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So, Facebook is now public, and it got off to the most unimaginable and inauspicious start, losing $4 between the NASDAQ’s opening and closing bells.

But don’t go jumping out any windows just yet.

There’s no question that the IPO defied expectations in the worst way possible (well, perhaps not the worst), offering at $38 and closing just a few cents higher at $38.37. Even our more conservative sources thought trading would close in the low $40s.

But while the numbers are, as one candid entrepreneur expressed it, “a total crapshoot,” almost everyone we spoke to was quick to point out that both Facebook’s revenues and its stock price are still very much in their infancy.

“This is an eight-year-old company,” pointed out Rebecca Lieb, an Altimeter Group analyst. “When Google went public, they had only recently developed ad products. Facebook is at the beginning of mobile products, advertising products — and it hasn’t even started with commerce products.”

“Facebook has just scratched the surface of its revenue and advertising,” said Menlo Ventures managing director Mark Siegel. “They’re going to grow with a much more diverse income stream than what they have today.”

Siegel, who bought shares today and said he plans to hang onto them, concluded, “I think Facebook is a good long-term investment.”

Facebook’s shaky standing with advertisers has been troubling, especially as one high-profile advertiser packed up and went home just days before the IPO.

This move and related stats prompted highly unfavorable statements from experts. For example, Pace University marketing professor Larry Chiagouris said, “The Facebook IPO is … likely to be a disappointment to all the new investors. This is because its real financial value is tied to its marketing value, and the marketing community is increasingly recognizing that Facebook is of very limited value as a marketing tactic.”

But Lieb said a lot of the angst around Facebook’s ad performance has to do with the fact that agencies and marketers are still figuring out how to use Facebook’s tools.

“It’s a completely different form of online advertising,” Lieb said, stating that Google’s ad network had previously defined a search-based paradigm for online advertising. But as we shift from search-based online behavior to social networking, she said, “Advertisers still have to figure out how to work in these environments. It’s not just about a display ad.

“It’s a brand new form of advertising and marketing, but I don’t think it’s at all mature yet,” the analyst concluded.

While advertisers need to do better at making Facebook marketing work, Facebook needs to do better at indicating to brands, investors, and the public where its revenue is going to come from.

“Facebook will crash and burn unless the company can better communicate where it is going with its business,” said investor relations communications expert Jeff Corbin. “The people who will suffer will be those caught up in the frenzy and purchase Facebook stock [today] at what will probably be a high.”

Still, every social media expert between here and Timbuktu has come forward with thoughtful and creative ways for Facebook to make money. All Facebook has to do now is figure out how to capitalize on at least one of them without compromising users’ data and privacy, thus losing the userbase that makes Facebook value in the first place.

“Facebook is a highly creative and deeply resourced company that has the potential to develop wonderful products,” said Lieb.

“Are they gonna do it? We hope so.”

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In addition to being one of the largest initial public offerings ever, Facebook’s IPO drew so much interest that the system couldn’t keep up with demand.

Facebook expected to make its public debut at 8 a.m. PT this morning, but trading took an extra half-hour to get underway. While details weren’t provided, Bloomberg was able to confirm that NASDAQ was experiencing a delay.

The Wall Street Journal reported that traders were unable to confirm changes or cancellations made to Facebook orders as early as 4:30 a.m. PT. Once trading did begin, traders were unable to get a confirmation on if they got the stock at the intended price. These glitches ended up putting the social network giant’s stock price into a slump, which caused a sinking reaction among other tech stocks.

It’s possible the glitches were due to the extremely large volume of trades — over 460 million shares traded (with nearly half of those happening within the first two hours). NASDAQ was unavailable for comment about the glitches at the time of publication.

So lets recap: Facebook’s IPO was one of the largest ever, generated so much activity the system couldn’t keep up, and caused other industry stocks to mimic its behavior. However, all that demand didn’t translate to a great first day for the stock, which closed at $38.06, down $4 from where it opened.

But the company’s largest stakeholder and chief executive showing up to the bell ringing in a hoodie rather than stuffy business attire? That was no big deal. (To test this theory, Twitter’s largest shareholders should wear Jedi robes and plastic light sabers when it goes public.)

Photo via NASDAQ live feed video

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Leave it up to Next Media Animation, the Taiwanese firm known for its wacky news videos, to create the only Facebook IPO wrap-up that’s actually worth watching.

Sure, this Facebook wrap-up features a dead-eyed Zuckerberg riding the Wall Street bull and mowing down investors, but hey, at least they got the numbers right. As a bonus, you can also see Google’s co-founders taking a ride on a space elevator.

Facebook opened up trading at $42 this morning after pricing its stock at $38 last night. The stock didn’t go up much throughout the day, and it slowly fell to just $38.06 by the end of trading today. That didn’t surprise Wall Street analysts, as we’ve reported, but it may have come as a shock to Silicon Valley insiders who expected the stock to blow up today.

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Facebook released the amount of shares allocated to each of its underwriters today, following its less-than-stellar IPO day.

The company went public on the Nasdaq to an EKG-like performance, ending in a .38 cent gain today. The update came in an amendment to the company’s prospectus following the close of the market. Along with Facebook’s tumultuous trading, a number of other tech companies’ share prices fell today, including Zynga’s which had to be halted.

The total number of shares allocated to underwriters amounted to 421,233,615, with Morgan Stanley leading the group with 162,174,942 shares now worth over six billion dollars. Morgan Stanley was followed by J.P. Morgan, Goldman Sachs, Merrill Lynch, and Barclays.

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Buying its way into social commerce, Facebook has acquired mobile gifting app Karma for an undisclosed sum.

“We’re thrilled to announce that Karma has been acquired by Facebook. The service that Karma provides will continue to operate in full force,” the Karma team announced in a blog post late Friday.

San Francisco-based Karma offers an intelligent way to get ideas and send gifts to friends and family members. It pulls in data from Facebook to determine demographic information and recommend the most appropriate gifts for your loved ones.

The service, launched in February on iPhone and Android, is just months old, meaning that something about the company’s gifting technology or mobile appeal really hit a nerve with Facebook.

VentureBeat writer Jolie O’Dell was thoroughly impressed with Karma when she covered the company’s recent launch. “The design of the app itself is masterful; it’s a joy to look at and a pleasure to use,” she wrote. “But more important than the façade is the architecture of the content. Each gift you’ll find on Karma was hand-selected, tested by curators, and photographed and reviewed by the Karma team.”

Of course, the acquisition underscores Facebook’s dire need to monetize its 488 million monthly active users on mobile. The apps, which come with baked-in money-making potential, could provide the social network with an important new revenue stream.

“We’ve been really impressed with the Karma team and all they accomplished in such a short time,” a Facebook spokesperson said in a statement. “This acquisition combines Karma’s passion and innovative mobile app with Facebook’s platform to help people connect and share in new and meaningful ways.”

Before being acquired by Facebook, Karma raised $4.5 million in funding from firms and Angels, including Sequoia Capital, Kleiner Perkins, and Twitter founders Biz Stone and Ev Williams’ Obvious Fund.

The deal closed Friday and was announced after market close on Facebook’s first day of trading.

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At the end of Facebook’s first day of public trading, its shares were selling for around 9.5 percent less than their opening price.

By the time the closing bell rang, the stock ticker symbol FB sat at $38.37, according to NASDAQ’s final stats, down from its $42 opening price and about even with its original offering price of $38.

Analysts who had previously been bullish on Facebook are surprised. Early investors are disappointed. And social media enthusiasts are at least somewhat shocked.

“Our Private Shares Group traded stock the week before the first S-1 at $45, and we did a lot of volume. The market clearly supported a share price in the $40s,” said Michael Pachter, managing director for equity research at Wedbush Securities.

“But Facebook showed a sequential decline in revenue in Q1, so it is likely that some investors were spooked and began to question the company’s growth prospects,” he continued.

“I have a $44 one-year price target, so it’s a great investment below that level, not as good an investment above that level.”

Calling the $38 price “fair,” Dunn & Bradstreet tech expert Lee Simmons said before the closing bell, “Facebook was less likely to rocket out of the gates on opening day… My educated guess places Facebook comfortably above the top-end of its price range on Friday.”

Still, touting the site’s billion-strong userbase, investors are pegging Facebook stock as a good bet for the long haul.

“I think it is a good long-term investment,” said Mark Siegel, managing partner at Menlo Ventures. “The nature of the product itself makes it difficult to be displaced … I think it’s that kind of a core, bellwether company in a tech sector. It’s gotten there remarkably fast, but it’s there.”

However, Siegel noted he expected short-term “volatility” in Facebook’s performance and said there is “no way, not a chance” it would see the eight-fold growth that competitor Google has had since its 2004 IPO.

“There’s going to be a lot of crazy demand by people, but I don’t think it’s going to get to $60 [any time soon],” the VC continued. “In the next couple of years, it might trade at $60 per share, but … I think institutional investors would start getting heartburn before it got up that high.”

But this low closing price isn’t necessarily a bad thing for Facebook, points out Gartner analyst Ray Valdez.

“Well-managed IPOs reward initial sellers (early investors and the company itself) with robust prices that don’t leave too much money on the table,” he said.

“Facebook’s revenue model is still a work in progress. The mobile sector will remain a challenge for Facebook in the short-term. Over the long-term, Facebook has a good chance of cracking the code of monetizing user engagement across platforms, but accomplishing this will require significant innovation in both business and technology domains.”

David-Michel Davies, president of The Webby Awards and co-founder of Internet Week New York, had the honor of ringing the closing bell at the NASDAQ stock exchange. “There’s been a huge focus on … what this means for the future of the web and what this means for other IPOs,” he told us in a phone conversation.

And despite the social network’s inauspicious debut, Davies and millions like him remain optimistic about the future of Facebook and of other, smaller social media companies.

“At the end of the day, it’s hard to overstate how important social is to the web. We’re living in a world where people have changed behaviors in a significant way. People now will start their day in a social environment and make a lot of important decisions for their life there — what to buy, what to eat, where to go at night, what books to read.

“It’s a really big change, and it’s not going away. … This is definitely a big moment, and this IPO showcases how big that change is.”

We’re honoring FB at the Webbies on Monday. … It won the Webby for people’s vote for social change.

