With its push into international markets heating up, Facebook appears to be setting its sights on a handful of popular ‘copycat’ social networks whose web sites bear an uncanny resemblance to its own.

StudiVZ, the German social network that the company filed suit against on Friday (Click here for a copy of the complaint), claims to have 10m users scattered across Germany, Austria, and a handful of other countries in Europe. That’s a lot of people, the most active of which ostensibly aren’t using Facebook’s German-language site.

From the looks of it, StudiVZ should be an interesting test case for Facebook’s intellectual property claims. The site, it’s fair to say, looks almost exactly like Facebook - except that it’s red, not blue. It has groups, a section for photos, and even its own version of the Facebook “wall” where friends can leave each other messages. Many of the page layouts look identical to those on Facebook.

Ten million users is nothing to sneeze at (StudiVZ recent sold to a big German publisher for a suspected 100m euros). But a bigger challenge to Facebook could come from clones elsewhere, especially in China, where Xiaonei, another site that bears striking resemblance to Facebook, boasts more than 15m registred users and has raised $435m in venture funding.

Various tallies around the web have identified at least nine other major alleged Facebook clones. It’s not clear whether Facebook intends to pursue other alleged copycats. But with its lawsuit Friday, Facebook has put them on notice.

Update: StudiVZ responds

It took almost 48 hours (thanks in part to Facebook’s decision to file its suit late in the afternoon on a Friday, long after Germany closed down for the weekend) - but StudiVZ has finally issued a response to the Facebook suit. The money quote, from Marcus Riecke, chief executive:

“There are numerous social networks. Facebook was not the first and certainly isn’t the only one. By attempting to harm studiVZ through a meritless California lawsuit, Facebook is arrogantly laying claim to an international monopoly over social networking sites that the facts show it does not deserve.”

Full statement after the jump. Continue reading "Attack on the clones?"

Gartner and IDC released their latest PC shipments figures on Wednesday, showing computer shipments up either 16 per cent or 15.3 per cent in the second quarter, depending on who you ask.

Given the uncertainty in the global economy, it’s tempting to view the numbers - which were better than expected - as a sign that trouble in the financial and housing sectors has yet to spread to the IT sector. But do not be fooled: beneath these rosy headline figures lie clues about an impending slowdown.

IDC said growth in computer shipments in Asia was slower than expected during the quarter- a situation it blamed on rising energy prices and other inflation concerns cutting into IT spending there. If true, that would undercut one of technology bulls’ key arguments heading into the current downturn - that robust sales in Asia and other fast-growing emerging markets should help offset weakness in the US.

Adding to the clouded outlook, Gartner analyst Mikako Kitagawa says that the rise in the number of computers shipped masked steep declines in average selling prices, particularly in the US and Europe. While it is common for PC prices to fall from year to year, steeper than expected price cuts could hit PC makers’ profit margins, and prolonged price pressure could put the squeeze on smaller PC makers. Ms Kitagawa says the industry “could ultimately see a significant wave of consolidation if stronger vendors continue to press their pricing advantage.”

So what is the bottom line? Unfavourable economic fundamentals mean that “demand could remain depressed in the coming quarters if economic pressures continue, even with sustained price decreases,”  says David Doud, an IDC analyst.

Some Apple fans were finding it hard to make use of their new 3G iPhones on Friday as a flood of shoppers trying to activate their new handsets overwhelmed Apple’s iTunes servers. The overload caused Apple’s iPhone activation process to crash for part of the day, turning thousands of new 3G iPhones into glorified paperweights.

Tech-savvy Apple fans, many of whom waited in line for hours - and in some cases overnight - to get their hands on the 3G iPhone should have seen this coming. It doesn’t take a computer genius to figure out that, with tens of thousands of people queueing up from Tokyo to San Francisco, there was bound to be a crushing load on Apple servers at some point during the day.

But over-eager early adopters were not the only ones suffering yesterday, according to reports from the blogosphere. Apparently, owners of first-generation iPhones who plugged into iTunes for a software update also found their phones turning into bricks, as crashing iTunes servers left them unable to complete the update process.

The result was, as they say in California, a bit of a bummer.

By midday in San Francisco, the problems that had plagued both sets of users throughout the day were showing signs of easing. Asia had gone to bed, lessening the load on servers. By mid-afternoon, the frantic Twittering about failed software updates had largely ceased.

By all accounts, the 3G iPhone is one of the most exciting devices to launch this year (read Paul Taylor’s full review here). Too bad for Apple that its launch got off to such a rocky start.

It took a long time, but Hasbro, the owner of the rights to Scrabble in the US, has teamed up with Electronic Arts to finally launch an online version of the popular crossword game. The game is available at Pogo.com today, and is scheduled to make its debut on Facebook later this month. So what does this mean for Scrabulous, Scrabble’s ersatz competitior, which took Facebook world by storm when it launched last year?

The prognosis isn’t good.  Scrabulous has been under a cloud since January when Hasbro and Mattel, which owns the international rights to the game, sent letters to Facebook asking it to remove the game, citing copyright infringement.

Meanwhile, an online version of Scrabble created by Mattel and Real Networks has been struggling to gain traction since it launched in April for audiences outside the US and Canada. To date, the game has managed to attract fewer than 6,000 daily users on Facebook - less than two per cent of Scrabulous’s daily audience of 450,000.

Hasbro and EA may do better with the launch of Scrabble in the US and Canada. But even if the North American version attracts five times the interest of its international counterpart, it will barely make a dent in Scrabulous’s audience numbers.

In January, Scrabulous’s creators claimed to be making more than $25,000 a week in advertising revenues. With the launch of a US version of online Scrabble imminent, the door is now open for Scrabble’s owners to go after their fair share of that revenue by pursuing legal action.

