MONEY Tech

How to Flip Your ‘Kill Switch’ and Protect Your Smartphone from Thieves

140826_EM_KillSwitch
Nathan Alliard—Getty Images

Starting next summer, every smartphone sold in California must have an anti-theft device. Here's what you can do to safeguard yours right now.

Smartphone theft just got a whole lot less lucrative. Yesterday, California Governor Jerry Brown signed a bill requiring that all smartphones sold in the state include a “kill switch,” software that makes it impossible for thieves to use stolen phones.

Here’s something you may not know: Your phone could already have such a switch. Both iPhones and Samsung phones have new software that “locks” the device so that unauthorized users are unable to activate it. According to the San Francisco Police Department, the city saw a 38% drop in iPhone thefts in the six months after Apple released its kill switch. In June, Google and Microsoft promised to offer kill switch technology in their next operating systems, and for now, both offer other apps to help you protect a lost phone.

The California bill requires that tech companies make the kill switch feature standard on all phones starting July 1, 2015. In the meantime, you can enable your phone’s available security features by turning on the right settings. Here’s how.

iPhones

Do this right now: Make sure you have iOS7 software (if you haven’t already, you can download the upgrade on iTunes). Go to Settings, then iCloud, and then flip on “Find My iPhone.” If your phone gets lost, you’ll be able to track it on icloud.com.

Do this if your phone gets stolen: Go to icloud.com/find and sign in using your Apple ID and password. There, a button lets you play a sound on your iPhone to help you locate the device. You can also put the phone in “lost mode,” which gives you the option to display an alternate phone number and a message explaining that the phone has been lost, so Good Samaritans will be able to find you.

If you’re sure your phone has been stolen, erase the data. Remember that this is a last resort: Once you’ve erased your phone, you won’t be able to track it. But that way, the only way someone will be able to activate it is by entering your Apple ID and password. (And in the event that you find your phone again, you can restore the data using iCloud backup.)

Android

Do this right now: Android doesn’t have a kill switch yet, but it has still some helpful anti-theft features. Start by downloading the free “Android Device Manager.”

Do this if your phone gets stolen: Sign in to the Android Device Manager using your Google account and password. Again, you’ll be able to play a sound, track your phone, reset the screen lock PIN, and erase the data. (Remember, once you erase the data, you won’t be able to track the phone anymore.)

However, hackers may still be able to reset and reactivate the device. Expect a tougher kill switch feature in Google’s next software upgrade.

Samsung

Do this right now: If you’ve got a Samsung Android phone, you’re in luck. Go to Apps, then Settings, and then Security. Check the box next to “reactivation lock.” You’ll be prompted to either sign in to your Samsung account or create one.

Do this if your phone gets stolen: Go to findmymobile.samsung.com and log in with your Samsung account. Like “Find My iPhone,” Samsung lets you track your phone, play a sound to help you find it, and lock your device remotely.

If your phone has been jacked, the reactivation lock renders it useless. Once you’ve turned the feature on, no one can reset the device without your Samsung account and password.

Windows Phone

Do this right now: Windows phones don’t have kill switches yet either, but they do have a device tracking feature. Go to Start, then App, then Settings, and then “Find My Phone.” You can opt to save your phone’s location every few hours, which could give you a more accurate reading of its last known location if the battery dies.

Do this if your phone gets stolen: Go to windowsphone.com and sign in with your Windows Live ID. You’ll be able to track your phone, play a sound, lock your phone with a message, and erase your data.

Windows also plans to add a kill switch in the future.

MONEY Kids and Money

What It Costs to Raise a U.S. Open Champion

Serena Williams of the U.S. raises her trophy after defeating Victoria Azarenka of Belarus in their women's singles final match at the U.S. Open tennis championships in New York September 8, 2013.
Does your kid want to be the next Serena Williams? Start saving now. Mike Segar—Reuters

Want your kid to win the U.S. Open? Start shelling out $30,000 a year.