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Is it just me, or does it feel like the “future” we all see in TV shows and movies is getting closer and closer to reality? A team of researchers at MIT have created a small atmosphere, the ZeroN, where you can interact with objects floating in your own space. This could be the potential birth of a live user interface where we can touch, instruct, and play with objects and images in the air.

Lee, who researches with MIT’s Tangible Media Group, created the ZeroN, a small, unenclosed space that uses electromagnets to suspend a ball in mid-air. The ball (and the space holding it) can remember a human’s touch and mimic the movement in space. The ball can also move along per-programmed paths that are fed to the magnet and the machine holding the magnet using software.

“Even if the user moves the ZeroN to a different position, the system can re-stabilize and keep the ZeroN suspended,” said researcher Jihna Lee said in a video about the ZeroN

It can also act as a camera, recording 3D objects in its space, as well as work with a light source, showing how shadows would exist in real life on small models.

The magnet moves the ball, pulling and repelling it dependent on where it is commanded to go. The whole system exists on an arm that moves the magnet up and down and side to side, increasing the distance it can travel. The researchers used a “hall sensor,” which is constantly checking the ball’s position to record its movements.

“Our body and minds have developed great capacities for understand and manipulating physical environments,” said Lee. “The long-term vision is to embed computation and physical materials that can directly interact with us. In this way, we seek to redefine the relationships humans have with materials, space and digital information.”

The design industry could benefit from the technology, being able to build and interact with 3D models that can move and be manipulated without having to program it first into a computer. And as FastCo.Design points out, it could lead to even cooler inventions such as floating holograms that we can wrap around our arms and move in mid-air like Ironman.

Check out a video of the technology below. It’ll basically blow your mind.

via FastCo.Design

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It’s official: Facebook is a public company.

With all the hype around Facebook’s big day and the obsession with who’s-getting-rich numbers, its easy to forget to that we’ve had a front row view of Facebook’s ascendance to $38 a share, thanks to trading activity on secondary markets. One such market, SecondMarket, reminds us all of the social network’s humble beginnings with an illustrative timeline spanning the past four years.

“[Secondary markets] played a very important role in determining the ultimate price,” Sterne Agee senior analyst Arvind Bhatia told VentureBeat. “Facebook knew where the stock price was, and knew that there was appetite at those levels.”

Taking a nostalgic cue from Facebook Timeline, SecondMarket’s timeline takes us all the way back to April 2008 when the company was first contacted by a former Facebooker looking to offload shares and gain liquidity. It then walks us all the up until IPO day with a timeline of the Facebook’s historical pricing, acquisitions, and key product releases.

Back in 2008, Facebook was still four years away from going public, so would-be traders had little way of knowing that shares would add roughly $35 in value in the years ahead. In fact, it wasn’t until mid 2010 when the value of Facebook started to pick up, but by the end of the year Facebook was trading at $21.32 a share with a $49 billion valuation.

SecondMarket’s timeline even includes a breakdown of sellers and buyers by type and location. For instance, 86.4 percent of SecondMarket sellers were former Facebook employees, 27.5 percent of buyers were asset managers, and another 27.5 percent hedge fund buyers.

Now that Facebook is in Wall Street hands, we wonder: Can Facebook be cool as a public company?

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Mark Zuckerberg and his current employees aren’t the only ones making it big in Silicon Valley today. Former Facebook employees who have struck out on their own and started companies — referred to as the Facebook Mafia — have collectively raised a total of $271 million in funding since 2006, according to a report from venture capital database CB Insights.

In the first five months of 2012, Facebook Mafia companies have raised $130 million. That translates to a 137 percent increase over 2011′s funding totals.

Greylock Partners, an early investor in Facebook, has invested in three startups founded by former Facebook companies, making it the most active VC for the Facebook Mafia. Other Facebook Mafia investors include big names such as Benchmark Capital, First Round Ventures, and SV Angel. CB Insights reports 67 different investors have given capital to at least one Facebook Mafia company.

The Facebook Mafia includes Path founder Dave Morin; Quora founders Adam D’Angelo and Charlie Cheever; Dustin Moskovitz, who started Asana; and Ruchi Sanghvi, Facebook’s first women engineer who left the copany to start Cove. Quora just raised a $50 million investment, showing that funding for Facebook alumni companies is alive and well.

Now that Facebook has begun trading on the public market, you can bet there will be more Facebook employees cashing in and starting their own companies. If the funding growth from 2012 is any indication, investors will be keen on throwing more money at startups that emerge from the hacker-focused company.

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If you follow VentureBeat but don’t regularly check our GamesBeat site, here’s a list of the best games stories we ran over the last seven days that you may have missed.

This week, Diablo III launched and promptly caused a stir with persistent server issues, Activision and Electronic Arts settled over the Infinity Ward lawsuit, and former N-Control sales specialist Paul Christoforo revealed details in his lawsuit over the Avenger controller debacle.

You’ll also find reviews for Max Payne 3 and Game of Thrones, as well as a preview for Zombie Swipeout. GamesBeat’s guide to Minecraft: Xbox 360 Edition is also available.

Other GamesBeat stories included:

The DeanBeat: Can Microsoft’s Kinect gain cred from hardcore gamers?

With Sly Cooper: Thieves in Time, Sony hopes to bring a classic character to the PS3

Slicing zombies and chasing coins in Zombie Swipeout (preview)

Epic unveils Unreal Engine 4 for eye-popping next-generation game graphics

Aeria Games’ Ignite service connects free-to-play gamers in over 30 countries

Tony Hawk’s Pro Skater 3 stages coming to HD remake

Activision and EA settle Infinity Ward lawsuit

Ratings board wants parents to think twice before buying that video game

God of War Ascension multiplayer features over-the-top show-off killings

New DC Universe Online expansion on the way, Mark Hamill returning as the Joker

Max Payne 3 suffers multiplayer issues, Rockstar responds

Minecraft digs upwards and becomes most-played Xbox Live Arcade title

The Last of Us demo shows brutal, dramatic survivalist combat

Call of Duty co-founder reveals his new, free-to-play shooter

Gamers rip Diablo III a new hellhole on Metacritic

Max Payne 3 is a glimpse into the future of video games (review)

World exclusive Diablo III review!!!!

Game of Thrones brings the pain…and not in a good way (review)

How a lucky fan became an Uncharted character

Former N-control sales specialist Christoforo claims company threw him under the bus

Witcher dev CD Projekt Red hiring for “new and different” role-playing game

New Pokemon Black 2 and White 2 info

Minecraft (Xbox 360 Edition): Tips, tricks, and achievement guide

(Updated with new pictures) Student reveals the origins of his real-life Portal turret

VentureBeat:

Microsoft’s Kudo Tsunoda on broadening Kinect games to hardcore fans (interview)

The EA-Activision legal feud takes unexpected twists

6 reasons E3 might suck this year

Mobile startup Fun Machine believes games can do social good

CrowdStar expands into China and South Korea with mobile game partners

Conversion rates up, spending habits down among social gamers

Starting with a graphic novel, The Inventor will chronicle the life of Nikola Tesla (exclusive)

AMD contends its split-personality PC brains are better than Intel’s

Zynga acquires Wild Needle casual game maker for an estimated $3.8M

Nvidia teams with Intellectual Ventures to acquire patents

Walmart.com strikes again: more mind-boggling game descriptions

Former Xbox 360 exec’s $1B pain and advice to entrepreneurs

If Walmart.com’s horrible copy writers were to describe 2012′s biggest games…

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“A million dollars isn’t cool. You know what’s cool? A billion dollars,” Sean Parker says in the famous line from “The Social Network.”

Trite though the line may be, Facebook, valued at $104 billion, is in the process of minting billionaires and millionaires — and that’s pretty darn cool. But as a public company, Facebook is on the cusp of becoming so utterly unavoidable that it risks diving off the cliff of coolness into the waters of overexposure.

In talking with experts, analysts, and Facebook users on the topic of Facebook’s cool factor, we found two pretty distinct camps. Facebook is either fly enough to become the next Apple and maintain its allure as it takes over world, or it’s already years past its cool prime.

Let’s consider the arguments, shall we?

Facebook the trendsetter

Wearing white after Labor Day may be ill-advised, but there are a select few who can make this fashion “don’t” an unforgettable “do.” Does Facebook belong to the small pool of consumer technology companies that can wear white year-round?

I put the question to senior Sterne Agee analyst Arvind Bhatia who laughed at the notion that Facebook would lose any of its cool vibe by becoming a public company. “Apple didn’t stop being cool,” he said.

In fact, as Bhatia and a few of my friends pointed out, because Facebook has such an expansive user base who feel an emotional attachment to the platform, there’s a large population of regular Joes and Janes who believe so strongly in the company that they’ll become retail investors and buy shares in the company just because they know and love Facebook. For these people, Facebook’s offering will only increase its coolness, Bhatia said.

And then there’s Facebook’s “Hacker Way,” a company commitment to coding, risk-taking, and product-building that may clash with Wall Street’s expectations. Even CEO Mark Zuckerberg, as a strong-willed, hoodie-wearing youngster, appears indifferent to investors expectations. There’s something inherently cool about a company and its leader telling the world “f*ck it, we’ll do as we see fit,” and throw an all-night hackathon on the eve of the IPO.

Or, as Bhatia more eloquently put it, “Facebook, I believe, will move forward with its current strategy of putting the user first … Facebook will sacrifice short-term results for user experience.”

He’s not alone in his way of thinking. “I definitely still think it has a cool factor left … Facebook still has the young and hip edge,” Peter Adriaens, a professor of entrepreneurship at the University of Michigan’s Zell Lurie Institute for Entrepreneurial Studies, told VentureBeat.

Adriaens, just like Bhatia, likened Facebook to Apple, which maintains a design edge even after it transitioned out of hipster cafes and into the homes of the masses.

“I don’t think that Facebook is anywhere near to losing that cool edge as long as they keep innovating,” Adriaens said. “They’re buying companies that give them an edge … they’re willing to pay a premium for that cool factor.”

Facebook the uncool brand

In the opposite corner we have the naysayers. These people may still use Facebook — and we’ll get to that in a moment — but in their eyes, Facebook is about as cool as AOL and Yahoo. AOL and Yahoo, for those who need a reminder, are about as a hip as my dad at an Elton John concert.

