The success of virtual goods has enabled innovative business models in the categories of social networking, virtual worlds and free online game sites. This phenomenon was analyzed with its relationship to companies and celebrities in the “Branded Virtual Goods Market Report” for July 2010 from social gaming platform Viximo and virtual goods platform Virtual Greats. Revenue for branded virtual goods (BVG) is predicted to rise to $318 million by 2015, a stark increase from the current $16 million industry it is this year. While only a subset of the general virutal goods market, BVG is positioned as a more lucrative option for marketers and virtual platform developers.

A case study contained in the report covers the performance of items that were Snoop Dogg-branded. These items have appeared on WeeWorld, where they perform 2.5 times higher than the highest-selling, non-branded, similarly priced items. As quoted in the report, Snoop Dogg explains, “My virutal items are off tha chain jacc! It’s a world and a movement that I have been down with since day 1 and we are gonna continue to hit u with hot products and virtual items until tha wheels fall off. Be on da lookout for more items in an internet hood near u - ya dig?!?”

Growth as illustrated in the case study will be driven by super brands into the market, such as Disney’s acquisition of Club Penguin. Increased media interest will improve visibility for unconnected audiences, improving adoption. Another trend will be functional virtual goods. These items will need to have some sort of game-enhancing functionalities, or preferred behavior. “For example, Nike partnered with Gaia Online and offered Nike-branded sneakers that not only acted as a status symbol or avatar enhancer, but also enabled the wearer to run faster than other players in the virtual world.” As the market matures, these goods must stay relevant by having some effect other than as vanity items.

News sharing site Digg was undermined by fringe groups of conservative news manipulators for over a year before the story broke yesterday.These users frequently buried news deemed “too left-leaning” by the group, ensuring that this news was effectively removed from the site.

The San Francisco startup, founded by Kevin Rose, was responsible for shaping the now commonplace practice of forwarding articles to social networks, as well as popularizing stories on their front page by “Digging” the stories using a bookmarklet. The “most dugg” stories were often different than what one would commonly find on a more mainstream news portal, as frequent users often skewed more towards technology, liberal views and of course, stories about Digg.com and its staff.

The flipside of the “Digg” action is “Bury,” which the influential conservative Digg members in question exploited, according to Alternet, by means of “multiple accounts, upvote padding, and deliberately trying to ban progressives.” These practices disproportionately affected popular stories on the Digg page, but also trickled down to driven traffic to news source sites. This is not a small effect - Digg is ranked fiftieth among US Web sites by Alexa, likely has three million users and generates around 25 million page views per month (all Alternet numbers).These tremendous shifts in bandwidth usage and page views have overwhelmed Web sites with the “Digg effect.”

A year of undercover investigation connected to author Oleoleolson exposed these groups, now referred to as “bury brigades.” One conservative group, who calls themselves the “Digg Patriots,” buried over ninety percent of certain users and Web sites’ articles. Along with political articles, these groups target other subjects including “education, homophobia, racism, science, the environment, economics, wealth disparity, world events, the media, green energy,” and articles critical of GOP, Tea Party and Fox News leaders.

A new Digg site is imminent, with various safeguards to help prevent undemocratic gaming of the system. For example, users can now follow individuals or publishers so that they will have access to trusted content whether or not their news items have been Dugg or Buried. CNET reports that they will shelve Bury functionality.

Touted as the first “social media magazine,” Flipboard for the Apple iPad launched yesterday and is currently available free on the iTunes store. Differentiating itself form standard social media and feed aggregators, the application connects to various networks like Facebook and Twitter, collects shared stories, images and videos, and reformats them into a magazine format.

In addition to pulling from friends and followers as media sources, the user can also specify popular news sources and curated categories from Flipboard itself for more content. These news categories are collections such as FlipStyle, FlipPhotos, FlipTech and the like. Though the media comes from disparate origins, the app creates an interface that seems consistent, with a page-flip navigation.

Flipboard has launched with much support - as reported by Mashable, the Palo Alto-based startup received $10.5 million in a Series A round with “including KPCB, Index Ventures, The Chernin Group, Jack Dorsey (Twitter’s creator), Dustin Moskovitz (Facebook’s co-founder) and Aston Kutcher.” Additionally, it acquired real-time Web intelligence startup Ellerdale. The co-founder of this company is now Flipboard’s CTO. Ellerdale’s semantic analysis technology was employed upon large-stream data to extract relevant and valuable information which will now be used as a relevancy engine for Flipboard.

With its release has come scaling issues, as CEO Mike McCue’s update letter explains. While users can download and use the app, browsing material that Flipboard has linked to. But due to maxed-out capacity, users are not able to setup their social networking connections. As of this morning, users are being invited in waves to connect their Facebook, etc. as the service becomes available.

