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Call it the unicorn problem: beautiful, alluring, magical, and totally non-existent. Social commerce, according to the latest Monetate e-commerce report, is almost as elusive. In fact, social media referrals represents just 1.55 percent of all traffic to major e-commerce destinations. And when that tiny trickle of traffic arrived, only .71 percent of it actually resulted in any kind of sale. Email marketing, by contrast, generates twice as much traffic as social media, and has four times the conversion rate to sales. Those are not good numbers for social. Source: MonetateConversion rates by traffic-referring sources The darling of the omnipresent social media gurus on Twitter, social commerce was supposed to totally disrupt e-commerce. And, because people trust other people’s recommendations and spend a lot of time on Facebook where they meet other people and read what they say, social commerce was supposed to be huge, turning social media influence and shares into sales and revenue. Unfortunately, there’s a problem: “The challenge for social media — and for its big brother, word of mouth marketing — is that they are inherently additive pieces of the conversion funnel, rather than causative,” Monetate’s new report states. But Monetate says that the problem isn’t in the social. It’s in how companies are using it. Loyalty isn’t about clicking on an offer, report author Mitch Joel says, it’s about building a relationship. And a relationship goes far beyond “do you want to buy this.” Which means that social is not short term, social is not transactional, and social is not the same as direct response. In other words: shocker, social media is, well, social. Taken in that context, social can still be very valuable for brands, as marketing firm Syncapse found just a few weeks ago, valuing some Facebook fans at over $1,600. But it’s the relationship that’s valuable, not the episodic communications per se. And that relationship can be very valuable. When an actual sale is made from a social referral, it’s often valuable, with the average Pinterest-referred sale clocking in at over $80, and the average Facebook and Twitter sales at about $70. Source: MonetateAverage order value by social-referred sale photo credit: zoomar via photopin cc Filed under: Business, Enterprise, Social

Following Microsoft’s 60-minute press conference yesterday, where the Xbox One was revealed to much anticipation, an unfortunate feeling of melancholy grew inside me. It was immediately and painfully clear that I am no longer Microsoft’s target audience. Instead, the company’s new key-demographic is the casual audience that has kept the Xbox 360 selling in recent years, and with this choice, the Xbox brand has transformed from a gaming system to an all-in-one entertainment device. Over the course of the hour long press conference, I slowly felt more and more out of place as if this wasn’t intended for me … as if it wasn’t a place I should or want to be. The wild ride of buzzwords and snappy features introduced us to an impressive multimedia center, one that could stream films and live television or chat to friends via Skype, but a worryingly small amount of attention was given to games. This new console will obviously be innovative in how it “Kinects” people (har har), but the question I regularly asked myself over that hour was why, as a gamer, do I care about most of this? It was frustrating to watch many big names march out and discuss features that will barely impact or improve the future of gaming. Being able to review fantasy football or basketball leagues during live matches sounds cool, but as I’m not a massive sports fan, the early sections of the press conference might as well have been white noise. Equally frustrating was how anything that did reference the gaming potential of the Xbox One did so through loose terminology, merely suggesting how this console was going to offer enhanced “experiences” or “content.” I can’t say I saw anything that could provide the innovation I was sorely hoping to see. At least some of the specs for the Xbox One were revealed: 8 CPU cores, 8GB of (non-descript) RAM, multi-channel 802.11n WiFi, and a Blu-ray drive definitely sounded good. However, instead of showing us how this technology will be put to use, such as through the numerous demonstrations during Sony’s PlayStation 4 press conference in February, we were merely presented with a handful of cinematics and teaser trailers. While the games shown looked good, the graphical fidelity wasn’t mind blowing. The visuals shown were not as ground-breaking as the HD leap from the previous generation. And sadly, the only new creative work announced, Remedy Entertainment’s Quantum Break, did so through a predominantly live-action trailer sprinkled with in-game cinematics. This teaser was severely underwhelming and didn’t provide nearly enough information — assuming the game isn’t about a little girl who makes boats collide with bridges — to create serious interest. Because nothing resembling gameplay was shown, it’s difficult to picture how each experience will feel when they’re eventually in our hands. As a result, if these new titles do nothing but improve graphics, it’s hard to feel too excited about them. Even the new Call of Duty felt a little flat. Eric Hirshberg, the chief executive of Activision, presented a lovely trailer for Call of