“It became a big brand even before it went public,” a good friend told me in a private conversation on Path. “Being on Facebook is like being at Target.”

“There is no way Facebook can remain cool to everyone, as there’s no brand on the planet that does that,” Moor Insights & Strategy president and principal analyst Patrick Moorhead said. “Their strategy needs to force picking a core demographic, optimize for it, and do it without alienating non-core audiences.”

Crotchety, old Facebook was never cool to begin with, some of you said.

“Facebook is useful but I never think of it as ‘cool,” Rich Bucich told me on Facebook.

“I can’t remember the last time Facebook was cool. Was it ever?” Alex Kawas said.

You know what’s cool? Being a necessity

Maybe cool doesn’t matter that much. Earlier this week, Altimeter Group digital advertising and media analyst Rebecca Lieb told me flat out that Facebook is not cool.

“I don’t think Facebook is really that cool — in the same way that I don’t think your refrigerator is that cool,” she said. “But you don’t want to live without it.”

Facebook has achieved the impossible for a social network: It is now almost indispensable.

“It’s become part of people’s daily media consumption habits. Television isn’t cool. The radio isn’t cool. But people don’t want to live without these channels. And in a way it’s better not to be cool … but rather to be a necessity,” Lieb said. “I believe Facebook has achieved that status.”

Facebook will do just fine as a public company so long as it continues to improve the user experience and not alienate, creep out, or freak out users, Lieb said.

Out with the Facebook, in with the who?

Let’s grant the naysayers their argument for a minute.

If Facebook is out, who’s in? Path, Pinterest, and Tumblr were among the most frequently mentioned companies that came up in informal discussions with friends and acquaintances.

“Remember Tribe? Remember Friendster? Remember Myspace? Are any of you on it? No, that’s right you moved over to Facebook. So the chances are that history will repeat itself, unless Facebook does a 180 with their privacy, advertising, and mobile initiatives,” friend and tech PR pro Vanessa Camones told me via email.

“The next big thing will be on mobile and now that Instagram’s been acquired that top position is ripe for the taking. I myself basically put my personal stuff on Path, where I feel a better connection to the people who I really want to be friends with,” Camones added.

I too have migrated over to Path, but I still come back to Facebook. Cool or not, I find it hard to believe that Facebook, with its hooks into nearly every major mobile and web application, could ever be usurped in the same way that it eclipsed MySpace back in 2009.

Consider this: Facebook is omnipotent in the land of social media and, by some accounts, can control which applications rise to fame and which fade into oblivion.

Power so mighty you can kill off your enemies with one tweak of an algorithm? Now that’s cool.

Photo credit: K2 images / Shutterstock.com

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While seemingly every other popular tech startup is aching to go public, Evernote is playing it slow and steady.

Evernote CEO Phil Libin said he hoped to make the company “IPO-ready” by the end of 2013 while speaking to a group of developers and investors in Tokyo yesterday, the New York Times reports. Once that happens, he still wants to wait several years before going public to truly take advantage of the freedom being private allows.

“This is the time the company can take the most risks, for the next couple of years,” Libin said. “Once you’re a large public company, it’s also very difficult to take big risks, because you have to take report to the market every quarter and the market will punish you for failure.”

The company has 30 million users now, but by the end of next year Libin hopes to reach more than 100 million users and have near $100 million in revenues, the NYT reports.

His statement comes a little over two weeks after the company landed a massive $70 million funding round, which valued it at $1 billion. At the time, Libin said that he could see Evernote being worth $100 billion or more as a public company. Now though, he seems more interested in taking the company places public investors wouldn’t allow.

“Our goal is to take those risks now, and once we figure out the best business model, then we’ll go public, we’ll I.P.O.,” he said. “The whole point is not to be forced into an I.P.O.”

Libin’s stance is particularly interesting today, as Facebook’s IPO dominates the news cycle. Facebook’s offering will earn it billions, but this morning’s surprisingly weak stock performance is already raising questions. By staying private, Evernote can continue to innovate without the scrutiny of the public.

Evernote offers a suite of digital note-taking products with the goal of letting you remember everything. The core Evernote app lets you save pretty much anything — including text, pictures, and other files — to the cloud, which is then accessible from desktop and mobile devices. All of Evernote’s apps are free to use, but the company offers premium features at $5 per month (or $45 per year) rate that gives you larger upload capabilities, offline access, and more.

Mountain View, Calif.-based Evernote has now raised around $166 million.

Photo: Libin at VentureBeat’s Mobile Summit 2011/Devindra Hardawar

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Facebook began trading on the public markets for the first time today, and at the company’s headquarters in Menlo Park, Calif., excitement levels were high.

After an all-night hackathon designed to send the message that Facebook cares more about coding and shipping products than it does about the public markets, Facebook held a bell-ringing ceremony early in the morning. Using a specially-hacked remote-control NASDAQ button, Facebook chief executive Mark Zuckerberg simultaneously rang the bell on the trading floor of the stock exchange, 3,000 miles away, and updated his (and his company’s) Facebook status.

While chief operating officer Sheryl Sandberg and other executives looked on, Zuckerberg pressed the button and pumped his fist in the air before a crowd of cheering employees.

News outlets were confined to a small area in the company’s parking lot, although several helicopters circled overhead, getting crowd shots. Investor David Sze of Greylock made a brief appearance, surrounded by the glow of wealth, but otherwise the company and its executives and investors kept a low profile.

VentureBeat’s Sarah Mitroff staked out the scene from early this morning, and brought back a few photographs of the historic event. We’ve also included some screenshots from live video feeds and a couple photos from Facebook’s official press photographer to give you a sense of what it was like inside Facebook HQ today.

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While most of the tech industry is watching Facebook’s historic IPO day unfold, data startup Visual.ly is taking advantage of the situation by showing off the capabilities of its infographics service.

Today Visual.ly launched a new interactive infographic that uses Facebook’s stock pricing data to show exactly how much the company’s chief executive Mark Zuckerberg is worth in real-time. The infographic displays the current stock price, a chart tracking the stock’s price over the last 60 seconds, the total value of Facebook’s stock offering, and the percentage of shares owned by Zuckerberg as well as his total worth.Visual.ly’s Editorial Director Aleksandra Todorova told me that more data points may be added to the infographic later on.

“I look at this as more of a work in progress that can be customized for a specific purpose or client,” Todorova said, likening it to developing coverage of a news story (or string of stories). Making sense of data after its been analyzed can give way to new data points, which can make the infographic tell a better story.

The new infographic, much like the Twitter Visualization Project from July, is merely an example of what the company’s service can do by using information from various databases and APIs. And as VentureBeat previously reported, Visual.ly is able to offer these kinds of infographics without the use of Photoshop or contracted graphic designers.

“Unless you follow the (stock) market closely, it would be hard to determine how rich Zuckerberg is by only glancing at the current stock price,” Visual.ly Chief Marketing Officer Tal Siach told VentureBeat.

Essentially, anyone with little knowledge of the stock market can make a rough estimate of Zuckerberg’s worth based on statements made within news articles. But I understand what Siach is getting at — with his service you can see the math laid out for you, and know immediately how many dollars Zuck is worth at a specific moment in time. And if you do make an estimate within a blog post, you can link directly to Visual.ly’s data, which is much easier to digest than typical stock charts and graphs.

We’ve added a screenshot of the infographic below, but you’ll need to click through to Visual.ly’s website to see the live interactive version in action.

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Just hours before Facebook opened on the public market today, a group of Facebook users sued the company in a $15 billion class-action lawsuit over privacy, according to Bloomberg.

Facebook has attracted scrutiny for quite some time when it comes to user privacy and how well it protects the data of its users. The new lawsuit, which was filed in Federal Court in San Jose, Calif., contends that Facebook improperly tracked users even after they were logged out of their personal accounts.

“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” David Straite, a Stewarts Law partner, said in a statement to Bloomberg.

The lawsuit combines 21 cases filed in the U.S. and uses the U.S. Wiretap Act to create a value for how much each user should be owed. The Act “provides statutory damages of the greater of $100 per violation per day, up to $10,000 per Facebook user,” according to the lawsuit.

Facebook’s IPO got off to a rocky start today, but there’s no way to tell where things will end up at the end of trading. Along with word this week that GM would be dropping Facebook ads, we’re sure Facebook didn’t want today’s lawsuit news occurring on its IPO day.

Stay tuned for more Facebook IPO news throughout the day.

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A back room battle has been raging in recent months over the future of something very small:  the nano-SIM, a smaller SIM card design that would allow phone makers to fit more hardware in their increasingly thin devices.

For the vast majority of smartphone users, the shape of their phone’s SIM cards is not something of any real, pressing importance. But for Apple, Nokia, RIM, Motorola and the rest of the European Telecommunications Standards Institute (ETSI), it’s vital.

As exhaustively detailed by The Verge, the debate over the design has been split on a number of points, but one most significantly: Companies like Nokia were adamant about the design having a “push-push” mechanism, which would allow the card to eject once pushed.

Apple, on the other hand, uses a SIM tray design in its devices, so it has no need for such a design. That, along with its desire to keep the new design compatible with previous ones, explain most of Apple’s design decisions.

The central problem is this: Having two SIM card standards floating around is not something anyone wants.

So, as a result, compromise: The new design, proposed yesterday by RIM and Motorola, features elements that are 80 percent Apple’s and 20 percent RIM’s and Motorola’s – an ironic metaphor for the smartphone space that shouldn’t go unnoticed. Essentially, the new design takes most of the elements from Apple’ own and adds the “push-push” mechanism.

Most of the ETSI momentum is going in Apple’s favor, though we will find out which way the group votes when it meets later this month.

Photo: Flickr user cvander

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Groupon is being investigated by the Financial Industry Regulatory Authority after the company’s stock made a sharp, upward turn Monday, before earnings beating expectations were delivered at the close of business that same day.

Finra, which watches for oddities within the market, was tipped off to strange Groupon activity when the company’s stock soared 18.5 percent with no real cause, according to the Wall Street Journal‘s sources. This is a big spike for the company, and came shortly before it released a favorable earnings report to investors that evening. Sixteen million shares were bought and sold, when only four million have been traded within the last month.

Given the earnings report, which put Groupon at $559.3 million in revenue, and which beat analyst expectations by 29.3 million, it sounds like information was somehow leaked. The Journal reports that Finra is considering handing the investigation over the Securities and Exchange Commission.

