Facebook, the market-leading social networking site, has been forced to change its global privacy policy following negotiations with the privacy commissioner in Canada. A report by the BBC says that Facebook was recently found to breach Canadian law by holding on to users' personal data indefinitely and has therefore agreed to make changes to the way it handles this information and be more transparent about what data it collects and why.

The other main stumbling block that has been an issue for some time has been the inability for users to deactivate or delete their account, but this is now being changed so that it will be possible in the future. The decision could also have implications for other social networking websites.

As well as updating their privacy policy, Facebook has said it will make changes that will give users more control over the data they provide to third-party developers of applications, such as games and quizzes. These changes will require applications to state which information they wish to access and obtain consent from the user before it is used or shared.

An article from the Sydney Morning Herald considers the usage caps in the Australian broadband market which are potentially holding back Internet growth in the country and are an outdated system which is virtually non-existent in other countries.

All the main ISPs in Australia price on a monthly usage cap, which for the current web applications of social networks, online videos and photos, are outdated and restrictive. In contrast, the article takes the example of some US Internet providers suggesting 250 gigabytes-a-month limit which led to consumer outrage, despite the fact only 0.003% of US broadband users exceed that level!

The article then considers the options for changing the pricing system in Australia and the potential opportunities for new providers to break the mould. It is possible that the new management of Telstra is more open to change but it's likely to take time and be linked with the national broadband network.

MediaWeek reports on new research from Dynamic Logic that claims to show that the most effective display ads on the web are those that are integrated within a web page's content, rather than larger, dominating adverts, in terms of driving traditional brand metrics such as awareness and purchase intent.

Dynamic Logic analysed 2,390 display campaigns over 3 years and found that half banners (234 x 60 units) and rectangles (180 x 150 units) proved to be more effective than larger, pricier placements such as leaderboards and skyscrapers. However, these findings conflict with the current trend among web publishers and advertisers, who are pushing toward larger, more interruptive online advertising as a way to funnel brand dollars away from TV.

The survey also found that creative quality and level of sophistication are also key, so that among the 2,000-plus campaigns analyzed, rich media ads that featured video excelled in most branding categories, including awareness, brand favourability and purchase intent. Meanwhile, more basic Flash ads - seen as the most common form of display advertising - consistently achieved the lowest scores.

New figures published by US research agency, comScore, show that Google holds greater loyalty amongst its users compared to Yahoo! and Microsoft. As reported by Reuters, this new data illustrates that Google not only has a very strong market share, but also retains searchers for longer with more searches conducted each month.

The research also shows that Yahoo! and Microsoft have a combined search penetration of 73% in the US, which isn't too far behind Google's level of 84%. However, Google searchers conduct an average of 54.5 searches a month, which is about double the number of searches recorded by users of Yahoo! and Microsoft combined - these users search on average 26.9 times a month, according to the comScore report.

In terms of loyalty, the research found that Google searchers make nearly 70% of their searches on Google sites whereas people who use Yahoo! and Microsoft sites combined search there about 33% of the time and also use Google heavily. This gives the newly combined force of Yahoo! and Microsoft a challenging target to reach, which is likely to an even wider gap in Australia and other countries where Google dominates even more than in the US.

The Google Webmaster blog has announced a 'secret project' that the company has been working on - the next-generation architecture for Google's web search engine. And now they are opening the test siteup to users, requesting feedback on the performance of the new technology.

Google says their aim is to improve the size, indexing speed, accuracy and comprehensiveness of their search experience, but there's little coincidence that this announcement comes soon as the launch of Microsoft's new Bing search engine and the attention that has generated. Of course, this Google announcement has generated lots of press and online activity and comment, such as this favourable review from Information Week.

Dubbed 'Google Caffeine' the new search engine infrastructure can be viewed and tested at http://www2.sandbox.google.com/.

The new search engine seems to be faster, which probably reflects lower usage and less integration of 'universal' search results at this stage. Some searches show little difference in results to the existing search engine, whereas others do show a notable change in ranking positions, so there could be implications for some companies relying on search engine optimisation performance for their site visits. This new version will continue to be reviewed and assessed over the next few months to see what wider impact it may have on the search and online business market.