Serena Williams won her first U.S. Open at age 17 and her fifth at age 31, just last year. But can she defend her crown against the newest upstarts? It all starts on August 25, when Williams goes head-to-head with rising star Taylor Townsend. And 18-year-old Townsend won’t be the only young talent to watch in Queens: 20-year-old Canadian Eugenie Bouchard is seeded no. 7, and 19-year-old Australian Nick Kyrgios will try to build on his surprise upset against Rafael Nadal at Wimbledon.

If those youthful feats fuel your kid’s dream of tennis stardom, then get ready to open your wallet. In the United States, families of elite tennis players easily spend $30,000 a year so their kids can compete on the national level, says Tim Donovan, founder of Donovan Tennis Strategies, a college recruiting consulting group. That can start as early as age 11 or 12. At the high end, Donovan says, some parents spend $100,000 a year.

On what, you might ask. Here’s the breakdown:

  • Court time. Practice makes perfect, but practice can be expensive, especially if you need to practice indoors in the winter. In Boston, where Donovan is based, court time costs about $45 an hour. In New York City, court time can run over $100 an hour.
  • Training. Figure $4,500 to $5,000 a year for private lessons, plus $7,000 to $8,000 for group lessons—in addition to the aforementioned court fees to practice on your own.
  • Tournaments. National tournament entrance fees run about $150. Plus, you have to travel to get there. Serious players will go to 20 tournaments a year. Donovan estimates that two-thirds of the tournaments might be a few hours away, but elite athletes will need to fly to national events six or seven times a year. Want to bring your coach with you? Add another $300 a day, plus expenses.
  • School. You’ve already racked up $30,000 in bills. But if your kid is really serious, you might also spring for a special tennis academy. Full-time boarding school tuition at Florida’s IMG Academy costs $71,400 a year.

So what’s the return on investment? While most parents don’t expect to see their kids at Wimbledon, many still hope that tennis will open doors when it comes time to apply to college. But the reality is that athletic scholarships are few and far between. In 2011-2012, only 0.8% of undergrads won any kind of athletic scholarship, says Mark Kantrowitz, publisher of Edvisors.com.

Opportunities are particularly limited for boys. Donovan notes that because of Title IX—which requires that schools provide an equal number of scholarships for men and women—a Division I college with a football program might offer eight full tennis scholarships for women, but only half as many for men, because male scholarships need to go to the football players.

Bottom line: If you spend $30,000 a year hoping your tennis star will go to college for free, you’ll probably be disappointed with your ROI.

“Recipients of athletic scholarships graduate with somewhat less debt than other students but not significantly so,” says Kantrowitz. “The main benefit of athletic scholarships is providing access to higher-cost colleges without increasing costs, moreso than reducing the cost of a college education.”

That’s where Donovan comes in: For $3,500 to $10,000, Donovan Tennis Strategies provides different levels of assistance with the college application process. Oftentimes, Donovan’s clients are able to pay full tuition but want additional help leveraging tennis to get their kids into better (and more expensive) schools.

The strategy can pay off. According to Donovan, recruited athletes have a 48% higher chance of admission, sometimes even with SAT scores that are more than 300 points lower than those of non-athletes. “The coach can go in and significantly advocate for somebody and change the outcome,” he says.

So if you’re a parent to a budding tennis star, can you foster his or her talent for less? The IMG Academy does offer scholarships to promising young athletes whose parents can’t pay full freight, and the United States Tennis Association offers some grants and funding. But ultimately, players need to log hours on the court to get good, and that costs money.

“The more you’re playing, the better you’re going to be,” Donovan says. “That’s pretty well documented … and that adds up over time.”

MONEY

This Is Who Facebook Thinks You Are

Nighttime exterior view of apartment window with woman working on laptop
Patti McConville—Getty Images

Last quarter, Facebook made $2.8 billion off our personal information. Starting this summer, the social network is letting us see exactly what pieces of our online identities it reveals to advertisers. Here's how.

You might think Facebook is free. But the social network posted $2.8 billion in second quarter revenue two weeks ago, and that money came from somewhere — namely, the personal information that Facebook has spent years mining from your online activity, against which it sells hyper-targeted advertising. If you are one of Facebook’s 204 million users in the United States and Canada, the social network made about $5.79 in advertising revenue off you last quarter.