Groupon has been involved in a number of other snafus during its road to and eventual IPO. The company’s Executive Chairman Eric Lefkofsky reportedly broke its quiet period saying the company was going to be “wildly profitable.” Later, Groupon’s chief executive Andrew Mason was investigated regarding an e-mail he sent to employees prior to the IPO, which was cause for quiet-period-concern. The company was also influenced to revise a weird accounting metric in its IPO filing that showed operating costs without including marketing costs. After its fourth quarters 2011 earnings report, Groupon also had to readjust its earnings to reflect less revenue that it had originally reported.

via The Wall Street Journal; Image via swanksalot/Flickr

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Facebook is looking mighty fine today — especially if you’re Instagram, the photo-sharing company that sold its hit mobile application to the social network one month ago for a cool $1 billion in cash and stock.

But wait. Did we say $1 billion? Scratch that. In actuality, the deal, after Facebook’s opening at $42 a share on the NASDAQ this morning, values Instagram at around $1.27 billion and counting.

If you recall, Facebook purchased Instagram in a hybrid cash-stock deal, giving the baby company $300 million in cash and 23 million shares. The actual value of the deal, then, is contingent on the market’s reception to Facebook as a public company.

In theory, paper multi-millionaire Instagram co-founder Kevin Systrom, who is said to hold a 40 percent stake in Instagram, saw his net worth bumped up by $37 million when trading started. At the $38 a share price, for instance, Systrom’s cut stood at around $469 million. At the opening price of $42 a share, however, we’re talking about roughly $506 million. Talk about an insta-win (though the market hasn’t sustained this sum in the first 30 mins of trading).

Other interesting questions still up for consideration: Did Facebook overpay? And can Instagram really earn its billion dollar plus value?

“We won’t know whether Instagram was worth Facebook’s outrageous investment until we see what they do with it,” Moor Insights & Strategy president and principal analyst Patrick Moorhead told VentureBeat.

“If Instagram’s mobile platform can be leveraged to more quickly monetize Facebook’s mobile platform, I can argue it was worth it. If it was a move to just remove a potential competitor, it will be a waste because there will be many, new, up-and-coming and compelling social media platforms that will arrive on the scene.”

Sterne Agee senior research analyst Arvind Bhatia views the deal a bit differently. “This is the beauty of [Facebook] using stock as currency,” he said in a phone interview with VentureBeat.

Facebook, in doling out more shares than cash, paid a fair price at the time the deal was negotiated, Bhatia believes. “Instagram will have to live with whatever the stock does,” he said. “It could be hurt if the stock doesn’t perform well.”

There’s the rub: Those 23 million shares won’t be issued until the acquisition closes, and that may not happen until the end of the year. After that, Systrom and co. may be under stock lock-up agreements that prevent them from selling their shares for several more months. By that point, Facebook could either be coasting along on the wave of public interest — Sterne Agee has set a one-year target price of $46 and a two-year target price of $59 — or careening backward toward a more down-to-earth fair value.

It’s important to note that none of this is lost on Facebook, or Instagram for that matter. “The value of the equity component of the final purchase price will be determined for accounting purposes based on the fair value of our common stock on the closing date,” Facebook clearly spelled out in its prospectus. “It is possible that the per share price of our common stock on that date could be significantly higher or lower than the initial public offering price.”

Ultimately, despite what appears to be a high price tag for Instagram, Facebook could come out the real winner in the deal depending on how the market reacts to the company and what the social network does with its sepia-toned friend.

“Mobile will be an interesting opportunity for Facebook. [Facebook] knows that the mobile web will be powerful, and it knows that real-estate is limited,” Bhatia said. Instagram, he added, will play a big role in whatever solution Facebook comes up with to tackle its mobile revenue challenges.

Photo credit: jec08290/Instagram

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You know what they say about a rising tide lifting all the boats. Well, the same goes for a waning tide, apparently.

As Facebook stock dips lower and lower in early trading, at times as low as its $38 initial price from last night, other new tech stocks are also taking a beating. So far today, Yelp, Pandora, Zillow, and Zynga are all trading significantly lower, too.

UPDATE: As of 9:04 am Pacific Time, trading of Zynga shares has been halted. Shares were down 13 percent before trading stopped.

UPDATE 2: As of 9:51 am Pacific Time, Zynga was trading again, still down 5.68 percent for the day.

Interestingly, some more mature (and consequently less vulnerable) tech stocks are trading up. Google is up around 3 percent for the day, and Apple stock has seen an 8 percent lift.

General economic indicators such as the S&P 500 and the NASDAQ Composite and NASDAQ 100 are only slightly down today, less than a quarter of a percent for all three indices named.

Here’s a chart showing percent changes for the day. As you can see, tech stocks that have seen relatively recent IPOs are down 4-12 percent so far:

It’s still very early, so it’s hard to tell what the rest of the day will bring.

Most of the analysts we consulted weren’t expecting a big “pop” for Facebook shares today, but they were expecting trading to stay in the low to mid-$40s. This dip down to $38, which was the original listing price last night, is inauspicious but not necessarily a disaster — yet.

“Facebook has an opportunity to learn from Google’s own IPO — which, by the way, had a rocky start — and subsequent business success,” said Lee Simmons, an industry expert at Dunn & Bradstreet.

Google, for the record, offered at $85, started trading at $100, and quickly rose to $108, only to fall back to $100 a few days later.

Super investor Warren Buffet also predicted a rough start for Facebook, stating at the Berkshire Hathaway shareholders meeting, “We never buy into an offering…The idea that something coming out…that’s being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible.”

Stay tuned for more Facebook IPO news throughout the day.

Image courtesy of artemuestra, Flickr

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Facebook shares are trading publicly for the first time ever today, and so far, we’re seeing small fluctuations in share price.

As of 11:30 Eastern time, trading had commenced at $42. Throughout the mornings, shares traded between $40 and $41. Highs and lows for the day are so far at $43.02 (a 13 percent increase from the original asking price of $38) and $38.

Analysts expect the price to remain in the low to mid-$40s throughout the rest of the day. Trading was expected to begin as early as 10:45 am Eastern Time but was delayed, likely due to the large volume of orders.

The eight-year-old company has offered 421.2 million shares today, bringing the deal’s total to slightly more than $16 billion with a market value between $93 billion and $104 billion.

Expected revenues for 2012 are $4 billion, with a $972 million net income, according to NASDAQ.

Facebook CEO Mark Zuckerberg chose to ring the bell remotely from his company’s Menlo Park, Calif., campus, where VentureBeat was on hand to get news and on-the-spot reactions — a welcome wave of verifiable narrative after several months of rampant speculation.

Hype be damned, this is the Big One

“The days leading to the IPO have been colored by an assemblage of facts, opinions, and rumors, from Mark Zuckerberg’s hoodie to the dampening effect of mobile growth on ad revenues,” said Gartner analyst Ray Valdez in a recent conversation with VentureBeat.

During the company’s quiet period between its S-1 filing and today, any actions or announcements from the company have indeed taken on added import, with the upcoming IPO throwing a long shadow over Facebook’s activities and subsequent media coverage.

“In aggregate, these ‘man-bites-dog’ stories serve to temper the early, somewhat irrational, exuberance around the IPO, which is likely a good thing for all concerned,” Valdez continued.

“Even if Facebook’s IPO comes in at the low end of the price range, it will have made history.”

History, indeed. Even at its starting price, Facebook has already broken three records, a fact that’s supported by statistics from NASDAQ. Here are a couple of charts we made to show Facebook’s place in IPO history across all global stock exchanges as well as U.S. stock markets.

Moreover, Facebook dwarfs other Internet IPOs, both from this bubble and the last. Today’s deal is about 10 times larger than Google’s 2004 initial public offering, according to NASDAQ’s stats. It’s 16 times bigger than Zynga’s IPO and more than 20 times the size of Groupon’s.

Now, all we have to do is wait and watch as Facebook shares begin rising (and inevitably falling) on the stormy seas of the stock exchange floor. The question on everyone’s minds: Where will Facebook shares be trading at the closing bell?

Don’t expect a “pop”

“This is now a $16 billion float — that is a ton of stock — so it’s unlikely that the stock will double like LinkedIn did,” said Michael Pachter, managing director for equity research at Wedbush Securities.

He continued to state that a “pop” only happens when stock is priced too low to begin with.

“I’m sure Facebook’s IPO will be well-received, but don’t expect the stock to go quite that high… I would expect the stock to be solidly in the mid-40s, as that’s where the private market was.”

Mark Siegel, managing partner at Menlo Ventures, agrees that the $38 starting point isn’t leaving too much money on the table.

“I think it’s going to be priced to perfection quite efficiently,” he told us, stating that the $38 price point “certainly fully values the company based on today’s financial metrics.”

While all parties involved acknowledge that the hype and drama surrounding Facebook has led to rabid investor interest and an oversubscribed initial offering, no one thinks there will be a LinkedIn-like “feeding frenzy,” as Dunn & Bradstreet industry expert Lee Simmons put it.

“Google’s shares rose 18 percent on its opening day, and LinkedIn jumped 109 percent. But LinkedIn floated less than 10 percent of its shares,” the analyst pointed out. “The combination of Facebook’s comparatively large share offering and its increased price range indicates to me that its opening day will be less ripe for the proverbial pop.”

“Still, the day you see your company stock symbol moving across the ticker is one you never forget.”

On the eve of Facebook’s historic IPO, serial entrepreneur Scott Sellers reminisced about his own experiences in this department, saying, “Facebook going public will have a profound impact on Silicon Valley.”

Top image courtesy of Jolie O’Dell, Flickr

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Looks like it’s not just the newspapers snooping on UK citizens. The government itself has reported internal breaches, according to information released in a Freedom of Information request.

Over 1,000 breaches of personal information have occurred in the last year due to rogue civil servants accessing the data without permission, says ZDNet. These employees gain access to personal information, despite a lengthy vetting process giving them the permissible access in the first place. These employees came from the UK’s Department for Work and Pensions and The Department for Health. Only the Department for Work says it properly recorded breaches made, and revealed in 2011 there were around 1,000 civil servants punished for wrongful access to personal information. The latter says it did not record all the breaches, though it did record at least 150 of them.

