Way back in February the writing was on the wall: Twitter would compete directly with third party developers who were creating Twitter apps. Twitter investor Fred Wilson reiterated that threat just a few days ago when he said most of the apps that third party developers had created were merely “filling holes,” not truly creating “something entirely new on top of Twitter.”

That sure sounds ominous. And then, BOOM. Twitter released its own Blackberry app and acquired Tweetie, which has a popular iPhone and desktop app. The threats are over, Twitter fired missiles at its developers.

Anyone who didn’t see this coming was in denial. Seesmic founder Loic Le Meur is one developer who sure didn’t see it coming (disclosure: I’m an investor in Seesmic):

Seesmic founder Loic LeMeur two weeks ago, answering questions on Formspring:

Q: The “general” thinking is that Twitter will either buy Seesmic, or launch their own Seesmic/Tweetdeck killer, since they’ll eventually need to earn revenue (unless Google acquires them). Thoughts?

Loic: none of that will happem, it would be a disaster for them to compete with their ecosystem, which drives 70% of their traffic

Q: Seesmic stepped away from their proprietary products (video) and latched onto TWITTER – but, isn’t it very dangerous to be 100% tied to a 3rd Party platform where you have no control? Does it worry you?

Loic: not at all, Twitter is very respectful of 3rd party apps and we’re also on Facebook and more social networks

Loic Le Meur yesterday:

I have to admit I was not expecting Twitter to step so fast in the mobile client race themselves competing so fast with its ecosystem…As long as we keep moving and innovating and both partners treat each other in a fair way, I think we will all be safe, the hole is big enough and there are many other holes.

Oops.

Marketing software maker HubSpot has analyzed close to 9 million Twitter profiles based on data collected through its Twitter Grader tool, and has come to the conclusion that accounts with a profile picture average about 10 times more followers than those without.

That on itself is not so surprising; a Twitter profile associated with the default avatar generally screams ‘newbie’, which is generally an incentive not to follow someone unless you know that person in real life or on other social networks. There’s a good reason why spammers who create fake Twitter accounts tend to include pictures in profiles – it’s human nature to instantly trust personalized online accounts more than generic ones.

But we love stats here at TechCrunch, so here you go:

(Via Mike Volpe, who has a pretty good profile picture)

Virtual currency platform gWallet is announcing a partnership with online privacy certification company TRUSTe to reinforce gWallet ethical guidelines in the virtual currency space. gWallet partners with both brands and game developers to bring users virtual currency offers on games within social networks.

Following the Scamville controversy in the virtual offers space, the startups which provide these offers on games have been working to rid their platforms of misleading offers. In fact, Offerpal CEO George Garrick promised to take a leadership position in cleaning up scammy ads. Competitor Gwallet has also promised to never offer these type of ads, and is now partnering with TRUSTe to certify gWallet’s privacy practices. TRUSTe will also monitor offers submitted by gWallet‘s advertisers to ensure they aren’t misleading. For example, previously fake quizzes would be tied to long term mobile subscriptions, malware-laden toolbar downloads and and other scams. And Gwallet is betting on TRUSTe to keep these offers at bay.

gWallet, which recently raised $10 million in funding, was founded by serial entrepreneur Gurbaksh Chahal. gWallet works directly with brands directly as opposed to adopting an affiliate leads model and uses branded video campaigns to engage with consumers. Disney, Best Buy, K-Mart, Nestle, Coke, and The History Channel are all using gWallet’s video campaigns on social networks, which are powered by Tube Mogul.

gWallet also announced an early-stage venture fund to invest in social gaming companies and promote innovation within the social gaming ecosystem. gWallet faces competition from Offerpal and SuperRewards.

Pixelpipe, the service that lets you syndicate text, audio, video and image files to 120 different social networks, blogs and sites, is adding geolocation functionality to its site with a Foursquare integration. The true virtue of Pixelpipe’s service is the fact that it lets you publish all types of files to various social networks and sites from a centralized place. And the startup offers its service on mobile devices, including a nifty Android app, as well.

Using Foursquare’s API, Pixelpipe now allows you to add check-in to a location with a link to media captured at the venue, which is hosted on your Pixelpipe Page. And you can check-in to a location with media (text, photo, video, audio or a file) with Pixelpipe’s Android app. Pixelpipe will present a list of venues to a user. The number after the venue represents the number of recent check-insFor example, if you are at SXSW, you can record an audio clip or video and post the media long with your check-in to the Austin Convention Center. The link will lead vistors back to your Pixelpipe landing page.