Forcing Scrabulous to shut down would no doubt alienate tens of thousands of loyal Scrabulous fans. But with thousands of new users joining Facebook daily, it might make sense for Scrabble’s owners to risk some user backlash now in hopes of a bigger payoff later. Besides, if the game is addictive enough, even the most disgruntled former Scrabulous users may not be able to stay away for too long.

It’s going to be a couple more weeks before the 3G iPhone makes its way to the shelves of Apple stores, but thanks to analysts at iSuppli, we now have a decent idea of how much it costs Apple to make each new handset.

ISuppli’s “virtual teardown”* of the latest iPhone, which landed in my inbox today, puts the cost of an assembled 3G iPhone at $173. That’s 23 per cent lower than the best estimate of what it costs to make the existing 8GB iPhone.

For Apple, a 23 per cent drop in cost could lead to fatter margins, in spite of its decision to abandon the iPhone’s earlier unsubsidised $499 price tag in favour of a subsidised price of $199. As iSuppli writes:

“The size of the subsidy paid by the wireless carriers to Apple will be about $300 per iPhone, iSuppli estimates. That means that with subsidies from carriers, Apple will be selling the 8MB version of the second-generation iPhone to carriers at an effective price of about $499 per unit, the same as the original product.”

Some of Apple’s extra margin will be pared by loss of a share of operators’ subscription revenues, an early concession that Apple has agreed to drop with the 3G iPhone. Some estimates had put Apple’s share of subscription fees at 10 per cent for the first-generation version.

In choosing to revert to a traditional subsidy-based model for the new iPhone, operators seem to be willing to take a short term hit in hopes that service and data fees for the 3G iPhone will be higher than those for iPhone 1.0.  If iSuppli’s analysis is right, Apple stands to make out well regardless.

*ISuppli analysts arrived at their $173 figure by getting on the phone with suppliers and supply chain analysts to develop an educated guess about what was likely to go into the new iPhone, and how much it was likely to cost. The final estimate did not include other costs, like the cost of software development, shipping, and packaging, iSuppli said.

The exodus of early Facebook executives continues. Six weeks after Facebook announced the departure of co-founder and technology guru Adam D’Angelo, the social network said on Thursday that Matt Cohler, one of Mark Zuckerberg’s first hires, is on his way out.

Well, not exactly. Cohler is leaving his position as VP of product development to become a general partner at Benchmark Capital, a Silicon Valley venture capital firm. But he will stay on at Facebook in an “advisory” capacity, whatever that means. 

Cohler’s not-quite departure is the latest evidence of the changes underway at a company that is trying to mature beyond its scrappy startup beginnings. Of the original, core team of executives that led Facebook up from obscurity to take on MySpace for the title of world’s biggest social network, only Mr Zuckerberg and his former Harvard roomate, Dustin Moskovitz, remain.

It’s not hard to understand why. It has been ten months since Facebook garnered its eye-popping $15bn valuation in an investment round with Microsoft, and the pressure to drum up the sales and profits necessary to justify such a high price tag remains intense.

Yet for all the work Facebook has been doing to develop its business model, it has little to show for it publicly. Over the past few months, the company’s PR operation has fallen largely silent, while the focus of internet buzz has shifted to other services like Twitter and Friendfeed (a Benchmark company).

There is little doubt that Zuckerberg and his new number two, Sheryl Sandberg, are hard at work on the business model needed to carry Facebook through the next stage of its development, perhaps paving the way for an eventual IPO. But there is also little doubt that Facebook isn’t quite the free-wheeling startup it used to be.

Stewart Butterfield and Caterina Fake, the husband-and-wife team behind Flickr, the photo-sharing site that sparked the Web 2.0 craze when it was bought by Yahoo in 2005, have decided to leave the struggling internet group.

I caught up with Stewart by email as he was rushing to catch a plane, and he confirmed the rumours. Meanwhile, Valleywag seems to have obtained a copy of Butterfield’s resignation letter (it’s a classic of the genre, best read in the voice of Daniel Plainview from There Will Be Blood).  

In our email exchange, Butterfield stressed that this was a move that he and Caterina had been planning for some time, and is not related to the current Microsoft-Yahoo drama.

That jibes with what we have been hearing since February: After three years inside a big, bureaucratic company, and now that their payouts from the acquisition have vested, the Flickr founders have decided to move on to greener pastures. 

Still, the decision was no doubt made easier by the collapse of the Microsoft-Yahoo talks. Kevin Johnson, Microsoft’s internet guru, is apparently a big fan of the Flickr founders, and they could have had a bright future inside a combined company.  

Mozilla, the scrappy open-source software company, hoped to set a one-day software download record on Tuesday with the launch of Firefox 3, the latest copy of its popular web browser. The company even went so far as to set up a special web page to promote its Guinness Book of World Records bid.

But Mozilla’s hoped-for PR coup turned into something of a debacle as thousands of eager downloaders rushed the site. The result was an internet equivalent of the Cleveland Indians’ infamous “10 cent beer night ” in 1974, in which an inebriated mob of baseball fans - lured by the promise of all-you-can-drink 10 cent beers - laid waste to portions of Cleveland Municipal Stadium.

In Mozilla’s case, the flood of download requests for Firefox 3 rendered the Mozilla.com site inaccessible to other users for part of the day. The cock-up drew jeers from web commentators. As VentureBeat wrote:

It is both annoying and laughable when a company massively hypes its own launch, only to result in broken links and 404 pages.

Mozilla had to know its servers would get slammed around 10 AM PST (the start time), hell, it begged for it to happen. In the blogosphere, we have a word for this: FAIL.

Hey, at least no one got hurt. The latest word from Mozilla is that the company is on track to break the download record in spite of the earlier problems.