While Facebook and Twitter are the only currently supported social networks, McCue does mention that they plan on incorporating Flickr and LinkedIn in the future on Kara Swisher’s BoomTown interview

In order to grow their social networking presence and strengthen their audience of potential customers, companies must know how to elicit the aid of internet users, believes Pixazza.

The company is launching an online service that crowdsources marketing. Their tool allows companies to renumerate “publishers” who tag photos of products on personal sites.

“With this tool, any internet user can transform static images into content that is useful for the brand, while at the same time profiting financially from the action,” the company says.

“The main goal is to put the consumer at the heart of the process,” web marketing consultant Laurent Dijoux told L’Atelier.

Having the consumer in this position allows brands to lessen marketing’s intrusiveness, while at the same time entering the privileged space of the consumer. In this case, users sign up on Pixazza’s online platform, receiving a code that they embed on their own sites. The code allows them access to a widget with which they can tag their photos. The tag brings up a product page when users mouse over the image.

The publisher is paid according to the ranking of their tagged products.

“This tool can only be used in certain cases,” Dijoux said. “Especially in terms of social engagement: the brand needs to work with users and engage them in a conversation.”

Outside of legal considerations, which must be expressly stated, it is also important to track usage to see what objects are tagged, and to see if they fit well with the brand’s product needs.

This week, Pixazza announced that it had raised $12 million in Series B funding from Shasta Ventures, August Capital, CMEA Capital and Google Ventures.

SocialShield wants to protect your child from the "new Wild West of the Internet" that is social networking. With dangerous elements including cyberbullies and sexual predators, the San Mateo-based activity monitoring system for parents offers tools to keep children safe from others, and from their own sharing decisions. The service provides live support and reputation management assistance.

The setup process begins with a subscription fee, or the free trial, and then directly connecting to childrens’ Facebook, MySpace and Twitter accounts by using their passwords. If a parent does not know or would prefer not to use a child’s passwords, SocialShield can instead send an invite email to the child with directions so that he or she can verify the parent, but they recommend knowing passwords. As their FAQ explains, "It is good parenting practice to know your kids’ passwords, even if you don’t use them to connect with us. Many parents actually set the passwords for their kids in every instance one is required so that they (their kids) cannot change them. In the unlikely event that something happens to your kids, having their passwords will dramatically help authorities expedite their investigations."

Once these steps have been completed, SocialShield watches out for any potentially problematic events. Flags are raised when a variety of actions take place:

• An adult befriends the child
• A new friend is added that has no friends in common with the child’s other friends
• A new friend is found to have an account on other sites that children typically do not become a member of - for example, a professional site like LinkedIn
• Other determinations based on patent-pending techniques and other heuristic analyses

These flags only notify the parent, and do not block or remove the suspicious individual. It is still up to the parent to talk to the child or delete people from the child’s account.

The site can also aid in cyberbullying identification, as well as notify a parent of inappropriate images or other material that a child puts up himself. These include offensive comments, as well as media that could potentially damage a child’s future - job or college acceptance, etc.

Findings were released from the American City Business Journals’ June survey via PRNewswire on how small and medium business owners are using the Internet to promote their businesses. By using a variety of Internet applications, these business owners are travel planning, researching and buying business products and services, accessing business news, and keeping in touch with friends and colleagues.

Regarding Internet usage trends for these SMB owners, online interaction leads to greater success, broken down by segments of business owners. These segments are transactors, investors, interactors, commentators and viewers, the first three most likely to capitalize upon the strengths of the Internet.

Interactors spend 2.5 hours per week on the Internet for reading news, researching and purchasing, connecting with colleagues and studying competition. They spend the most time online of the segments, but are the most effective of the group - they make up only fifteen percent of the survey population, but 24 percent of sales.

Investors spend less time on the Internet, with moderate engagement in above online activities, but less social networking. They make up 22 percent of SMB owners and 23 percent of sales. Investors have the highest net worth and largest investment portfolios.

Transactors make up one quarter of business owners and sell fifty percent of products or services on the Internet, the highest online sales segment. They account for 29 percent of general sales.

Commentators and Viewers account for the least percentage of sales. Seventeen percent are commentators and achieve fourteen percent of sales, while 21 percent are classified as Viewers and account for ten percent of sales.

Commentators work the longest hours and represent a higher percentage of women- and minority- owned businesses. They work mostly "on their own blogs or posting responses to others, work out of the office the most but use the Internet the least to buy or sell businesses and services."

Viewers consume more media than the other categories, own the smallest companies and spend the least time on the Internet, mostly on blogs, YouTube and HDTV.

Everyone knows that social networking in the office is a series of gray areas wrapped around uncertainty. It’s good, it’s bad – depending on who you talk to. It’s definitely something that businesses have to think about, even though many of them have no official policies in place.

Facebook accounts for 6.8 percent of business traffic, according to figures by managed security company Network Box, which analyzed 13 billion URLs visited by businesses in Q1 2010. Ten percent of business broadband is spent on YouTube videos, and 4.5 percent of business bandwidth is used by Facebook.