On some level, we all know that Facebook does this, and on some level we all accept it. But starting this summer, Facebook is letting us lift the curtain and see exactly what pieces of our online identities it reveals to advertisers. If you hover over the top, right-hand corner of any Facebook ad, you can access a dropdown menu that will let you hide certain ads, rate ads as helpful, or — this is the interesting part — see why a particular advertiser chose to target you. Among the potential reasons: your age, your gender, your location, pages you’ve liked, pages your friends have liked, your propensity to click on similar ads, where you shop online, what kind of phone you have, your inferred hobbies … or “other reasons.”

When I checked my own page, I learned that Facebook thinks I love Chipotle Mexican Grill (true), I watch ice hockey (false), I have an iPhone 5s (true), I’m a biker (false), I live away from my family (true), and I’m a “hipster” (really?).

140807_FF_Facebook_Kara
Just a typical night with my husband, 8-year-old daughter, and Roku video player.

I’ll warn you that the whole exercise is enough to trigger a minor identity crisis. Take an ad for Roku, a streaming video player. I saw it because Facebook determined that one of my interests is “motherhood” — which apparently placed me in Roku’s target audience. This was news to me. As a 23-year-old unmarried woman, I don’t plan to have children for many, many years. What were the inputs for THAT algorithm? Have I watched too many videos starring baby animals? Did I make too many “Gilmore Girls” references? Did my birthday set off some kind of digital biological clock? What does else Facebook know about me that I don’t already know about myself?

I asked my colleagues at Money.com to tell me what ads they see, and why. Here’s what Facebook’s got on them. (Scroll past if you just want instructions on how to find out what Facebook thinks it knows about you — and what it’s selling to advertisers.)

Ellen Stark, senior editor-at-large

140807_FF_Facebook_Ellen

Facebook thinks: She might want varicose vein treatment
Accuracy rating: 0/10
Facebook says: “You’re seeing this ad because NJ Top Docs – NJ Top Dentists – NJ Top Hospitals wants to reach women aged 30 and older who are near New York, New York. This is based on things like your Facebook profile information and your internet connection.”
Ellen says: “Really, I don’t need this! This is one of the reasons that Facebook ads can be so depressing. But at least they were targeting women as young as 30.”

Sarina Finkelstein, photo editor

140807_FF_Facebook_Sarina

Facebook thinks: She might need diapers for her baby
Accuracy rating: 10/10
Facebook says: “One of the reasons you’re seeing this ad is because The Honest Company wants to reach people interested in Gerber Products Company.”
Sarina says: “Of course every parent needs diapers. But, how does Facebook know I have a baby? My baby doesn’t have a profile page. My baby is not listed under ‘family’ on my profile. Maybe Facebook knows because, like any proud parent, I post pictures for family and friends to see? Or because I have used the word ‘baby’ in status updates? Or … I might have gone to the website for The Honest Company more than a month ago. I certainly haven’t gone to the Gerber Products Company webpage. Creepy Facebook, stay out of my baby’s nursery.”

Kerri Anne Renzulli, reporter

140807_FF_Facebook_Kerri-Ann

Facebook thinks: She might want yoga pants that look like dress pants
Accuracy rating: 0/10
Facebook says: “One of the reasons you’re seeing this ad is because Betabrand wants to reach people who are similar to their customers. We think you’re similar based on what you do on Facebook, such as the Pages you’ve liked and ads and posts you’ve clicked on.”
Kerri Anne says: “Everyone who knows me knows I never wear pants … just dresses and skirts. And if I did wear pants to work, I would not wear the same pair to yoga.”

George Mannes, senior editor

140807_FF_Facebook_George

Facebook thinks: He might keep kosher
Accuracy rating: 2/10
Facebook says: “One of the reasons you’re seeing this ad is because Kosher Ordering wants to reach people interested in Synagogue.”
George says: “I think I did a Google search for a synagogue a few days ago, or maybe I received an email from my synagogue recently. But the last time I ordered kosher take-out was about five years ago, when my in-laws were in town for a visit.”