Duty: Ghosts, but I had to chuckle when Mark Rubin of Infinity Ward added, “America’s military is in disarray, and as the player, you’re the underdog fighting back against superior forces.” Not wanting to steal your thunder, Mark, but I’m pretty sure that’s the storyline of every Call of Duty since Modern Warfare 2 as well as numerous other shooters, such as Home Front. But hey, we get a really fancy looking dog so that’s innovative right? … Right? Still the most surprising element of the conference for gamers was most likely not what Microsoft did mention, but in fact what they did not. During this show Microsoft had the gaming world’s attention, now was their chance to put millions at ease regarding the worrying DRM and pre-owned rumors spiraling around this latest addition to the Xbox brand. However, rather tha

Carl Esposti is CEO of crowdsourcing advisory firm massolution. If you think that participating in crowdfunding simply means investing in smaller companies that launch games and devices on Kickstarter, think again. With crowdfunding volumes reaching $2.7 billion in 2012, it has emerged as a viable, scalable alternative to public and private finance across the globe. After surveying more than 350 active crowdfunding platforms, including IndieGoGo, CrowdCube, Symbid, and Gambitious (full site directory at crowdsourcing.org), and completing an in-depth analysis of market trends, research firm Massolution has identified five major crowdfunding developments for 2013 and beyond. 1. Niche platforms As crowdfunding platforms try to benefit from market differentiation, niche-, industry-, and sector-specific platforms are emerging. Platforms offering reward-based crowdfunding see an especially high value in serving a common niche or industry. Examples include platforms focusing on video games, recording art, performing art, real estate, food and beverage, fashion, journalism, and more. While it’s smart for a new platform to choose a specific niche simply to differentiate its service, there is another big reason why this trend is likely to prevail—it helps build a repeated crowd on the platform. Having crowdfunders visit a platform, not just because they have been invited onto a specific campaign, but because the campaigns appeal to their tastes, is extremely valuable. #2. Locavesting In her 2011 book, Locavesting, business and finance journalist Amy Cortese describes how “a revolution in local investing” is emerging and that crowfunding is boosting it. This year, we are going to see increased momentum in this revolution because many new crowdfunding platforms will actually specialize in locavesting. It’s been over a year since President Obama signed the JOBS Act, but legislation is stymied in the hands of the SEC. However, at least four states – Louisiana, North Carolina, Georgia and Kansas – have taken the initiative to allow crowdfunding for business loans. Crowdfunding platform Rebirth Financial is specializing in locavesting and offers intrastate, lending-based crowdfunding. Although Rebirth’s offerings are open to anyone within state borders, successful campaigns have so far been driven by very local support – all the way down to the customer-base level. #3. Enterprise crowdfunding Large enterprises and associations have begun to look into crowdfunding and how this tool carries new potential for their companies, including raising social profiles, market testing, and spin-ins of entrepreneurial ventures. The perceived benefit is not the additional funding itself, but the democratization of specific decisions that would otherwise be made internally in the company. The American Institute of Architects (AIA) represents the interests of more than 85,000 member architects across the U.S., a sector that has been hit particularly hard by the recent financial crisis. Recently, the AIA published a report examining crowdfunding’s potential as a new source of capital for residential, commercial, and industrial infrastructure projects. Crowdfunding shows significant promise for attracting investors to smaller projects and getting them off the architect’s drawing board. In this case, crowdfunding will be used to spur community support and financing for an assortment of infrastructure ventures that would ordinarily have difficulty finding money due to their smaller size. #4. Crowdfunding economic development Major development banks and similar institutions — including The World Bank and The Inter-American Development Bank — are seeking to leverage crowdfunding for economic development. Crowdfunding’s social profile and its strong connection to micro-finance are the main drivers. Crowdfunding has historically been embraced by philanthropic ventures, especially for donation-based crowdfunding and interest-free lending. The models natura

