April 26, 2024

Facebook Responds to Anger Over Proposed Instagram Changes

But when Mr. Pinnix, 40, learned this week about changes to the company’s terms of service that would apparently allow his photos to be used as advertisements, he did not hesitate. He deleted his account and has not looked back.

“Many of the photos I take are of my wife and kids,” he said. “The idea that those could be used in ads without my consent is disconcerting.”

Concerns like those have been mounting on social networks this week as Instagram users reacted to the coming changes, part of a push by Facebook, which bought Instagram this year, to make money from the service.

On Tuesday evening, the complaints, which included angry Twitter posts and images on Instagram protesting the changes, prompted action. Kevin Systrom, a co-founder of Instagram, wrote a blog post saying the company would change the new terms of service to make clearer what would happen to users’ pictures.

“We’ve heard loud and clear that many users are confused and upset about what the changes mean,” he wrote. “I’m writing this today to let you know we’re listening and to commit to you that we will be doing more to answer your questions, fix any mistakes and eliminate the confusion.”

Eric Goldman, an associate professor at the Santa Clara University School of Law, said the latest skirmish between Facebook and its users was part of the sometimes uncomfortable dynamic between companies offering free online services and their eventual need to turn a profit from them.

“The interest of the site is never 100 percent aligned with the users, and the divergence inevitably leads to friction,” Mr. Goldman said. “It’s unavoidable.”

When Facebook announced the changes on Monday, it provided few details about how it would integrate advertisements and photos, other than to say that when the changes took effect on Jan. 16 they would not affect any photographs uploaded to the service before then.

That did not prevent unhappy users from threatening to take their portfolios of photographs to rival services, such as EyeEm, another social photo-sharing application. Many, including Mr. Pinnix, considered returning to Flickr, the former king of photo-sharing services, which is owned by Yahoo. In a stroke of lucky timing, Flickr had just released a new application for the iPhone that has drawn considerable praise from users.

The operators of services like Instaport.Me and Instabackup, which let people create copies of their Instagram photos, said they were seeing higher-than-average volume.

Linus Ekenstam, who helped found a service called Copygram that lets people back up their Instagram accounts and order physical prints of their favorite photos, said demand for the company’s free exporting tool had skyrocketed.

“It’s a thousand percent more activity than we’re used to,” he said. “Today is crazy.”

He estimated that 10,000 people were using the exporting tool, and 1.5 million photographs had been backed up.

Of course, that is a sliver of the expanding Instagram universe. The company has said that more than 100 million users have contributed more than five billion photographs to the service. But should that momentum slow, it could damage the plan for producing advertising revenue on the scale Facebook was counting on after spending $735 million in cash and stock to buy Instagram. The company also risks scaring off skittish brands and advertisers who would not want to anger Facebook or Instagram users who disagree with how their images are used.

The history of the social Web is full of cautionary tales of companies, including Digg , whose users eventually got so fed up with how the companies meddled that they fled, leaving the companies in ruin.

In Tuesday’s blog post, Mr. Systrom sought to quell the mounting unrest and reassure users that the company would not be peddling photographs of children playing on the beach or friends partying in nightclubs to the highest bidder.

“To be clear, it is not our intention to sell your photos,” he said.

He said that the company also did not intend to put its members in advertisements.

“We do not have plans for anything like this, and because of that we’re going to remove the language that raised the question,” he said. “Our main goal is to avoid things likes advertising banners you see in other apps that would hurt the Instagram user experience.”

He did concede that the company might do something like promote a brand like Topshop and show Facebook visitors which of their friends already follow Topshop, blurbs that could include their user name and avatar.

Mr. Systrom also reassured Instagram users that they still “own their content and Instagram does not claim any ownership rights over your photos.”

“Nothing about this has changed,” he said.

Of course, Mark Zuckerberg, Facebook’s chief executive, said nearly the same thing in April: “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook. That’s why we’re committed to building and growing Instagram independently.” Since then, the company has cut off Instagram’s easy integration with Facebook’s rival Twitter and bound the photo service more tightly into Facebook.

Rebecca Lieb, an analyst with the Altimeter Group, said worries about Facebook changing for the worse had become common almost any time Facebook altered its site, whether in the design or in its privacy policies. It underscores the importance and omnipotence of the service in its users’ lives as much as it signals a distrust of Facebook.