Jake Davidson, reporter

Facebook thinks: He “returned from a trip two weeks ago” (this information was stored in Jake’s ad preferences)
Accuracy rating: 10/10
Jake says: “I did go to Vermont two weeks ago, and I posted updates while I was away. Facebook must have figured out my location. It doesn’t really weird me out. If it did, I would just turn off location services. But I’m fine with more relevant ads.”

See for yourself.

Here’s how to check how Facebook is selling you, and what the company thinks it knows about you.

1. Identifying an interesting ad.

Hover over the right-hand corner until an “x” appears, then click. For ads in the newsfeed, click the “v” button on the right-hand corner.

2. Find out why you’ve been targeted.

Once you’ve clicked on the ad, you should see a drop-down menu. If you click, “Why am I seeing this?” Facebook will give you customized information about why you got that particular ad.

Often, an advertiser has selected you based on demographic information (like your estimated age, gender, and location) or other information Facebook has about your interests. But sometimes the explanation is vaguer (like, the company wants to reach users “similar to their customers,” or they’ve paid to advertise through one of Facebook’s ad exchanges).

3. See what else Facebook thinks you like.

In the “Why am I seeing this?” tab, click “Manage your ad preferences.” Here, Facebook will tell you what information it has derived about your interests — the restaurants you like, the sports teams you support, the television shows you watch. If the information is inaccurate (or if you don’t want Facebook to show ads based on that information), you can edit your profile, but you won’t be able to opt out of ads completely. Or, give the social network more information about your interests, and you can get more relevant ads.

Tell us: What does Facebook know about you?

What kinds of ads are you seeing? Do you think targeted ads are helpful, creepy, or both? Tell us in the form below, and if you can, take a screenshot of the ad in question. We might publish your response.

Related:

 

MONEY Health Care

Here’s One Thing That’s Cheaper in the City, and It Will Help You Live Longer

New York City Cityscape
Hint: It's not rent. Charles Taylor Crothers—GalleryStock

In some states, rural residents are paying far more for health insurance. Here's why—and why that might change next year.

By many measures, city living is a racket: skyrocketing rents, expensive food, and pricy entertainment options can make for a high cost of living. But a new study from the Robert Wood Johnson Foundation finds that city residents have the slight edge on one metric: this year they had access to cheaper individual health insurance plans on the state and federal exchanges that were created under Obamacare.

Nationally, rural residents pay only slightly more: A 50-year-old nonsmoker from a rural county is spending $387 a month on average for a mid-tier silver plan in 2014, while a city denizens pay $369 for the same kind of plan, the study found. But in some states the gap is much wider.

In Nevada, for example, residents of rural counties must spend an average of $554 a month for a silver plan—57% more than their urban peers. In eight other states, country consumers are charged at least $50 a month more for the same healthcare coverage.

A chief reason for higher premiums, researchers believe, is a lack of competition. Rural areas are home to fewer doctors, which makes it hard for insurers to score discounts for their policyholders. And rural residents have fewer health insurance options. This year, on average, urban health-care shoppers had their pick of five insurers on the exchanges, the study found; those who live in rural areas had only 3.8 options. Also, urban shoppers were able to choose from one of 17 plans on average, while rural consumers saw an average of 14.2 plan options.

Another problem is that insurance is sold on a state-by-state basis, says Janet Weiner, associate director for health policy at the Leonard Davis Institute of Health Economics. Take Nevada. In a few rural counties bordering Utah and California, there aren’t that many doctors and hospitals, and many of the closest ones are out-of-state. “The insurers do not sell multi-state plans, and so even if there are more providers close by, but across state lines, they cannot expand their provider networks,” Weiner says. “This limits the ability of insurers to drive discounts and keep costs down.”