Sort of like a Ping.fm for media, Pixelpipe automatically distributes any new audio files, images, or videos to your profiles on social networks, including Twitter, Facebook, and FriendFeed. You can choose to group these services by tags, so you can be more selective about where you’d like to to post the content. Pixelpipe’s CEO Brett Butterfield tells me that Brightkite and possible Gowalla integration will be rolled out in the future.

As the geolocation wars heat up, it seems like web applications and mobile apps, both new and old, are getting into the location game. Hot Potato, SimpleGeo and new startups StickyBits and Social Great have hooked up their applications with Foursquare. And Foursquare competitor Gowalla upped the ante with a new release.

Mobile social networks have tremendous potential to flourish in developing countries where mobile phone usage trumps internet connectivity. SMS based social networks like SMSGupshup have gained considerable traction in Asia because of this. For example, in India, there is currently a 10 to 1 mobile-to-PC ratio. Mig33, a mobile social network that involves VoIP calls, instant messaging, e-mail, text messaging, and picture sharing, has accumulated 35 million registered users of its service and is growing fast in South Asian markets such as Indonesia and India. Assuming 3 to 10 percent are active on a monthly basis, that would be 1 million to 3.5 million active users.

Mig33’s users are now sending over 1 million virtual gifts a month, and posting approximately 100 million messages a day on its network, or 1,000 messages every second. Twitter, in comparison, just passed 50 million a day. Mig33 is eying the virtual gift economy as a revenue maker because of the model’s success for China’s similar application, Tencent QQ. According to Mig33, the Chinese mobile social application has nearly 8% of its over 500 million users in China paying about $2 per month in virtual gifts and goods. Mig33 is hoping to emulate that model in markets like Indonesia, India, South Africa, Bangladesh, Kenya, and Bosnia.

Mig33 is available worldwide and optimized for more than 2,000 different mobile devices. The startup has steadily added to its app by integrating social games, user-owned groups, virtual gifting and, most recently, avatars. Avatars are actually a source of revenue for mig33, by charging users to customize and enhance their avatars. Mig33 is looking to expand the virtual economy. In fact, the startup says that its revenue stream has grown to over $1 per user per month in countries such as Indonesia and India.

Founded in 2005, mig33 is backed by Accel Partners, Redpoint Ventures and DCM and has raised a total of $23.5 million.

Regular readers will know my love for all things location. In particular, these check-in location-based services fascinate me, mainly because I see them as a bridge between social networks as we’ve known it, and actual social interaction in the real world. Foursquare has been my app of choice over the past year (it launched almost exactly a year ago at SXSW). But the latest version of Gowalla has me thinking about switching sides. At the very least, I’ll be using both at all times now.

Gowalla version 2.0 for the iPhone just hit the App Store today. With it, you’ll notice a few different things. First and foremost, the overall look has been updated from a sort of Army green, to a more subtle light green that is much easier on the eyes. More significantly, the toolbar has been reworked so that now social activity is front and center when you load the app, while your own activity is the last tab. Both of these changes are things I’ve complained about since day one with Gowalla, so they’re certainly welcome. But that’s not why I’m excited for the app. I’m excited because it takes the idea of the check-in and extends it.

Specifically, you can now add pictures and comments to check-ins in Gowalla. This makes for a much richer social experience both using the app and the website (the data goes over there as well). As founder and CEO Josh Williams describes in the video below, there were a lot of people who wanted to talk about the social activity on Gowalla, but previously they had to text message or email their friends to say something like “hey I saw you check-in at the restaurant, want some company?” Now, that type of dialogue can take place all within the app.

Now, others have tried to add additional layers to check-ins in the past. Why I think it works with Gowalla 2.0 is because they keep it simple. The application is extremely handsome (since the beginning, everyone is quick to note how good the designers are working for the team) and intuitive. There are only a few basic things you can do, and all are obvious from the main screen. You can either check-in at a venue, comment on your friends’ check-ins (with the new chat bubble in the stream), look at the spots around you, see trips (pre-planned venue excursions), or look at your own activity.