Many of the security concerns we hear about are from external groups, such as Anonymous, other governments, and hackers working independently. They spread malware, take websites down, deface them, steal personally identifiable information and more. What people don’t realize is that these guys are the modern bank robbers. Just about anyone with access to a wealth of personally identifiable information has the opportunity to make a lot of money selling that data on the black markets. Indeed, while “hacktivists” and online protesting breaches have gotten much of the attention, hacking is still a financially lucrative game.

Companies and governments alike still need to realize that many hacks can come from within. ZDNet notes that those who do expose or illegally access personally identifiable information could be subject to a fine as expensive as $7,900. Whether or not those involved in the breaches have been fined is unknown.

via ZDNet, Tower Bridge image via Shutterstock

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Microsoft’s Kinect has always held out tantalizing promises. As a user interface, it brings computing devices to the edge of greatness but falls just a little short of our dreams of the Star Trek holodeck or the cool transparent, gesture-controlled computer that Tom Cruise used in the sci-fi film Minority Report. You can fantasize about being a Jedi Knight in Kinect Star Wars…until the system fails to recognize your lightsaber attack and you get pummeled instead.

But imperfect as it is, Kinect is slowly but surely expanding beyond its casual audience of former Wii fans to the hardcore gamers. New Kinect games that have appeared or will appear later this year are targeting the hardcore. But people like me are pretty picky when it comes to their gaming experiences. A slight delay in recognition of a gesture or an inaccuracy in parsing a verbal command can ruin the experience for us.

Microsoft’s Kudo Tsunoda, creative director for Kinect, said in an interview that the accuracy and fidelity of Kinect are getting better, and developers are learning how to craft good experiences around what it is capable of doing.

“It’s great to see stuff showing up in more hardcore genres,” said Tsunoda. “And I think the way that people are using it in their experiences really shows the breadth of what Kinect can do. It enables, I think, creative people to use Kinect in a way that really enhances their experiences in a meaningful way for people who love their franchises.”

Recognizing the accuracy problems with Kinect, game developers are learning how to craft experiences that use the system in a way that allows for errors. Electronic Arts’ BioWare division didn’t use the motion-sensing system in Kinect for Mass Effect 3, but it did tap the voice-recognition system so you could issue combat commands to two squad companions.

“Kinect is a pretty sophisticated and impressive piece of hardware,” said Casey Hudson, executive producer of Mass Effect 3. “When it first came out, a few of us at the studio either got one or had a chance to play with one, and it was pretty cool.  Beyond that, because it has a few different abilities, it makes you think about how they could be used in the games you’re making.  As we discussed those possibilities, we got excited about the chance to integrate it into Mass Effect 3.”

The voice commands were a great fit with the tactical squad gameplay, and they use a lot less memory than motion-sensing commands, Hudson said. It took about nine months to integrate the voice commands into the game. They worked right away but needed refining and localization to make them work with multiple languages. In case the system doesn’t recognize your command (particularly in scenes with a lot of noise and music), you can always fall back to using the game controller. So the failure isn’t catastrophic for the game experience.

“The biggest lesson is to make sure the player has options,” Hudson said. “We saw enough positive reaction that we’ll consider it in future titles.”

Inspired by Mass Effect 3, Ricky Gonzalez (a developer at Bethesda Game Studios) modified The Elder Scrolls V: Skyrim to enable voice commands for things such as navigating through inventory or casting “dragon shout” spells that show off impressive special powers. He got the bare bones working, and then Bethesda decided it was interesting enough to assign a small team to it. Over a couple of months, they created the full set of features. Now you can issue around 200 different voice commands in the game that simplify what can be an otherwise unwieldy user interface.

Coming down the road is Capcom’s Steel Battalion: Heavy Armor, which makes use of both Kinect gestures and controller commands. In the game, you serve with a crew in tank-like Mech in an alternate-history version of World War II.

Kenji Kataoka, who heads the team at Capcom, said that he knew Kinect could be used for his game when he first saw the demo of Project Natal (the code-name for Kinect) years ago. His team worked on integrating Kinect and the controller to command the big Mech for the past three years. They worked closely with Microsoft researchers and studied the behavior patterns of 200 people to get the gestures for the game right. The trick, Kataoka said, is detecting your “intentions and coordinates of your gestures.”

He added, “At first people didn’t know how to react or grasp the concept itself. Then came the skeptics who were unsure about it or didn’t believe it would work. Now we are seeing the enlightened and believers. What we mustn’t forget in any immersive game, though, is that it requires some work from the player as well — be it imagination, adaptation, or certain role-play.”

Microsoft’s own major Kinect game, Fable: The Journey, has also been in the works for a long while at the company’s Lionhead Studios division. Tsunoda said that title uses a full range of Kinect capabilities, and it will have good fidelity upon launch. The popular reception of this game may determine whether Microsoft commissions further, similar projects.

Microsoft has still more unannounced Kinect games waiting in the wings. So far, we haven’t seen the spectacular, break-out success like we did with Wii Sports on the Nintendo Wii in 2006. That title introduced us all to motion-sensing games. Kinect has extended our interest. The Star Trek holodeck isn’t quite here yet, but Tsunoda thinks we’ll get there.

[Photo credit: Motioncapturedata]

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Kudo Tsunoda is the creative director for Kinect games at Microsoft and chief cheerleader for the company’s motion-sensing system for the Xbox 360 video game console.

Kinect has been a hit with casual game players who otherwise might have been fascinated with the Nintendo Wii. But hardcore gamers are a big challenge for Tsunoda. After a year and a half on the market, Kinect is starting to appeal to hardcore game developers, who have taken a long time coming to terms with making Kinect titles.

Some recent hardcore games such as The Elder Scrolls V: Skyrim, Mass Effect 3, and the upcoming Steel Battalion: Heavy Armor are exploiting Kinect’s ability to recognize voice and motion. We talked to Tsunoda about the trend, recently. Here’s an edited transcript of our talk.

GamesBeat: It’s interesting to see Kinect evolve and pick up more hardcore games. How do you see this evolution?

Tsunoda: It’s always great to see Kinect showing up in all different types of entertainment and gaming genres. Those new technologies — the longer that developers are able to play around with it and develop on it, the better their understanding of how to use the tech in a way that best fits the experiences they want to build is going to be.

You see such a wider variety of Kinect content now. It’s great to see stuff showing up in more hardcore genres. And I think the way that people are using it in their experiences really shows the breadth of what Kinect can do. It enables, I think, creative people to use Kinect in a way that really enhances their experiences in a meaningful way for people who love their franchises.

GamesBeat: Developers have gone down a couple of roads here. You have the voice recognition as one part of it, and then the other is the actual motion sensing, too. Can you tell me about how each one of those has gone for you?

Tsunoda: I always think about the kind of Kinect features we shipped with at launch as enabling not only the motion technology and the voice stuff but also our identity system. That allows people to stand in front of the sensor and then have that integrate or automatically sign them into Xbox Live.

And then you’ve seen since launch a lot of innovation on the software side around Kinect, enabling stuff like finger tracking, our player-skinning technology where you can stand in front of it and it automatically creates an avatar that looks like you, our object capture. And then, you know, certainly stuff like you’ve seen in Play as well.

I think it’s great when you see the voice technology showing up in things like Mass Effect 3, obviously, Skyrim. And then you see the great seated play showing up in stuff like the Forza franchise — things you’re going to see with Fable: The Journey coming out this holiday. You will get a higher fidelity of tracking as well as these new features. I think the constant evolution and innovation that you see in Kinect as a platform — it’s also really helping it to spread out to all different kinds of genres and experiences.

GamesBeat: At some level, the technology still could be more accurate. How that has affected what developers are doing as well?

Tsunoda: In lots of ways you see Kinect, especially in the core areas, in some ways being put into franchises that already exist. I think about a game like Mass Effect 3, and I don’t think necessarily the motion technology of Kinect in any way really dictates what goes into the game and what doesn’t as much as that game is perfectly suited for the voice technology side of things.

Fable: The Journey, coming out this holiday, will be using the motion technology, and it has really good fidelity in the motion technology. It is improving over time to drive a more core gaming experience. I think we’re proving out things in Kinect all the time — building new things. Allowing creative people to use Kinect to bring a different type of functionality in a way that makes sense for their franchises.

GamesBeat: Yeah. Now, it sounded like some of the things that you’re seeing are reflecting some improvement in Kinect. Is that correct, or is it more like the developers are learning how to use what’s already there? Like the seated play, for example: Is that more a case of people learning how to use Kinect, or is that possible because Kinect has had firmware updates or something like that?

Tsunoda: Developers are just learning how to use the hardware and software platform better. I think that’s true. But then I think also it’s people developing new software that enables unique and different things. I think it’s both the evolution of existing Kinect functionality and just the fact that so much of what Kinect is able to do is bring innovations through software development versus having to replace your hardware. Developers are getting better at using it, and then also we’re able to invent new things and update what’s going on through the software updates that we can do over Xbox Live with the existing hardware.

GamesBeat: Is it a parallel to the evolution of graphics on the 360? Call of Duty: Modern Warfare looked decent on the system, but Modern Warfare 2 looked better, and Modern Warfare 3 looked even better. They’re squeezing better graphics out of each new version of the game. Is that the same kind of parallel you have with Kinect here?

Tsunoda: Yeah, I think that’s exactly right. People understand better how to develop on any kind of technology. You’re going to get better performance, better experiences, new inventions over time. I think that’s why you see Kinect branching off into all different genres of games now. It’s because developers are able to do more with the technology as they’ve become more experienced in working with it.

GamesBeat: What are some of the different ways that people have overcome the toughest challenges here? Having played Kinect Star Wars, you get really tired playing that game, right? Somehow, there must be some kind of workaround for people like me [laughter]. You need help finishing the game without completely getting exhausted. Have you seen some of this clever thinking here?

Tsunoda: I think we have a bigger concept now of how you do gameplay ramping through an experience. That isn’t just difficulty ramping, but it’s energy ramping — if that makes sense.

We are learning how to build a narrative and a story around a Kinect experience that allows for different types of interactions. One of the things that we’re super excited about is how you can use a combination of facial detection, motion detection, voice recognition, and tone of voice recognition to allow somebody to participate in a narrative like an actual character inside the scene. So much of how you communicate is through body language and tone of voice, and being able to incorporate those things into an interaction with a digital character is stuff that only Kinect can do.