The potential good news? Rural residents could see some relief in 2015 as more insurers join the exchanges (open enrollment starts on Nov. 15). While some states, including Florida and California, have already announced premium hikes for next year, new insurers could inject some much-needed competition into the marketplaces. For instance, both Cigna and Aetna have announced plans to expand into Georgia, a state where rural customers currently pay 24% more than urban customers do for the same kind of plan. UnitedHealthcare, the nations’ largest insurer, has announced that it will sell policies on far more state exchanges next year. “If insurers see a business opportunity, rural areas may be in luck,” Weiner says.

Read more about the impact of health reform:

 

MONEY Kim Kardashian

How to Keep the Kids From Giving the Kardashians Your Kash

Kim Kardashian
Dominique Charriau/WireImage—Getty

Kim Kardashian is in the news again, and (surprise!) not because she did something good for society. The reality show starlet recently released an iPhone game, Kim Kardashian: Hollywood, and now one parent is revolting after learning the app “tricked” her child into spending over $100 on in-app purchases in just two days.

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When Ayelet Waldman, the bestselling author of Bad Mother and wife of novelist Michael Chabon, checked her son’s iTunes account she found that he had spent $120 on the Kardashians’ product — even though she and her husband thought they had adjusted their account settings to prevent such purchases.

The game, which markets itself as free, incentivizes players to buy in-game currency (called “koins”) in order to advance in the story. The game allows users to spend anywhere from $4.99 to $99.99 in a single transaction depending on how many koins they want to buy, and these sales are reportedly making Kim $700,000 a day. It’s such a clear money-grab that Stephen Colbert spoofed the app on an episode of the Colbert Report.

Kim Kardashian Hollywood
Glu Games

Luckily for Waldman, Apple ended up refunding her child’s purchases (and he’s learned to hate the Kardashians, so that’s a plus), but parents can’t depend on companies coming to the rescue when young users are fooled into handing their parents’ money over to game makers. Here’s how to secure your device and avoid unexpected bills.

1. Turn off in-app purchases entirely. It’s the simplest and most effective way to stop micro-transaction hungry apps in their tracks. On Apple products, go to the settings app and tap “enable restrictions.” That will let you disable your kid’s ability to install apps, delete apps or make in-app purchases. On Kindle Fire, just go to settings for the Amazon Appstore and turn off “in-app purchasing.”

You can also get rid of in-app purchases and other online dangers by turning off the internet entirely. To do this on Apple products, go to settings and flip the airplane mode switch. On Fire, you can do the same thing in “Quick Settings” under “Wireless & Networks.” But remember, this won’t prevent your child from making purchases if you let them back online.

2. Set up a password for in-app purchases. Setting an in-app purchasing password will let your children still be able to use in-app purchases—but only with your approval. On Apple tech, it’s as easy as going back to the “enable restrictions” setting. On Kindle Fire, it’s not quite so simple. You can use the “Parental Controls” section of settings to set a password, but the FTC says that each new purchase creates a window of time (15 minutes to an hour) when anyone using the device can continue making in-app purchases.

3. Avoid “free” apps that aren’t so free. There’s no such thing as a free lunch, and at least on smartphones, there’s increasingly no such thing as a truly free game either. According to a FTC survey from 2012, about 84% of the apps that let kids make in-app purchases were advertised as “free.” These games often require purchases to make the game more fun or decrease the difficulty to more manageable levels. It’s often cheaper to pay a couple bucks up front for a good game than risk paying more over time with an ostensibly free product.

Did your kid run up a huge bill on a mobile device? How did they do it? Did you get a refund? Do you have any advice for other parents?

MONEY wants to hear your story. Fill out the confidential form below. We won’t use your information unless we speak with you first.

MONEY identity theft

If Your Credit Card Information Was Stolen from P.F. Chang’s, Here’s Your Best Defense

Wallet exposing social security card
8.3 million: How many private records have been exposed to thieves so far this year. Olivia Locher; Prop styling by Linda Keil

Millions of private financial records have already been exposed this year. Follow this simple plan to stay safe.