Previously, with Gowalla, I thought the focus was too much on their virtual items. Those are now tucked away in your Passport (your profile). They’re still important, and will be increasingly so for Gowalla’s revenue model (trading virtual goods for real-world items), but they’re not in your face, confusing users.

All that said, there are two downsides still to the service. First, the social activity stream includes everybody that your friends with. With Foursquare, the people currently in the same city as you are highlighted; Gowalla doesn’t do that. I suspect that will be very annoying to my friends not going to Austin this week for SXSW. Their stream will be a constant reminder that they’re not there — and they likely could care less about my check-ins, since they can’t possibly come and meet me.

The second downside is that Gowalla’s API remains read-only. That means while other services can pull out Gowalla’s data, they can’t put anything back in. That means there will be no Gowalla apps besides the ones they make (at least for now). Williams explained the rationale behind this as Gowalla wants to stay in control of the user experience (a rather Apple-like argument). That makes some sense, since there are all these virtual goods that will be flying around, and it will be hard to make sure every third-party app is implementing them correctly. Also, Gowalla is much more strict about its location-based check-ins then say, Foursquare. They’re so strict, in fact, that it’s been an issue in the past (and in some cases, still is), with people not being able to check-in places they’re actually at because the GPS is wonky. At the same time, this helps a lot with gaming the system, and that will be increasingly important as Gowalla strikes deals with partners based around check-ins.

Listen to Williams talk more about the new app, as well as his thoughts on AT&T’s network, some SXSW specials, rivals, and yes, even the news that Facebook is apparently looking at federating some of Gowalla’s (and Foursquare’s) data for its own location offering. He also notes that with the new release, Gowalla is expanding the idea of checking-in to be more of a bucket of elements now, including images and comments. Interesting. (Sorry in advance that I shot the video vertically on my iPhone — gotta stop doing that.)

You can find Gowalla 2.0 in the App Store here. It’s a free download.

It seems that just about every company, advertiser, and even plenty of users associated with the location space emailed me with pitches, ideas, thoughts, etc. To say that space is red-hot right now, is putting it mildly. One of the companies that reached out to me was Brightkite, one of the earliest hot location players.

CMO and co-founder Rob Lawson admits that the network has been “pretty quiet for a while,” but hints at some exciting stuff coming up for March (yes, around the time of SXSW). But he also wanted to share some things they’re working on right now, and a few interesting bits of data.

Notably, Brightkite has over 2 million active users currently around the world. While that might seem small compared to the bigger social networks like Facebook and Twitter, that’s actually four times the size of the newer rival Foursquare, that is getting much of the hype these days. Another interesting tidbit: Brightkite has had localized promotions in place for some time now, and they’re seeing strong usage.

What users of Foursquare may know as check-in or mayor special, Brightkite calls Local Promotions. And they have a page on the site where local businesses can sign up for free. On that page, they note:

We would love to help your bar, cafe, coffee shop, or business reach out to the local community through local promotions. We’ll let nearby Brightkite folk know your business gives them preferential treatment, and that they should stop in for a visit. Fill out the form below to get started.

Brightkite says these promotions are seeing a lot of interest from all types of brands. And usage is strong with over 100 brands including big ones like Gap, Ben & Jerry’s and Time Warner Cable, seeing over two percent response rates when these notifications are inserted into users stream. And the best ones are seeing five to ten percent. When compared to more traditional ads, those numbers are very solid.

Like Foursquare check-in and mayor specials, the Brightkite deals offer things like free (or heavily discounted) drinks and meals, but also extend to things like discounted hotel rooms, car rentals, and even dry cleaning.

So is Brightkite making any money off of these? Yes. While many of the smaller local businesses use the service for free or close to free (to both prove the model and drive growth), Lawson notes that some of the big national brands are spending some big time money to advertise locally. These campaigns range from $10,000 to $200,000, Lawson says.

Something else that interests me about Brightkite is their unique approach to social relationships. When it started, Brightkite had a symmetrical model, much like Facebook and Foursquare, which requires users to accept each other as friends. But late last year, the company switched the model to be an asymmetrical one, like Twitter, where one party can follow another without permission.