Twitter released its two-factor authentication option today, after major media organizations were tricked into giving out their login information to hackers. Two-factor authentication is an extra form of security when logging into an account. It can come in a few different forms, but generally always involves some kind of code that users must input alongside their username and password. This code can be supplied through a mobile applications such as Google’s Authenticator app, a text message, or an a piece of hardware like RSA’s dongles. The code is often activated and deactivated in a short period of time, so that if one code is leaked out, it cannot be used in the future to access an account. Twitter has gone with the text messaged code, according to its announcement today. Text messaging covers a much larger portion of the population, as opposed to an app, which requires users to have a smartphone. Twitter warns that not all carrier may support the technology. You can turn two-factor authentication on by going to your account settings in Twitter and selecting “require a verification code.” You’ll then have to enter a phone number. After two-factor is set up, you will have to enter the code every time you log in to Twitter. A number of big-name companies have rolled out two-factor authentication as a result of hackings, including Apple. Twitter recently experience a rash of “break ins” involving the accounts of major media publications CBS, NPR, the Associated Press, and more. The Syrian Electronic Army, a pro-regime group of hackers that often attacks publications for their coverage of the conflict in Syria, has taken responsibility for the majority of these hacks. It says it usually gets access through phishing expeditions, where the group will send e-mails that look legitimate to employees of their target company asking for login credentials. In the case of the AP, a tweet about an explosion at the White House caused the Dow Jones Industrial Average to drop one percent in a minute. PhishMe chief executive Aaron Higmee explained that consumer-facing sites actually often leave these codes active for longer than usual because consumer sites don’t like having any barriers to entry. If a hacker phished a code and it still worked, then the two-factor authentication is useless. Jim Fenton, the chief security office of OneID, also explains why two-factor authentication is breeding a false sense of security. Twitter explains that now it has the two-factor technology in place, this opens the doors to future security elements to be introduced. Image via Twitter Filed under: Security

The world’s largest streaming music service, Pandora, is finally adding some deep integration with the world’s largest social network, Facebook, giving its users a much easier way to socialize their musical activity with friends. Following on the heels of yesterday’s Pandora Premieres announcement, the new Facebook integration adds a helpful social layer to the streaming music service, and may help assure investors that Pandora is moving forward despite a grim business outlook ahead of tomorrow’s Q1 FY2014 earnings report. Previously, Pandora’s now former CEO Joe Kennedy testified at a congressional hearing that Pandora would be unable to sustain its business if music royalty rates weren’t lowered, (and it doesn’t appear the rates will drop). There’s also the matter of increased competition in smart radio services from giant tech companies with lots of money to burn. Google recently launched its own Google Play All Access streaming radio service, while Apple and Amazon are rumored to debut similar offerings later in the year. As for the new Timeline app integration, Pandora isn’t following other media companies that have provided deep integration with Facebook’s Open Graph, which allows people to see all of your activity from both the Facebook news feed and from an activity ticker. Streaming services like Spotify allow friends on Facebook to see songs you’re currently listening to, which I’ve never found very compelling. Pandora’s Facebook integration is a bit different because it focuses on adding things to your Timeline under a music section. When people are exploring your Timeline page, they’ll see a record of your songs played, favorite artists, and custom radio stations that others can then listen to. It also pops up in the Facebook news feed, but as a past event that behaves more like a news story than an activity. And determining exactly what listening activity you want people to see is pretty easy — meaning I can hide most of the random 90s slow jams that pop up. You can toggle the automatic sharing on and off as needed, which I can’t really say about the fire hose of activity offered by other music services that integrate with Facebook. Those sharing controls are also available on Pandora itself. The new Facebook Timeline integration is available across all of Pandora’s applications and platforms (iPhone, iPad, Android devices, Pandora’s website, etc.) today. Obviously, the company is committed to a more social Pandora experience, but the more interesting observation is in how it’s not at all trying to promote an increase in listening (or consuming) activity. Media companies like Spotify, Viddy, Vevo, Ustream, and others all saw a “Facebook bump” in new users and time spent on their respective services after integrating with Facebook’s open graph. But that sort of move could actually hinder Pandora’s overall business strategy. It’s already one of the largest streaming music service almost to a fault, with 200 million total registered users and over 1.49 billion hours of music listened to per month. Despite record growth, the company said it’s unable to generate revenue and grow long-term profitability without the aid of any “Facebook Bump” due to what it sees as unreasonably high music licensing fees. Those fees have forced Pandora to implement a 40-hour monthly music listening cap on users of its free, ad-supported service. Therefore it would appear that a large growth spurt would end up hurting the company’s bottom line, since its advertising revenue isn’t able to keep pace with Pandora’s operational growth and increasing music licensing costs. But preventing the service from growing and attempting to lower the amount of interaction spent on it from its most loyal would be a very backwards strategy — not that I think Pandora’s