An article in Business Week considers how the use of real-time websites may start driving online business in the future. Following the success of Twitter, the ubiquitous micro-blogging site, the report interviews an investor of this site along with over 20 other companies that are developing the "real-time Web" - the term used to describe the rapidly increasing number of live social activities online, from 'tweets' to status updates on Facebook, to the sharing of news content, web links, and videos.

The real-time web is being considered by some as the Internet's 'Next Big Thing'. Although this emerging sector is so new and currently unfocused in its longer-term potential, apparently many startups are now staking claims in this field and drawing interest from investors.

It is yet to be seen how these websites can turn a healthy profit and drive future growth in the web. Twitter is still exploring ways to generate revenue from its huge user base, while Facebook has struggled to turn its rising popularity into profits. However, with the growth of high-speed Internet connections, a growing number of mobile devices with full web browsers, and new technologies that enable instant transmission of messages and data, the opportunities for real-time communications are growing and now need to be applied to a profitable business model.

The latest Internet advertising figures published by IAB Australia show continued growth in the online advertising market which is bucking the general advertising market trends. The latest figures for the April-June quarter and the past financial year show an 18.5% year-on-year growth for the 12 months to the end of June and a 9.8% increase for the quarter.

The Online Advertising Expenditure Report (OAER) is published by IAB Australia using data compiled by PricewaterhouseCoopers. The new figures show that online advertising expenditure in Australia for the year ending June 30 2009 exceeded $1.8 billion and totalled $453 million for second-quarter 2009. This means that Internet advertising is still expected to hit the $2 billion spend level for this year.

In the past financial year, Search and Directories accounted for 49% of the total advertising expenditure and saw a growth of 25% year-on-year. General Display Advertising accounted for a 27% share of the market and grew by 19.6% and Classifieds held a 24% share and grew by just 6% over the previous year.

For the second quarter of 2009, the Search and Directories category increased by 19% on the same period last year, with General Display increasing by 10% and Classifieds saw a decrease of 5.9%. The IAB commented on the report that these latest figures demonstrated the continued confidence in the market for online advertising at a time when the economic situation is challenging.

Not surprisingly, search advertising continues to do well and is driving the growth in the industry due to its targeted and measurable nature, although the bulk of the figures in this sector remain estimated since Google does not reveal these to the IAB researchers. Display advertising is also showing continued support as a growing medium as Internet usage continues to develop. Not surprisingly, however, is the decline in online classified spend which has been impacted by the declines in the employment, real estate and automotive markets.

Both Twitter and Facebook have been subject to some extreme attacks in the past few days from online hackers who are targeting these high profile social networking sites with the aim of causing disruption to their service. As reported by the BBC, Twitter was taken offline for more than two hours whilst Facebook's service was "degraded" as both sites were subject to so-called denial-of-service attacks.

These attacks can take various forms but often involve a company's servers being flooded with data in an effort to disable them. Such attacks often use networks of computers - known as botnets - which are under the control of hackers, often as the result of previous viral attacks or 'Trojan horses' that have infected computers around the world. The strategy is often employed by protestors against, for example, government websites or to disrupt high profile sites for publicity.

After having tested this new function on selected accounts, Google has announced the launch of their new bid simulator tool within the AdWords management interface. The tool can be used by advertisers to view the potential impact of a different bid level within the advertising results for each term. Although Google is quick to point out that it can't predict the future, the bid simulator does allow users to explore what could have happened if they had set different keyword-level bids.

Using data from the past 7 days, the bid simulator re-calculates the number of impressions for which an advert could have shown had the advertiser chosen a different maximum CPC, how many clicks the ad could have received for those impressions and how much those clicks could have cost. Although the figures are, of course, estimates based on expected behaviour and recent trends, the tool does provide some increased transparency into the AdWords auction and gives users some more data to help make more informed bidding decisions.

The new August issue of the monthly Web Marketing newsletter has been published, covering some of the recent stories on web search and online marketing trends.

This month's edition looks at Microsoft and Yahoo!'s new partnership which combines their search technologies and market reach with the aim of taking on Google search at its own game. It also reviews the Search Query function in the new Google AdWords interface and how to use it to refine campaigns and save money. Finally, the new issue looks at Custom Reporting in Google Analytics and how this can be used to personalise reports more precisely to include more relevant data.

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