When you think about those types of mechanics and experiences, they are ones that require a lot of full-body motion even if it’s just conversational, like you and I are talking now. I think that a lot of how we’ve started thinking now about games through how you do a mixture of experiences — full body experiences — with play mechanics that don’t require much motion as a way of allowing a more immersive and in-depth and lengthy play experience that I know a lot of gamers really love.

GamesBeat: What are you expecting to see this year? Do you have an expectation that many titles on the hardcore side will use Kinect? Are you expecting something like dozens of titles, or is it still an experimental thing that’s in a handful of titles?

Tsunoda: I don’t think I have exact numbers. Even just from a Kinect portfolio perspective, we had a lot of titles at launch. I think it’s something like four times the number of experiences today that we had at launch. We’ve seen a huge increase in the breadth of the portfolio.

I think more than anything, it’s really seeing how many different implementations of Kinect that are out there today. Whether that means using different features of Kinect, inventing new features of Kinect, controlling or combining Kinect with controllers, combining Kinect with other types of objects that you can have as far as object scanning, the avatar generation — so many of these different ways that Kinect is showing up in all kinds of experiences.

I think that you’re going to see a lot of variety in the types of experiences, a lot of new invention. And then of course, like you’ve seen even in the last year or so, four times as many Kinect titles out there as there were at launch and seeing a big increase of all types of titles as we go forward.

GamesBeat: Do you think we’ll see a lot of those features in one game, or do you think we’ll see a game like that original Milo [artificial intelligence] demo?

Tsunoda: You know, the exciting thing is seeing a lot of those things used in combinations inside single experiences. So not so much just one experience doing one thing as much as how people can start blending all the different capabilities of Kinect in an immersive experience.

Whether it’s exactly like the Milo demo we did or not, I do think that the next evolution of the experience will come as developers get better and better at working with Kinect. I think right now we’re in an area where you’re going to start seeing some amazing Kinect experiences based on things like using voice or using full body or using identity. And then I think going forward you’re going to see a lot more people really blending all of the different features of Kinect together to build some really rich and immersive new types of experiences.

GamesBeat: So Steel Battalion looks like it’s one of maybe the highest — the one that uses the most Kinect features?

Tsunoda: Yeah, I think Steel Battalion — it’s a great example of taking an experience that had already been done with controllers and completely reinventing it in a way that really uses Kinect as the center of the experience. I think you can see — when you’re really reenvisioning an experience built from the ground up for Kinect, the kinds of deep, rich, immersive experiences that core gamers love can totally be achieved. I think you see that both in the Steel Battalion game and in Fable: The Journey coming up this holiday as well.

GamesBeat: I assume there are some unannounced games here that are also interesting to you.

Tsunoda: [long pause] Yes. There are.

GamesBeat: That’s good to know.

Tsunoda: Because, obviously, I work here making games and experiences with the Kinect, and I get to see a lot of Kinect product. But in the same way, a lot of the stuff that really makes this job fun for me is that I love playing games, and I love seeing other people’s experiences and getting in and enjoying them myself.

Come [video game trade show] E3 time, there’ll be a lot of product for everybody to check out, myself included. That’s why I always look forward to getting out to E3, getting to see a bunch of new stuff, getting to try a bunch of stuff out. I think just as a gamer — the time between E3 and the holidays, you get exposed to so many different types of experiences and get to play so much new product, it’s just a super fun time.

GamesBeat: So gamers are always anticipating the next thing. What do you say to the people who want to have a Kinect 2 already?

Tsunoda: It’s funny. I tend to think in terms of hardware updates. As the lifecycle of consoles has occurred, the next big thing always tended to mean the next piece of hardware coming out.

But I think one of the things that’s been awesome about Xbox 360 — you look at things like Xbox Live and how much that service has evolved from when it first launched until now and how there’s always new features and new big things being added.

Like I said before with Kinect, we’ve gone from it meaning motion and voice and identity to meaning those things plus finger tracking, player scanning, object scanning, seated play — all these other great new features. I think that waiting for the next big thing isn’t about waiting for the Kinect 2. It’s more about all the great invention that can be done in software without having to go out and spend money on a new device.

GamesBeat: I was playing the Skyrim demo. If you had your speakers on a little high and there was rain going on in the demo, then it was hard for Kinect to hear the commands accurately. It sounds like, in some sense, there’s still some work to be done — some quality to be improved upon. I think I had trouble with Kinect on my old 360 because the fan makes so much noise.

Tsunoda: It’s always interesting because I think part of the stuff that we’re really trying to push with Kinect is allowing the machine learning, based on real world data, to improve the quality of the experience for everybody.

I think that’s why, just like we talked about — it’s not where you have to wait for Kinect 2 for something to be different as much as the more that we’re able to play with Kinect and update Kinect over time, all of the capabilities in all different types of scenarios, we’re going to keep pushing. I think that, again, it means both the evolution of existing features as well as the invention of new ones.

I think that’s a huge feature of Xbox 360 — is that we’re always looking to improve the experience and always looking to update our work based on how people are playing and how people are having fun and to make that a core part of our company’s DNA. It’s being able to improve the experience consumers have based on what they’re doing. I think that’s stuff we push on in all areas.

GamesBeat: I think both BioWare and the Bethesda folks mentioned that Microsoft gave them some expertise or gave them some engineers to help with the voice recognition? Is that something you do with a lot of the games, where you have your own Kinect experts going out to help everybody create these games?

Tsunoda: We help not only with Kinect, but with Xbox all around. Obviously, we want consumers and people to have fun and have the best experiences possible on Xbox 360, and so we have teams of developers that build the software platform that enables other companies and other developers to then bring to life the creative visions that they have in their heads that they want consumers to enjoy.

We share technology where it is helpful. If there’s ever technology or expertise that we can help share with people to best enable creative folks to build the real vision of what they want consumers to experience in the highest quality way possible, that is stuff that we’re always happy and motivated to do.

GamesBeat: Is that actually an incentive program you guys have, where you’ll throw marketing dollars to match whatever a developer is investing in Kinect? Is it as formal as that?

Tsunoda: The stuff I’m telling you about isn’t so much a marketing or incentive-based thing as just the stuff that we want to do to enable customers to have the best experiences. We make our platform and technology available to developers so they can help build the best things for consumers. I think out of everything, the incentive-based thing that we have is just wanting people to have super, high-quality, fun experiences on Xbox. I think that’s always our primary motivation.

GamesBeat: When you think about how strategic Kinect is, then, how do you look at it that way? Strategic in terms of the whole Xbox 360 initiative.

Tsunoda: I think just from a strategy standpoint, the stuff that we really want to provide both for developers and to consumers is that — no matter which way is the most fun way for you to experience your entertainment content or what type of entertainment content you want to build, you’re able to do that in the best way possible on Xbox.

I think this is what’s great. If you’re a consumer, you love entertainment, digital entertainment, you love playing games, and you want to do stuff with a controller — we can do that. If you want to do stuff controller free, we can do that as well. If you want to do a controller mixed with Kinect, you can do that also.

I think that means that, really, we give consumers the widest experience choice possible, so you can enjoy your entertainment in the way that is most natural for you. And then from the developer perspective, if you want to build games with controllers, if you want to build with Kinect, if you want to build a mix, you can do that also. It allows developers to really bring the stuff that they want — build the stuff that they want to build — in the easiest way possible.

I think that’s always a kind of overarching strategy of what we’re trying to do — to just allow people to do things in a way that’s the most fun and natural for them. Whether that’s how consumers enjoy their entertainment or how creators develop it.

GamesBeat: How much credit do you give Kinect for your success in the last year? The 360′s been the top-selling console platform for more than a year now.

Tsunoda: It’s great that Kinect has really given people a new way to experience their entertainment. I think that’s been awesome. I just think that the best thing that Xbox 360 has is that the experiences are super fun. And I think that’s always our main objective. It isn’t about a particular technology as much as having the most fun experiences and the best entertainment for consumers.

Kinect helps to enable a lot of that. The great work on Xbox Live helps to bring a lot of that to life. Our console and our controllers help do a lot of that. I think at the end of the day it’s a combination of all of these things that are unique to Xbox that allows people to have more fun on our console than on any others. I think people’s enjoyment and people being entertained is always the thing that drives sales. It was just nice to see that people are voting with their dollars for where they feel their entertainment is.

GamesBeat: The price has stayed the same [Microsoft has since started offering a $99 bundle with Kinect for those who sign up for a two-year subscription for Xbox Live Gold]. Could you explain the thinking on that as well? I suppose as long as you’re on top and demand is high, there’s no reason to change the price on a product.

Tsunoda: I work mostly on the creative side of all this, certainly. I think we don’t really have anything to talk about as far as the pricing side. Again, it’s been great to see the success of the console, and it’s great to see so many people having fun with our experiences. But we don’t really have anything to announce about the pricing or anything like that right now.

GamesBeat: Is the hardware also something that, like the Xbox 360 itself, you can constantly improve and lower the cost side of it at the same time?

Tsunoda: I think no matter what, we’re always looking to improve what people are able to do on Xbox. Whether that’s from a hardware perspective, a software perspective, or a services perspective.

I think at least with Kinect, you’re still seeing so much invention and creation through software versus hardware. I don’t think we’re anywhere close to realizing the full potential of what the existing Kinect sensor can do. And I think there’s still lots of room for invention through software. Right now, that’s really our main focus.

GamesBeat: Have you looked back at the usage, and is anything interesting to you there? Is anything surprising? Is it clear that you beat the other guys in terms of the way their motion-sensing devices have been used in the home?

Tsunoda: Some of the stuff that’s really been the most awesome data is not just how much Kinect is used for gaming but how much Kinect is used for the all-up entertainment that is available on Xbox Live. It’s been great. You start seeing stats out there now like how — over Xbox Live, people are spending more time with broader entertainment content than just multiplayer gaming.

I think you see a lot of Kinect usage in the entertainment space as well. Stuff that has been the most surprising for us — it’s not only how Kinect is being used in entertainment but the widespread use and creative expression being done with Kinect in all different types of industries. You see Kinect being used in the medical field, you see Kinect being used in education, you see Kinect showing up in all these different types of places.