A few weeks ago, Chris Dixon tweeted something thought-provoking: What were the last Hollywood movies you saw about technology & the future that were optimistic? They seem to be systematically dystopian. I happened to be sitting in a movie theater waiting for Iron Man 3 to start, so I tried to come up with a good counter-example. It’s a lot harder than I thought it would be. Then the pre-movie trailers starting playing. The new Will Smith (and son) flick, After Earth: dystopia. The new Guillermo del Toro flick, Pacific Rim: dystopia. Even the new Superman flick, Man of Steel, could be classified as a technological dystopia (more below). Sure, there are some films — mainly smaller indies — that in some ways are starting to buck the trend. But overall, Dixon (and Peter Thiel, who Dixon says he got the idea from) are right: Hollywood seems to hate technology. Why? My initial thought is simply that dystopia sells. It’s the same reason why the mainstream media covering technology tends to harp on the downsides of new tech, sometimes to the point of fear mongering. They are tracking you! They want to know your location! They want to record you going to the bathroom! Most people are predisposed to fear what they do not understand. Hollywood’s futuristic films are simply playing to this fear in the same way that horror films are packed with moments meant to startle you. This is nothing new. In 1927, Fritz Lang’s Metropolis — the very first feature-length science fiction film — told of a 2026 where the lower class workers power the technology for the upper class. In 1951, The Day the Earth Stood Still saw aliens bring a giant robot to Earth that would destroy the planet if humans couldn’t get their act together. The 1960 version of The Time Machine (based on the H.G. Wells book) had technology (nuclear weapons) destroying civilization. 2001. A Clockwork Orange. Soylent Green. Alien. Blade Runner. The list goes on. The difference is that we now live in a society where advanced technology permeates all of our lives. Nearly everyone now walks around with computers in their pockets that are far more powerful than the computers that filled up rooms just a few decades ago. Nearly the entirety of human knowledge is now just a few clicks or swipes away at any given moment. The vast majority of our recent technological breakthroughs, I think everyone would agree, have been overwhelmingly good for society. And yet, Hollywood still seems sure that this is going to change. That at some point, our meddling with technology will create HAL 9000 or Skynet, and technology will turn on us. The example I ended up tweeting back at Dixon as an answer to his thesis was Star Trek. As Grantland noted recently in looking back at the 25th anniversary of Star Trek: The Next Generation: Gene Roddenberry’s guiding vision of the Star Trek franchise was, famously, that it would offer an optimistic vision of humanity’s future. And that largely held true through The Next Generation television series: The Soviet Union collapsed a couple of years into the filming of The Next Generation, and the show’s optimistic future became startlingly coterminous with the optimistic present of the George H.W. Bush administration. Where else but space could you find a thousand points of light? The grand adventure of the NCC-1701-D was no longer to spread civilization, or even defend it; it was just to keep the machinery oiled. Remember 1991, America? But the recent Star Trek films are a bit different. While I always liked how plot of Star Trek First Contact revolved around making sure a man takes the first flight at warp speed in space to usher in an era of peace on Earth, the actions are kicked into motion by the threat of the Borg — perhaps the ultimate in dystopian technology — taking over the Earth. The latest Star Trek franchise seems to take a mainly glitz and glam approach to technology — bright white decks on giant starships accentuated with lens flares galor

On Wednesday, CTIA–The Wireless Association, announced the winners for the 2013 Emerging Technology (E-Tech) Awards. The eighth annual awards ceremony was held at the Las Vegas Sands Expo & Convention Center. Once again, the awards gala honored the industry’s most innovative new wireless products and services in mobile apps, consumer electronics, enterprise & vertical markets and network technology. Winners were determined across 15 categories spanning the wireless and mobility ecosystem. “This year’s awards highlight the awe-inspiring and significant impact the wireless industry has on every sector and on our daily lives. We’re pleased to showcase the vision and ingenuity from our industry at CTIA 2013, which is North America’s largest mobile marketplace,” says CTIA Vice President and Show Director Robert Mesirow. “Our transition to Super Mobility Week in September 2014 will provide innovators with an even greater platform to showcase their amazing products and services in time for the holiday buying season.” So who took home top honors across the many mobile-centric categories? Click here to find out.