Updated: August 4, 2014

If you’ve eaten at a P.F. Chang’s restaurant anytime since last October, you could have been the victim of a data breach. According to the company, consumer credit and debit card information has been stolen from 33 restaurants in the U.S. (You can find a full list of the affected locations and dates of possible incidents here).

Today, CEO Rick Federico issued a formal statement apologizing to customers and assuring them that their data has been secure since the restaurant chain identified the breach in June. In light of that news, we’re resurfacing a post from earlier this summer, with advice on how to protect yourself in the event you think your personal data has been hacked.

At least 8.3 million private records have been put at risk in 250 separate data breaches revealed this year, says the nonprofit Identity Theft Resource Center. One upshot of the leaks (up 23% over 2013 through late April): greater awareness of the threat of identity theft. Follow this three-tiered plan to defend yourself.

1. Take Advantage of Free Tools

Visit annualcreditreport.com every four months to get a credit report from a different one of the three major reporting agencies, advises Ed ­Mierzwinski at advocacy organization U.S. PIRG. And sign up for any no-cost service your bank or credit card issuer has for notifying you of activity in your account.

2. Warn All Lenders

Afraid your data has already slipped out? Put a free 90-day fraud alert on all your credit reports by contacting Experian, Trans­Union, or Equifax, says Paul Stephens of the nonprofit Privacy Rights Clearinghouse. That tells companies to use extra caution before issuing credit in your name. For confirmed identity-theft victims, alerts last seven years.

3. Lock Down Your Credit

For top security, freeze your ­credit, advises ID-theft consultant Robert Siciliano. Opening new lines of credit will require your password. Visit each of the big three bureaus online to launch it. Costs—up to $30 to place a freeze and $12 to lift it—vary by state.

RELATED:

 

MONEY women

VOTE: Who Should Be the First Woman On a Modern Dollar Bill?

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iStock

Eleanor Roosevelt? Harriet Tubman? Beyoncé? Cast your vote in the poll below.

Is it time to put a woman on our paper currency? President Obama went on record today saying it’s a “pretty good idea.” During a speech in Kansas City, Obama said he received a letter from a young girl asking why there aren’t any women on American paper money. (Dollar coins with Susan B. Anthony and Sacagawea are still in circulation, but they are no longer being minted, and Martha Washington appeared on a paper note in the 19th century.)

Well, if Congress is taking suggestions… who do you think should get the honor? Take our poll:

 

Here are nominations from our readers — some silly, and some serious. (Some answers were lightly edited for length and clarity.)

Sojourner Truth

Loretta Lynn

“Loretta Lynn is Appalachian royalty – the last area of the continent that is truly American with its own unique culture that hasn’t been watered down and corrupted by political correctness, big city immorality, and liberalism. Loretta wrote and sang songs from the heart and did a lot to bring women’s rights to areas of the country that otherwise would not have gotten on board. Make this southern, West Virginian white boy proud. Ayn Rand, although a semi-good author, ain’t even American.”
– James

Rosa Parks

“She set the wheels of justice in motion.”
– Jebediah

A close call

Sarah Palin

“One would be hard pressed to find a better representative of a modern American: ignorant, short sighted, narrow-minded, with an unabashed persistent goal of increasing personal wealth.”
– David

Janet Yellen

“The first female Chair at the Fed, quite possibly one of the most powerful people on the planet.”
– Daniel

Susan B. Anthony

“They gave her that stupid dollar coin that never took off! They need to make it up to her! If a woman is willing to get thrown to the ground, arrested, and abused when fighting for women’s rights, she deserves to be on a bill.”
– Michelle

Hattie Caraway

“The first woman elected to the U.S. Senate.”
– Adena

Sandra Day O’Connor

“The first woman on the Supreme Court. She did a lot more for this nation than at least half, if not more, of the people on your list.”
– David

Oprah

Katharine Hepburn

“She was the greatest actress in U.S. history. She won four Academy Awards, and she always fight for civil rights.”
– Victor

Lady Gaga

“Lady Gaga is the Queen, and if you don’t put her on the dollar bill, it might as well be blank.”
– Derek