It’s one of those things that I think is super exciting about Kinect for Windows. You’re starting now to see Microsoft really providing that same level of support — not just to people building games or entertainment. It’s how Kinect can unlock new kinds of experiences and invention in all different types of fields.

Out of everything, it’s great to see Kinect being used in entertainment, not even just gaming. But the most surprising thing has been how much it’s been used in other fields for purposes we never would have thought of even as one of the original people working on Kinect.

GamesBeat: What about the expectation that gestures are going to be a big part of the user interface for everything in the future? Do you still see Kinect as just the beginning of this kind of vision?

Tsunoda: I never really think of it just as gestures as much as like a really full, natural user interface capability. With full-body motion, not just gestures but full-body motion, voice, and the identity stuff. Because it’s important that we’re able to understand not just what you’re doing but who you are. I do think it isn’t just a question of gestures as much as this really being one of the first steps towards fully immersive, 3D input and being able to match that with the initial steps that you start seeing in 3D display technology. It’s totally a bit on the nerdy side, so I apologize, but it’s super interesting.

I watch a lot of science fiction shows and movies, and there’s always been the kind of like, you know, the Star Trek Holodeck experience that you see in a lot of sci-fi. It’s interesting because the holodeck is a fully realized match between immersive 3D visual display and completely natural humanistic input. And while I don’t think we’re going to be there any time soon, I do think that you can see with Kinect and with 3D display technology the very initial building blocks and first steps of something like a Star Trek Holodeck experience coming together. Because the things that you need for that, we’re just now starting to bring it to life.

I guess that’s the super exciting thing for me: Not just where this is going to be in a year or two but the understanding that the creative tools that we’re developing, both on the input and the output side, are so revolutionary that it really is leading us down a path to something that is cool. I think people feel like it’s so far in the future, and it’s such a kind of made-up science fiction, and yet the building blocks are falling into place to allow us to start getting there. I think for somebody like me who’s dreamed about that stuff as a little kid, seeing something like Kinect as a real fundamental building block to those types of experiences is super exciting.

GamesBeat: Very cool. Like Minority Report or Star Trek, as you say… It seems like we’ve still got to catch up with all the sci-fi movies here.

Tsunoda: Yeah, exactly. It’s always the fun part of working in this industry, to me. Hopefully we do good work and we’re able to start getting things to catch up a little bit faster than people would have expected.

GamesBeat: Is there an indie Kinect project that you’ve found to be interesting?

Tsunoda: Yeah, the stuff that we’re doing with Kinect, especially around Kinect for Windows and then also Kinect Fun Labs, is really fun. We’re sharing a lot of the Kinect community work and allowing people to experience it on our console.

This might not be the exact answer that you were looking for, but probably for me one of the coolest things I’ve seen was we had one or two people who developed a Kinect app that helps rehabilitate people who had traumatic brain injuries. They’re using the science of understanding brain functionality and brain injuries and using physical rehabilitation steps through Kinect as a way of helping people to overcome these types of injuries faster than in ways that people currently use.

Out of everything, it’s those kinds of things, to me, that are so amazing.  Seeing something that was built primarily for entertainment purposes being used in a way that is really helping people overcome enormous obstacles in their own lives. That’s been the most surprising and also the most rewarding.

GamesBeat: I didn’t even go down this road earlier, but one thing I thought was interesting is what you see as a casual use of Kinect and what you see as a hardcore use of Kinect. Is Kinect Star Wars one or the other?

Tsunoda: That’s a good question. Star Wars is such a massive intellectual property, and it has spanned 30-plus years of existence. It’s super funny because I have an eight-year-old and a 10-year-old nephew, and they’re super into Star Wars. And then when I talk to them about Star Wars, they’re super into Clone Wars, they’re super into the later movies, and then they aren’t as much into the first three Star Wars movies that came out. Whereas I’m all about the first three movies, and I like the other stuff as well. Depending on what age you are and what entry point you had into the Star Wars IP, your iconic memories and the things that are important to you about Star Wars are so different.

Really, with Kinect Star Wars, the awesome thing about that title is that it can be a Star Wars experience that appeals to all different types of Star Wars fans. It isn’t so much about “is it core, is it not core, is it casual, is it something else?” But really it’s a lot more about understanding what all different types of Star Wars fans are interested in and allowing people to really live out their iconic moments of the Star Wars IP within the title.

GamesBeat: Do you have any comment to wrap up everything we’ve been talking about: Kinect and the hardcore?

Tsunoda:I think the really great thing is just seeing so many more core experiences coming and how they’re using Kinect in really interesting ways. I just think that over time, you’re going to see so many different genres and experiences no matter what kind of gamer you are. But if you’re a core gamer especially, it’s just a super fun time. You’re going to be seeing a lot more stuff with Kinect.

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Amazon is pitching companies on the idea of advertising on the welcome screen of its Kindle Fire tablet — except that it will cost a minimum of $600,000 to do so, according an AdAge report.

Even though Amazon has frustratingly not said how many Kindle Fires it has sold, the company claims it’s the best-selling, most gifted, and most wished for product since its November launch. That would indicate that there are at least a few million Fires out there in the hands on Americans, and those welcome screens are ripe for ads to annoy Kindle owners.

The Kindle Fire ad campaigns will reportedly run for two months and will also be included on the E-Ink Kindle’s “Special Offers” advertising. If advertisers are willing to pony up $1 million, your company would be included in Amazon’s public relations materials as well.

It’s unclear at this time how similar the Kindle Fire ads would be to the current Kindle’s “Special Offers,” which appear on Kindles as a screensaver when you shut down the device. There are no visible ads when you are reading a book itself on the Kindle. We could imagine the Kindle Fire ads working in a similar manner.

Amazon has not yet decided if the ads will appear on all Kindle Fires or if it will just be on new Kindle Fires that are sold. The lack of clear direction has caused advertisers to decline the offers thus far, but that could change.

Let us know in the comments if you would be upset if your Kindle Fire starting showing ads.

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Facebook co-founder Eduardo Saverin hasn’t seen the best publicity lately following the renunciation of his U.S. citizenship, but he took the time last night to congratulate Mark Zuckerberg on his impressive run.

“On the eve of the Facebook public float, 8 plus year in the making, I as co-founder wanted to look back and cherish Facebook’s early beginning,” Saverin wrote on his Facebook page. “Congrats to everyone involved in the project from day one till today, and I especially wanted to congratulate Mark Zukerberg [sic] on keeping tremendous stead-fast focus, however hard that was, on making the world a more open and connected place.”

Of course, Saverin is set to make a mint on Facebook’s public offering, so perhaps he’s just viewing his contentious relationship with Zuckberger with rose-colored glasses. Saverin owns 4 percent of the company, and after trading begins this morning his stake could be worth around $4 billion.

After co-founding The Facebook at Harvard and serving as the young company’s chief financial officer, Saverin was eventually pushed out over conflicts with Zuckerberg. The rise and fall of their relationship served as the dramatic crux of Aaron Sorkin’s “The Social Network” movie. Saverin called the film “more art than documentary” this week in an interview with the New York Times.

Via the LA Times; Photo via the National University of Singapore

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We’ve spent hours talking to and corresponding with analysts and VCs about the Facebook IPO over the past few days, and we couldn’t resist asking each of them a rather personal question: Expert commentary aside, would they, themselves, be buying Facebook stock today?

Each one gave us different answers, and for slightly different reasons, but most of the folks we talked to were extremely bullish on Facebook stock as an investment vehicle, either for the short-term or the long haul.

But most of our sources expressed at least some measure of ambivalence, too.

On the fence

“I’m really on the fence on this one,” said Lee Simmons, an industry expert at Dunn & Bradstreet. “Facebook has an opportunity to learn from Google’s own IPO — which, by the way, had a rocky start — and subsequent business success. If it can leverage its user base to create value for advertisers while continuing to develop products that diversify its income stream, then I’d be a more willing investor.”

Simmon still hesitates to invest personally, however, saying, On the other hand, Facebook has slowing growth compared to Google in its IPO run-up. That alone gives me pause.”

Quite a few of our sources adopted a wait-and-see stance. “Facebook feels to me ‘fundamentally strong, valuation wrong,’” said serial entrepreneur Scott Sellers. The Azul Systems co-founder continued, “Their stock will rise after the offering, and if they execute on their growth opportunities, then the valuation and the stock price will be justified. But there’s very real risk that with ‘just reasonable’ business performance that their valuation will decline to more typical levels.”

Bullish to the end

Others, however, have been more than enthusiastic.

One such cheerleader comes in an entirely surprising form, that of former MySpace CEO Mike Jones. “I’m super bullish on Facebook,” said Jones in a recent phone call.

“I think it’s a long-term play… I literally couldn’t be more excited about it.”

Jones continued to note that Facebook’s being a household name certainly wouldn’t hurt it on IPO day. “People will just want to own the stock,” he said. “People will log into E-Trade and buy Facebook stock because they love it and use it everyday.”

Serial entrepreneur Flip Filipowski, who currently runs cloud startup SilkRoad, was similarly positive. “I would absolutely take all the Facebook stock I could get at the IPO price,” Filipowski said.

“Facebook has a large user base hungry to participate in the phenomenon. These share prices are what the market is willing to pay at this time; my guess is that it will close way above where it is priced.”

“I’m buying,” said entrepreneur Dave Scott, co-founder at Marketfish. “Facebook is sitting on top of the one of the largest gold mines in the world in terms of data.”

Mark Siegel, managing partner at Silicon Valley firm Menlo Ventures, sees not only the potential for short-term gains, but also the likelihood of long-term profits.

“I am personally going to buy some as a long term investor, for the same reason that I hold Apple and Amazon and Google and Oracle and Microsoft,” he told us. “I think the long-term future is very bright.”

The ethical Michael Pachter, managing director for equity research at Wedbush Securities, said, “Fortunately, I am not permitted to invest in stocks that I cover.” Still, he admitted, “I would personally invest in all of my OUTPERFORM rated stocks, including Facebook, if I were permitted.”

Not gonna happen

Not everyone’s such a believer, though. “IPO often stands for ‘it’s probably overpriced,’” quips Quorum Labs CEO Larry Lang.