This may seem like a horrible idea for a location-based service given the privacy implications, but Brightkite’s is a bit different of an asymmetrical model. “Our model is asymmetrical (like Twitter), but reversed. With Twitter, you decide who to follow but anyone can see your content.  With Brightkite, you decide who to share your content with, but you can only see others if they decide to share with you,” Lawson notes. He continues, “We are convinced this is the right model for location based services – people want to be in control of who knows where they are. We turned away from the handshake model (Facebook, Foursquare) because we found users didn’t like the social pressure of having to accept a friend request. Just because you are happy to share your location with me, doesn’t mean I want to share mine with you, even though we want to maintain a relationship.“

As someone who has dealt with this many times before, I see his point. Lawson says that generally Brightkite users have been receptive to the changes, but says that some older users liked some of the more advanced features of the old model better — and Brightkite is working to get some best-of-both-worlds options for them.

Brightkite merged with another location-based network, Limbo, last year and raised some new funding. They face a battle in warding off the fast-charging hot location networks like Foursquare and Gowalla (not to mention Yelp and the new Google Buzz), but all of them appear to be benefiting from brand interest in the local advertising space.

Facebook has acquired its third company, Malaysian startup Octazen Solutions. Facebook says this is largely a talent acquisition, according to GigaOm. Octazen has a slightly different story on their home page, saying Facebook acquired “most of the company’s assets and to employ those assets in a different direction.”

Either way, it’s leaving some people scratching their heads. Said one senior engineer at a competing company that we spoke to this evening, “Facebook just bought the web’s most talented and creative scrapers that have gotten around everyones rate limits and detection systems.” Said another person we spoke with this evening who is knowledgeable of Octazen’s product, “Facebook is so sanctimonious about protecting their own user data through Facebook Connect, but Octazen has been scraping user data for years off terms of service and then reselling it.” Both sources asked to remain anonymous.

Facebook, for their part, have not yet responded to our request for comment.

What exactly has Octazen been up to? The company is mostly about above-board contact importing from one service to another – signing in to Gmail from Facebook, for example, to import your contacts there and add them as Facebook friends. Much of this is done via OAuth and APIs, but Octazen is known to dive much deeper for data.

One example – Octazen will sometimes collect and store user credentials directly, and sign into large social networks and other sites as if they were the user, say multple souces. Then they’ll download the address book and social graph. A percentage of your friends on that service might be users of the service (now Facebook) paying Octazen, and you’ll be asked to friend them. But there’s a big question about what happens to the rest of the data as well, and if Octazen is storing a shadow social network in violation of terms of service to recommend user connections down the road. And they may look deeper at data than they should – at email header information, for example, to get a better understanding of who you communicate with the most.

But the most unnerving part of Octazen, say our sources, is the fact that they are very, very good at scraping data at scale without being detected. They may hit a service using lots of different IP addresses, for example, and remain undetected. Octazen could, they say, scrape very public sites like Twitter, where the social graph is on each profile, in a way that Twitter wouldn’t know it’s happening.

In 2007, for example, People were buying and running Octazen scripts to scrape contacts in a very sketchy way: “So we use this toolkit from Octazen to scrape contact lists off of various sites. Our ever eager users (ab)used this feature so much that hotmail blocked us.” The poster found a way to access Hotmail’s API instead of just scraping to get the data, and Octazen responded, saying “Very nice indeed”

Our understanding is that Facebook already uses Octazen to mysteriously determine your long lost friends and suggest that you re-connect with them (leading to scores of emails into our inbox that Facebook is somehow reading emails or otherwise getting data they shouldn’t be).

The big question is why Facebook would need to acquire a company located half way around the world if all they were doing is standard address book imports via OAuth and APIs, or proprietary but well documented protocols like Facebook uses. The implication is that these guys have serious expertise in data gathering at scale that may sometimes be in violation of the terms of service of the sites being harvested.

This is obviously just one side of the possible story, albeit based on hard evidence of Octazen’s shady prior practices and via multiple sources. But until Facebook explains this acquisition in more detail, we don’t have much more to go on.

We’ve been covering the growth of  Meebo’s chat bar extensively since its launch: after a fairly slow ramp up in 2008, it’s since been deployed to 130 partner sites and now has a reach of 100 million unique visitors. Now that the company has landed partnerships with a number of large publisher sites and social networks, it’s settings its sights on a new target: shopping. The company has been approached by various online retailers to see how they could help make shopping sites more social, and now they’re making an effort to expand into the market.