Marie Curie

Minnie Mouse

“She has brought more tourism and money into the United States than any other female figure! Much more than any politician!”
– Maria

C.J. Walker

“Her story is the epitome of the American Dream. Born of poor sharecroppers in Louisiana, she became the first self-made millionaire woman – a huge feat for any woman of that time, but for a black woman of that time in the South, it is an amazing story.”
– Michelle

Jane Scott

Jacqueline Kennedy Onassis

“Jackie helped create what is now the JFK Library, and she helped save Grand Central Terminal. During her time in the White House she completely restored it and did a TV special on all her hard work, for which she won an Emmy. And Jackie raised two amazing children, Caroline, who is now ambassador to Japan, and the late John F. Kennedy Jr.”
– Kaitlyn

Dolly Madison

“She risked her life to save important items from the White House when the British invaded Washington and burned the White House. She was a beloved figure in Washington, D.C.”
– Margaret

Madeleine Albright

Betsy Ross

“She created our flag, the symbol of our freedom.”
– Lynn

It’s a tie

 

Have another nomination? Tweet us at @Money with #WOMENonMONEY to tell us who you support, or tell us in the form below, and we might publish your response:

 

MONEY

Facebook’s Next Battle Is Wrestling Your Credit Card Number from Amazon

Facebook logo with game pieces on top of it
Berliner Verlag/Archiv—AP Images

Advertisers will pay big bucks to get in your Facebook newsfeed. But will you really buy their products?

And they said Facebook couldn’t sell ads. Ha!

In its quarterly earnings report on July 23, the social network posted a blockbuster figure: $2.68 billion from advertising in the second quarter alone, a 67% increase from last year. About 62% of that revenue came from mobile devices.

With numbers like that, Facebook has started breathing down Google’s neck. eMarketer expects Facebook will capture 18.4% of the mobile ad industry this year, with Google holding onto 40% market share.

Facebook is gaining ground in the battle over mobile ads. But the next battle could be on a completely different front, against a completely different player: Amazon. Facebook’s new “buy” button, announced on July 17, will let Facebook users order products simply by clicking a button on a Facebook ad. The feature requires that users give Facebook their credit or debit card information to complete the transaction without ever leaving the social network.

Of course, Facebook has tried e-commerce before. In the past, the social network has asked users to open their wallets for virtual games and gift cards. But as more eyeballs moved to mobile devices, those efforts flopped. Even though advertising revenue has skyrocketed since the company’s IPO, revenue from “payments and other fees” (read: Farmville) has stayed relatively flat.

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But here’s why the “buy” button is different. Facebook doesn’t plan to sell its own products. It plans to sell enhanced advertising. Facebook’s founders are adamant that the buy button is just a way to “streamline” the process of buying from other companies.

“Commerce is really important, and it’s a growing part of our business,” COO Sheryl Sandberg said during yesterday’s earnings call. “But I don’t think people should confuse that with Facebook selling things directly. The more people discover things from a newsfeed and go on to purchase, the more important we are in driving commerce. That doesn’t mean we’re going to, or have to, sell products.”

“Our main business is advertising,” CEO Mark Zuckerberg added. “To the extent that we do payments, it’s related to that.”

When it comes to the “main business,” Facebook has a clear competitive advantage: its 1.32 billion users worldwide. A good proportion of those people are total addicts. Zuckerberg says that on average, users spend 40 minutes a day on Facebook. Even people who claim to dislike Facebook won’t shut down their accounts.

“We believe hundreds of millions of users face switching costs that keep them from leaving Facebook,” Morningstar analyst Rick Summer wrote in a recent report. “People are unlikely to leave unless they can take their network of friends, content, and applications with them.”

Still, Facebook doesn’t have a good track record when it comes to protecting users’ privacy. One poll found that only 5% of people really trust Facebook with their personal information. Why give Facebook your credit card number and purchase history?

“With anything that Facebook does, there are always questions about how people’s privacy is going to be protected and what sort of data and information is shared,” says Debra Aho Williamson, principal analyst at eMarketer. “With e-commerce there’s a lot of potential for questions because people are exchanging their credit card information, their personal information, making Facebook aware of things they’re actually buying – that’s data Facebook can use for advertising or creating other products down the line.”