Noting that the company is already a household name and has enjoyed robust trading on secondary markets, Lang continued, “This unintended consequence impedes technological innovation from benefiting the economy. I’ll be interested in the longer-term market response to Facebook’s cloud approach.”

Similarly bearish were these words from the older (and probably wiser) super-investor Warren Buffet during his annual Berkshire Hathaway shareholders meeting: “We never buy into an offering…The idea that something coming out…that’s being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible.”

Other Berkshire Hathaway executives in the octogenarian age range expressed concerns about Facebook’s entire raison d’etre, especially the phenomenon of oversharing youngsters.

And it’s not only the get-off-my-lawn crowd naysaying Facebook stock. The young and digitally savvy Reddit co-founder Alex Ohanian will not be buying Facebook shares, either. His objections are, in a way, not so dissimilar to those of his older counterparts.

“We’ve never seen a company like this before, ever. It knows things about our private lives that no one else does, and one of the big issues a lot of us in the tech community has had with Facebook of late, has been their support of bills like CISPA,” Ohanian said. “So, that’s why I’m going to be holding off.”

Facebook stock will start trading at 8 am Pacific/11 am Eastern. Stay tuned for more Facebook IPO news throughout the day.

Top image courtesy of Luis Louro, Shutterstock

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The lawsuit over the breakup of Infinity Ward and Activision Blizzard has been a proxy war between two industry giants.

But this week, the legal case took some new turns. For a while, it looked like Activision would prevail, but now the outcome isn’t so clear. It started in 2010 when the founders of Infinity Ward — the Activision-owned game studio that turned Call of Duty into a billion-dollar franchise — resigned after a contractual dispute. The co-founders Vince Zampella and Jason West said Activision owed them royalties and Activision accused them of planning to defect to a new studio funded by its arch enemy, Electronic Arts. The founders fired off a lawsuit saying Activision conspired to get rid of them.

The legal action spiraled in a bigger battle for control of the first-person shooter market, which has turned into a multibillion-dollar business. Activision sued EA for interrupting its business by stealing away Zampella and West, who set up Respawn Entertainment and hired dozens of former Infinity Ward employees. Activsion recently claimed more than $1 billion in damages.

Activision said that it had to pull another studio, Sledgehammer Games, off of its Call of Duty game to help the decimated Infinity Ward studio finish Call of Duty: Modern Warfare 3. That game generated more than a billion dollars in revenue forActivision, but the company said it could have made more profits and also completed another game in the Call of Duty family. EA could have been stuck holding the bag for a very large legal bill.

But EA and Activision settled the lawsuit this week. In a joint statement, the companies said: “Activision and EA have agreed to put this matter behind them.” They declined to disclose the details of the settlement, but Wedbush Securities analyst Michael Pachter said that no money changed hands. EA said it would not have to file an 8K financial disclosure related to the settlement, and EA never set aside a fund to insure against legal losses related to the case.

On top of that, Activision voluntarily agreed to pay $42 million in royalties that it owed to Infinity Ward employees, not including West and Zampella. But the trial will go forward in West-Zampella versus Activision case.

Los Angeles County Superior Court Judge Elihu Berle denied Activision’s motion to postpone the case for an additional thirty days. The trial will begin as scheduled on May 29.

Even more stunning were court disclosures about Project Icebreaker. Activision executives’ email records showed that they had allegedly conspired to find dirt on West and Zampella because the Activision management was fed up with their arrogance and wanted a pretext to fire them. This project preceded the time when the founders began communicating with EA and Hollywood agent Seamus Blackley, who helped get the founders and EA together.

In other words, Activision was trying to get rid of the Call of Duty founders that it said were critical to the success of its Call of Duty business. In the legal filings, former chief legal officer George Rose at Activision asked Thomas Fenady, former director of information technology at Activision, to “dig up dirt on Jason and Vince” because “we just want to get rid of them.” Rose allegedly told Fenady that Activision Blizzard chief executive Bobby Kotick had given the orders. Rose told Fenady not to get caught and said that “Bobby will take care of you” if things didn’t turn out well. Rose denied this in his deposition. Fenady reportedly tried to get access to West and Zampella’s hard drives and email records.

Activision said that it accepted the court judgment and looks forward to the trial. But this week has had a few big setbacks for its proxy war with EA, which is its biggest rival in the video game business.

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What were you doing at 9:30 a.m. Eastern? You certainly weren’t ringing the NASDAQ’s opening bell as Facebook CEO Mark Zuckerberg was doing. But what Zuck did simultaneously is perhaps even cooler.

click to enlarge

To celebrate the once-in-a-lifetime, historic moment, Zuckerberg posted a status update like no other to Facebook.

“Mark Zuckerberg listed a company on NASDAQ. — with Chris Cox and 4 others,” reads Zuckerberg’s Friday morning update (see screenshot to the right).

The unusual status update went live right as Zuckerberg rang the opening bell, which can only mean that the social network configured the update especially for today’s special occasion. To do so, engineers used Facebook’s Open Graph API, which lets developers create custom actions, like “read a book,” “listened to a song,” or, in this case, “listed a company.”

In fact, clever Facebook engineers actually “hacked” the NASDAQ button to post the update, goes the story told by David Garcia, a senior software engineer at Facebook, on TechCrunch.

“We hooked up our hack to run at exactly the same time as Mark pushed the button to turn on the light and ring the bell. Then we attached a wire that hooks to the hack and into the headset jack of a cell phone,” Garcia said. “When the button was pressed, it sent a signal through the hack, and the phone got the signal that triggered the custom action through our Open Graph API, posting a story onto Mark’s Timeline. It worked.”

Facebook yesterday priced its shares at $38 apiece for a $104 billion valuation. The social network will raise $16 billion (up to $18.4 billion with its over-allotment option) in its long-awaited initial public offering on the NASDAQ later today. Shares are expected to begin trading around 11 a.m. Eastern today.

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Pre-orders for Samsung’s next flagship Android smartphone, the Galaxy S III, have already reached 9 million just two weeks after it was announced. In comparison, the last Galaxy phone took several months to reach 3 million pre-orders.

The early orders come from the more than 100 global wireless carriers that will be offering the phone, Reuters reports. The 9 million figure was divulged to the Korea Economic Times via an unidentified Samsung executive.

The company hasn’t officially acknowledged the amount yet, but I wouldn’t be surprised if it was true.

The Galaxy S III sports a massive 4.8-inch screen with a 720p resolution. Samsung unveiled the phone earlier this month and showed off a Siri competitor, dubbed S Voice, that will function as a digital assistant. It also has eye tracking features, to keep the screen active while you’re viewing it.

Spec-wise, the Galaxy S III features an 8-megapixel rear camera with burst and best-shot modes (similar to HTC’s One series), a huge 2,1000 mAh battery (necessary for that massive screen), NFC, and Bluetooth 4.0. It weighs only 133 grams and is 8.6 millimeters thick. A 3G HSPA+ version of the phone will launch at the end of the month, while a 4G LTE version is coming later this summer. The launch will begin in Europe on May 29th, followed by North America in June, and then Asia, Africa, and Latin America.

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The timing couldn’t have been worse. On the week of its IPO, Facebook saw one of its largest advertisers, General Motors, get up and leave the table, likely taking millions of dollars with it.

The move prompted a swirl of marketing experts’ opinions and analyses of Facebook’s main source of revenue. All the numbers pointed to the same conclusion: Facebook ads were underperforming, and, as a result, ad revenue growth was slowing.

However, investment specialists say this news will likely have little or no impact on Facebook’s initial public offering and the day-one performance of its stock price.

“GM is a heavy loss for Facebook, but I doubt it will have a material effect on the company’s IPO,” said Lee Simmons, industry specialist at Dunn & Bradstreet.

“Despite the recent drawback, its advertising and marketing connects nearly a billion global humans, and I believe it will have no impact on Facebook’s opening day,” said serial entrepreneur Flip Filipowski.

“The advertising hiccups are a problem and will definitely scare off many investors,” said Michael Pachter, managing director for equity research at Wedbush Securities. “But it appears that demand for Facebook shares is so overwhelming, the stock will still price at the high end of the range or above and is likely to trade up.”

Serious doubts

Simmons brought up the more relevant question on long-term investors’ minds: Will Facebook ever figure out a sustainable revenue stream?

“The larger question is how the company plans to reverse its slowing ad revenue trend,” he said. “Facebook still offers tremendous value to advertisers, but the investor who sees three straight years of slowing revenue growth would rightly pause for a second look.”

Facebook’s reported revenues for 2012 to date have not lived up to industry expectations.

eMarketer, a well-known firm that tracks social media revenues for private and public companies, estimated toward the beginning of the year that Facebook would earn $6.1 billion in revenue in 2012, a significant increase from 2011′s $3.7 billion in revenue.

However, the firm also noted that these numbers did not meet their earlier forecasts and that growth rates have already peaked.

“The tip of the iceberg”

While some are shaking their heads at Facebook’s display ad strategy, others are seeing a fairly young company that is still in the experimental stages when it comes to advertising and other kinds of revenue.

“Those very dismissive arguments look at display advertising in isolation, and that’s not what this is about,” said Altimeter Group analyst Rebecca Lieb.

“Facebook has an opportunity to do a type of advertising that’s more contextual and more targeted based on the social graph, and they’ve really just started doing that,” she continued.

Part of the maturation process, she said, would rely on advertisers and marketers being willing to be flexible and work in a new medium. “Advertisers still have to figure out how to advertise in these environments,” she said. “It’s not just about a display ad … it’s a brand new form of advertising and marketing.”

“Much of the company’s growth over the next several years is expected to come from mobile advertising,” said an eMarketer rep. Lieb also brought up mobile marketing and advertising as well as social commerce as potential sources of revenue for the social network.

Ultimately, all the experts we talked to were clear on this one point: Facebook’s revenue strategy isn’t even out of diapers yet. Investors and analysts alike look at Facebook’s ad suite and see lots and lots of opportunity.

“Facebook ads perform about half as well as a regular display ad campaign. That’s quite well documented,” said Menlo Ventures managing partner Mark Siegel. “But I don’t think it’s going to have an effect. It’s not ‘new’ news, and Facebook has just scratched the surface of its revenue and advertising.”

Facebook stock will start trading at 8 am Pacific/11 am Eastern. Stay tuned for more Facebook IPO news throughout the day.

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