The use of both of these, unsurprisingly, is up: Facebook use at work is up one percent over the last quarter of 2009; YouTube watching, 2 percent.

Of course, outside of potential productivity loss, the main concern with the use of social media in the worlplace is the security risk involved. People still don’t seem to get that malware lurks in Facebook apps. For forty-three percent of IT managers, this is the biggest concern.

“The figures show that IT managers are right to be concerned about the amount of social network use at work,” said Simon Heron, internet security analyst for Network Box.

“There are two real concerns here: firstly that employees will be downloading applications from social networks and putting security at risk; and secondly the amount of corporate bandwidth that appears to be being used for non-corporate activity,”

According to Nielsen, 47 percent of Americans visit Facebook daily, which is nearly as many who watch TV daily (55 percent).

Marketers are enhancing their email marketing campaigns with social media rather than replacing them, a report shows. The fourth annual Email Marketing Industry Census from Econsultancy and Adestra was released last week, tracking how marketers are using emails to interact with customers.

More companies are using email to encourage customers to share content on social networks, as well as to promote customer ratings and reviews. Budgeting for email marketing is up from last year, and most companies rate email as a great return on investment.

But much difficulty is documented for these companies to send messages that are relevant, as well as craft them so that they actually land in the customer’s inbox. Despite more adoption of email list services (over fifty percent), too many organizations are not paying enough attention to list quality.

• Only 56 percent of companies are using opt-in (43%) or confirmed opt-in (13%) data for their acquisition emails
• Only 60 percent are using opt-in (39%) or confirmed opt-in (21%) data for their retention emails
• Quality of database is cited as a problem for 61 percent of marketers
• List/data quality is a top-three priority in 2010 for only 32 percent of company respondents

“Companies must take care to focus on the relevance of their email in a world where it is becoming increasingly important for brands to demonstrate value, rather than bombarding people with unwanted messages,” says Linus Gregoriadis, Research Director at Econsultancy in the Adestra blog. “Sophisticated segmentation and effective list-cleansing are more important than ever.”

• 39 percent do not understand their ROI from email
• Of those who do, five percent more than last year report over 500 percent ROI
• Most companies do carry out basic segmentation (80%) and regular list-cleansing practices (58%)
• Only seventeen percent have managed to fully integrate their email marketing with other sales and marketing activities, the same as last year.

A University of Massachusetts, Dartmouth Center for Marketing Research study on Fortune 500 Companies social media usage show how the largest corporations of the United States use blogging and Twitter to create a public online presence. This study, "The Fortune 500 and Social Media: A Longitudinal Study of Blogging and Twitter Usage by America’s Largest Companies," was conducted by Nora Ganim Barnes, Ph.D. and Eric Mattson, CEO of Financial Insite.

Of the Fortune 500 of 2009, 22 percent of the corporations (108 altogether) had a public blog with a post in the last twelve months, their criteria for the analysis. In 2008, only 81 companies, or sixteen percent, had qualifying blogs. Of the top five this year, only three had blogs: Wal-Mart, Chevron and General Electric. The remaining two that did not are Exxon/Mobil and Conoco Philips.

The 108 corporations of 2009 represent a cross-section of the industries with the greatest blog presence. The distribution of these industries from the last two documented years follow (2008 vs 2009):

• Computer Software, Peripherals, Office Equipment: eight versus eleven
• Specialty Retail: four versus seven
• Telecommunications: five versus six
• Food Production, Services and Drug Stores: five versus six
• Commercial Banks: four versus five
• Insurance: four versus five
• Semiconductors: four versus five
• Motor Vehicle: four for both years
• Information Technology: three versus four

93 (86%) are linked directly to a corporate Twitter account, more than three times as many as members of the 2008 list. Many more of these corporations have Twitter accounts, but do not have a link from their blog to it. Either way, 173 (35 percent) have used the service for their corporation in the thirty days before the survey took place.

While the number of blogs from Fortune 500 corporations has risen from 2008 to 2009, they are much lower than the Inc. 500 numbers. While 22 percent of the Fortune 500 have qualifying blogs, 45 percent of the Inc. 500 do.

Officially announced today, Google Buzz is an integrated Gmail feature that brings Twitter-like functionality to one of the more popular Webmail services. At the Google Event this morning, the announcement team showed how Buzz is for conversation and updates as well as sharing images and videos.

The Gmail Blog explains that the service is all about real-time, social sharing. As the service rolls-out to more Gmail members, users will find that they are automatically following the people that they email and chat with the most. Conveniently, Buzz also connects with Picasa, Flickr, Google Reader and Twitter.

For anyone who has been using the real-time features of Twitter or Facebook status updates, Buzz is the same suit in a different color. The service even uses Twitter’s signature @replies to send updates directly to a contact’s inbox. A few more subtle options set it slightly apart.

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