In a way, Facebook’s greatest asset – detailed information about your likes, dislikes, and all of your social connections – is also its greatest vulnerability. If Facebook could tell you which products your friends like, maybe you’ll be more likely to buy those products within the social network itself (with just two clicks!). Or maybe your friends will be totally freaked out that you know what they’re buying.

“It’s one thing for me to give Big Brother information about every purchase I make,” says Oded Netzer, associate professor at Columbia Business School. “It’s another thing when Big Brother wants to share it explicitly or implicitly with my friends.”

Meanwhile, Facebook’s competitors are also arming themselves for this next fight. Amazon and Twitter recently teamed up on an initiative that lets you add products to your Amazon cart by replying to certain tweets. And just last week Twitter announced that it planned to buy CardSpring, a company that helps developers incorporate payments systems into their apps.

One other piece of news could spell trouble for Facebook. While mobile ad revenue is way up, impressions are down 25%. That’s because users will only put up with so many ads when they’re scrolling through their newsfeeds on their phones – so Facebook has a relatively limited amount of space to sell. (On desktops, the right-hand rail provides more available ad space.) Over the long-term, Facebook plans to ramp up video ads, monetize Instagram, and test the “buy” button. But the question remains: If users primarily use Facebook to interact with their friends, how much e-commerce will they really tolerate?

“This whole idea of making money from social networks has not worked well,” Netzer says. “More and more companies are finding that people interact with each other not for the purpose of talking about products – they’re just interacting with each other. The products are interrupting this discussion.”

Facebook may be winning the advertising war. But if Facebook’s revenue has skyrocketed on the premise that social networks are the best place for businesses to reach new customers, then the “buy” button may finally put that theory to a test.

MONEY Tech

Here’s a Look at How Apple and Microsoft Really Stack Up

On Tuesday, both Apple and Microsoft released their quarterly earnings reports, with Apple showing a 12.3% profit jump—and Microsoft showing a 7.1% decline. How do they compete on other measures? Here's a look at how the two tech giants stack up.

MONEY Raises

Why You Might Get a Raise Soon

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iStock

Good news for workers: Employers think the future is bright

If you’re looking for a raise — or a job — some good fortune might be coming your way. In the second quarter of this year, more employers reported rising wages and expanding payrolls, according to a new survey from the National Association for Business Economics. And businesses expect the economy will keep growing. A quarter of survey respondents now predict that real GDP will go up more than 3% next year.

For its quarterly business conditions survey, the NABE polls its members, which include business leaders, consultants and economists in a range of industries. They say they’re feeling more confident about the state of the economy — and that’s good news for workers.

Ken Simonson, chief economist for the Associated General Contractors of America, says as sales have gone up, businesses have finally needed to hire more employees to keep up with demand. Plus, now that Congress has averted a series of fiscal crises, employers think the economy will continue to grow, so they’ve started making investments again.

That includes investments in labor: This quarter, 43% of NABE’s respondents said their firms offered raises. That’s up from this time last year, when only 19% of respondents saw higher pay. A third of the respondents expect their businesses will raise salaries going forward. Also, 36% of respondents said their firms hired more people this quarter, and 37% expect their businesses to increase payrolls over the next three months.

“Employment has been rising, the unemployment rate has been coming down pretty sharply, so there’s no longer that deep bench of experienced workers,” Simonson says. “Increasingly, companies are having to pay a premium in order to have the best workers, to get anybody who has gone off to a competitor.”

The bad news? Overall demand for workers is still pretty low. Only 22% of respondents said they have a shortage of skilled workers. Compare that to before the recession: In January 2006, 44% of respondents needed more skilled workers.

But while the labor market remains slack, Simonson thinks the trends are positive.

“We’ve been hearing for the past year about companies having trouble finding workers,” Simonson says. “I do expect that at some point this year, we’ll see an acceleration in wage increases.”

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