“There’s always a reaction when Facebook does anything because the user base is so unbelievably large,” Ms. Lieb said. “But while what its users say can be very loud and very viral, what they do can be two very disparate things.”

“There are always Facebook users who say ‘This is the last straw,’ ” she said. But in the end, she said, “There’s not a lot of portability. Where would you go?”

Article source: http://www.nytimes.com/2012/12/19/technology/facebook-responds-to-anger-over-proposed-instagram-changes.html?partner=rss&emc=rss

DealBook: Chief Sells $25 Million in Shares of Jefferies

The chief executive of a Wall Street investment bank sold a large stake in his company to pay off a personal debt on Thursday, a move that frightened its shareholders during an already scary day in the markets.

Richard B. Handler, the head of the Jefferies Group — and the highest-paid chief executive of a major Wall Street bank last year — sold two million shares, or $25.2 million worth of stock, to the bank’s largest shareholder, according to a securities filing.

The news sent shares of Jefferies tumbling more than 11 percent, before they recovered. Shares closed at $12.37, falling 3.7 percent, roughly in line with the broader market.

Mr. Handler sent a short memo to his employees explaining his reason for the sale. The transaction was tied to “significant tax payments” that he owed because of recently vested Jefferies stock. He said he had previously taken on debt to pay the tax bill because, as chief executive, he had been blocked from selling shares.

“While I am not happy about reducing my interest in our firm,” Mr. Handler said, “being out of debt is the prudent thing for me and my family in a turbulent world.”

Mr. Handler sold his stock in a turbulent market. The Dow Jones industrial average dropped more than 500 points Thursday before closing down 391 points, or 3.5 percent.

It was also an unpropitious time to sell Jefferies stock. All financial services shares have been hard hit this year, but Jefferies has fallen more than most. Its stock has fallen more than 50 percent year to date, while the Standard Poor’s 500 stock-market index is down about 10 percent. Its shares fell sharply on Wednesday as analysts called the bank’s third-quarter results disappointing and cut its earnings estimates.

Goldman, in a research report, said it saw “continued downside” in the stock. The firm has a sell rating on the company.

Thomas Tarrant, a spokesman for Jefferies, declined to comment.

Chief executives rarely sell large chunks of stock, especially in down markets, because shareholders often consider it a vote of nonconfidence. In recent years, some executives have sold down their positions to assist in tax planning. Last year, Steven A. Ballmer, the chief executive of Microsoft, announced the sale of a portion of his holdings in part for tax reasons.

Still, Mr. Handler’s sale had Wall Street trading floors abuzz on Thursday. Mr. Handler, 50, is one of the highest paid chief executives not only in finance, but in the country. In 2010, he was granted total compensation valued at $47.3 million, which included a bonus for 2009 and stock awards for coming years. In contrast, Lloyd C. Blankfein, Goldman Sachs’s chief executive, made $13.2 million in 2010.

The sale also surprised the staff at Jefferies, which, like many Wall Street banks, is known for a staunch stock-ownership culture where sales of the company’s shares are frowned upon inside the bank.

Mr. Handler, who has been the chief executive for the last decade, is the largest individual shareholder in Jefferies and has not sold any of his stock since 2006. After his sale of two million shares, he still owns about 12 million shares, or 6 percent of the shares outstanding. Those shares are worth $148 million based on Thursday’s closing price.

Adding to the intrigue was the news that Mr. Handler had sold his shares to the Leucadia National Corporation, the bank’s largest shareholder. Leucadia, a low-profile conglomerate, owns about 26 percent of the company. Leucadia acquired Mr. Handler’s 2 million shares at $12.58 a share, approximately the market price.

“I think they made a great buy and am gratified by their belief in and support of Jefferies,” Mr. Handler said in his memo.

Jefferies, which is based in New York and specializes in trading debt and stocks, has expanded aggressively in recent years, in part taking advantage of some of the dislocation from the financial crisis. Mr. Handler, a charismatic leader, is a former trader at the investment bank Drexel Burnham Lambert, which collapsed in 1990 in the turmoil of the junk-bond market.

“I am sharing this personally with all of you so you are aware of the exact details so rumors or noise do not distort the facts,” Mr. Handler said.

Article source: http://feeds.nytimes.com/click.phdo?i=379280f04722d1d39d053966f5a5f210