There’s only little more than a day left to join the virtual March for Innovation, which is digitally marching on Washington, DC to agitate for immigration reform. There are two key problems that require immediate remediation in Congress, according to the coalition of companies, politicians, and nonprofits: jobs, and fairness. “Our outdated immigration system is costing our economy talent, jobs, and innovation, not to mention the toll it’s taking on families and potential immigrants,” the organization says. “America can’t afford to fall behind in the race for global talent – a race we’re already losing. Already, other countries have incentivized innovation and encouraged startups while we make it difficult for talented immigrants to even apply for a visa.” That sounds like a reference to Canada, which just recently created a “startup visa” that gives immigrants who are founding companies instant permanent residency, and had its minister of Citizenship, Immigration, and Multiculturalism, Jason Kenney, visit Silicon Valley to drum up applicants who might be having trouble staying in the U.S. The result could be a net drain on the American economy: Holy crap! @alexisohanian ‘s mom was an illegal immigrant. If she had been deported? No #reddit for the USA. That’s why #iMarch #latism — AnaRC (@AnaRC) May 22, 2013 When I chatted with Kenney last week, he called the U.S. immigration system “dysfunctional.” The U.S. has made attempts to address the situation with a Startup Act of its own, but even that would only allow founders to stay for up to three years. The March for Innovation is looking for much more comprehensive reform that would include help for currently undocumented immigrants already in the country. March for Immigration is supported by the Silicon Valley Leadership Group, Steve Case, Mark Cuban, Arianna Huffington, and numerous other business and technology leaders. If you’re interested in participating, there are four things you can do to help, including: Tweet or Facebook your senator Spread the word on Twitter or Facebook Change your Facebook profile picture to iMarch Email your friends The ultimate goal is immigration reform that supports innovation, and delivers on the promise at the feet of the Statue of Liberty. photo credit: gerson721 via photopin cc Filed under: Business, Enterprise, Entrepreneur, Small Biz, Social

Neurotrack, the startup that won the health prize at this year’s SXSW, has pulled in a round of seed funding, according to a Form D filing. The $90,000 boost from angel investors is the first outside capital for the company with a diagnostic test for Alzheimer’s disease. CEO Elli Kaplan is aiming her life’s work at Alzheimer’s and related demensia. “I watched two of my grandparents die ‘alone’ because they could no longer remember their family members who were sitting at their bedsides,” she said. Neurotrack’s test is bolstered by 25 years of neuroscience research. Millions of dollars from foundations and grants have already been poured into the technology, which was developed by researchers at Emery University. The company offers a computer-based cognitive test that can detect an impairment on the Hippocampus, the first structure in the brain to be impacted by Alzheimer’s. The program evaluates patients’ eye movement — and the time spent looking at the familiar and new images. Related: The founders launched the company at DEMO — read the full VentureBeat story here. Kaplan was impressed by the technology, which she claims could predict patients with a high risk of Alzheimer’s up to six years prior to the onset of the disease. So Neurotrack licensed it, and is beginning to commercialize the test by selling to pharmaceutical companies. “The biggest issue that pharma companies have is populating clinical trials with people who are pre-symptomatic,” said Kaplan. To develop drugs to treat Alzheimer’s, they need access to patients before irreparable damage is done. The Alzheimer’s Association reports that about 5.4 million Americans have Alzheimer’s – and that number is expected to rise to 16 million by 2050. But, Kaplan is convinced that we’ll someday develop a drug that can cure the disease. For now, informed patients can make lifestyle changes (exercising more, adapting eating habits), and take medication to delay the onset of the disease. “We know that some of the symptom-treating drugs are more effective the earlier you can start them,” said Kaplan. Results from the most recent research is very promising — according to Kaplan, the participants who scored below 50 percent on the test have all received an Alzheimer’s diagnosis within six years. None of those scoring above 67 on the test have converted to Alzheimer’s. 92 people participated in the study. Neurotrack isn’t ready for the public yet — but if and when it becomes available, Kaplan said that people in their 50s will get tested every year. Patients with a family history of Alzheimer’s may receive the test earlier. Kaplan would not yet disclose pricing information for the test when it becomes available. The company is in the throes of fundraising for its next round, and is still fleshing out its go-to-market strategy. It is a graduate of Rock Health Boston, which has a strong relationship with venture firm Kleiner Perkins, and first launched at DEMO. Top image of the founders at DEMO via Flickr Filed under: Health

Oh, Kim Dotcom. You just never stop surprising us. Just hours after Twitter finally rolled out its long-awaited Two-Factor authentication feature to protect accounts, the Megaupload founder is claiming to have invented the entire mechanism… and he’s got a patent to prove it. “But they won’t even verify my Twitter account?!”, he says. The patent in question can be viewed here. Filed for in 1998 and published two years later, it lists a Kim Schmitz — Dotcom’s name before he changed it in 2005 — as the sole assignee. For the unfamiliar, two-factor authentication is a mechanism intended to make it more difficult for hackers to access accounts that aren’t their own. When a user attempts to log in to a service from an unrecognized computer, the service sends a one-time password to an alternative device (like, say, a cell phone) known to belong to that user. At least theoretically, hacking a user’s account would thus require access to that device in addition to their password. Google, Facebook, Twitter, and countless other monstrous sites all use two-factor authentication to protect user accounts, and Kim Dotcom’s tweets suggest that he hasn’t seen a cent from any of’em for the alleged “massive IP infringement”. Google, Facebook, Twitter, Citibank, etc. offer Two-Step-Authentication. Massive IP infringement by U.S. companies. My innovation. My patent— Kim Dotcom (@KimDotcom) May 22, 2013 So, will he sue? It seems he has at least considered it: I never sued them. I believe in sharing knowledge & ideas for the good of society. But I might sue them now cause of what the U.S. did to me— Kim Dotcom (@KimDotcom) May 22, 2013 But he quickly switched to a different approach; instead of getting into a legal battle with a bunch of giants, Dotcom would prefer that Google, et al. continue to use “[his] patent for free”, in exchange for financial assistance in his ongoing legal battle: Google, Facebook, Twitter, I ask you for help. We are all in the same DMCA boat. Use my patent for free. But please help funding my defense.— Kim Dotcom (@KimDotcom) May 22, 2013 All of our assets are still frozen without trial. Defending our case will cost USD 50M+. I want to fight to the end because we are innocent.— Kim Dotcom (@KimDotcom) May 22, 2013 Given the rather broken state of software patents, it’s not impossible to imagine that there’s at least one other person or company out there that can claim to have invented it, with patent in hand. This patent held by Dynapass Inc, for example, was approved in 2006 for “Use of personal communication devices for user authentication”. We’re searching for other instances of similar patents. As strange as it may seem for those who only know him as the founder of a file uploading site that was raided by the FBI last year, it would actually make quite a bit of sense for Dotcom to have security-related patents. His first brush with notoriety came in 1994, when he was arrested in Germany at the tender age of 20 for hacking calling cards. Those who spend their lives looking for security holes are often the same who come up with the solutions.