for premium features – an approach that is spreading to the United States after taking off in Asia. Outspark is relying on a different tack than Zynga Game Network Inc., the maker of freemium titles like FarmVille and Mafia Wars, by offering more involved games that coax individual users into paying bigger amounts.

The average paying Outspark customer spends about $55 a month, or as much as $400 during the life of a game. That compares with the $10 to $20 that paying customers typically spend monthly for a game like FarmVille, the most popular title on Facebook, said Atul Bagga, an analyst for ThinkEquity LLC in San Francisco.

Though most freemium players don’t spend a dime, the less than 5 percent of gamers who do buy items will generate revenue of $1.6 billion in the United States this year, said Justin Smith, founder of Inside Network, which tracks social games and virtual payments. That’s up 55 percent from last year.

“The virtual goods market will be a multibillion-dollar industry,” Smith said.

Outspark’s titles, such as Fiesta and Fists of Fu, rely on elaborate fantasy quests to keep players engaged. Customers also tend to be more hard-core gamers than those who play most Facebook games, meaning they’re more likely to spend money enhancing their characters or improving the chance of advancing.
Stiff competition

Outspark is competing for online gamers against larger companies, including makers of traditional video games. Electronic Arts Inc., the world’s second-largest game publisher, expanded into the market last year by buying Playfish Inc. for about $400 million. Last month, Walt Disney Co. agreed to buy Playdom Inc., another maker of online games, for $563.2 million.

Zynga, which is also based in San Francisco, leads the market for social-networking games. It may record more than $450 million in revenue this year selling virtual objects, ranging from tractors for FarmVille to machine guns for Mafia Wars, according to people familiar with the company.”

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