From a functionality standpoint, Meebo isn’t changing much about the bar to suit retailers — you’ll still drag and drop items to share them with friends, and you can chat with buddies using integrated services like Google Talk, Facebook Chat, and AIM. The big differences will lie in the monetization strategy and the level of analytics retailers will be able to take advantage of.

Revenue from the Meebo Bar primarily revolves around the ad unit that appears at the far left side of the screen. So far, the company has been getting an interaction rate of around 1% (which is relatively high) with ads from major brands. But while these ads have been targeted to some extent, they haven’t typically been promoting products on the site the user is currently browsing.

With the tweaked Meebo bar, retailers will be able to promote their own sales, and brands can pay to promote certain items on the store. For example, if I was browsing Best Buy online and ran a search for “printer”, HP could run an ad pointing to their newest model (note: this is hypothetical, Best Buy isn’t a partner site). Meebo also intends to use ad retargeting across its various partner sites — if you ran that query for “camera” and later went to MyYearbook (which runs the Meebo bar), the bar might show you ads for cameras.

As with publisher sites, retailers will be able to tweak what meta data their shared items include on sites like Facebook and Twitter. So if I decided to share the printer from the example above with my friends, my shared item on Facebook could include its price and rating in the shared link, as opposed to the generic summary that’s usually produced. Meebo is also planning to release a real-time notifications API in the near future, which will let these retailers send out promotions to users as they’re browsing their sites.

At this point, Meebo’s roster of retail partners is small — the only partnership they’d confirm at this point is with ValueClick Brands, which is behind sites like smarter.com, couponmountain.com. But the company is currently in talks with some large online retailers.

Of course, turning shopping social is easier said than done. This isn’t a new idea — we’ve been covering sites trying to figure it out for years, some of which have failed. Competitors include Kaboodle, ThisNext, and plenty of others. Meebo may be able to rise above the rest because it will be directly integrated into these retailer sites, and won’t rely on a destination site or bookmarklet for sharing. That said, it’s going to have to convince these retailers that it’s worth their time and screen real estate to integrate the bar in the first place.

Image by myklroventine

Here’s how Kwedit works: they let users take on fake debt instead of paying for virtual goods with real money (or via scammy or legitimate offers). A user promises to pay later. It’s not an enforceable promise, and there is really no consequence if a user doesn’t pay. But there are built in incentives to pay it off, and Kwedit expects some percentage of people to actually do so.

As users take and pay off, or default, on Kwedit promises, a virtual Kwedit score moves up and down just like a real-life credit score.

Users get more credit (err, Kwedit) when they actually pay the stuff they agreed to. And if they don’t pay, the kwedit score goes down and getting more Kwedit becomes difficult. There’s some risk that users will try to sign up under another name to start fresh – but since most of the virtual games are on social networks and tied to established identities, that won’t work very well.

Kwedit also makes it very easy to pay off promised amounts. Most users won’t have credit cards, so they can’t pay via normal online methods. But users can print out (or save on their phone) a bar code and take it to any 7-11 store in the U.S. for payment. Or they can mail in cash via a pre-printed postage paid envelope (called the Kwedit mailer). And there’s a third way as well – users can ask other to pay the Kwedit for them via “pass the duck.” It’s a social payment feature that sends a message to a friend or family member asking them to pay.

What do I think of this? I think it’s brilliant. Social gaming companies like Zynga have said that they can only monetize a few percentage points of users via direct payments. They try to increase that number via offers, which is a slippery slope towards Scamville. Kwedit falls in between direct payments and offers. And even if users default, the Zyngas of the world aren’t out any cash. They’re just giving away virtual stuff in exchange for the Kwedit, after all.

I have some concern about cannibalism, where a user chooses Kwedit instead of paying directly even though they have a credit card. The company says that will certainly be an issue, but they think that on balance they’ll be a net-positive payment option.

If Kwedit’s early days are successful, look for all the gaming companies to jump on board quickly. And I also think this is a great idea for other virtual goods services – like online music. I’d love to pay for music on iTunes or MySpace music via Kwedit. At some point, we may just be able to. At launch Kwedit is available on 100 social games, and also as an option on Social Gold.

Is Kwedit unreliable? Yep. Is it Brilliant? Absolutely.