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By JESSICA E. VASCELLARO and SPENCER E. ANTE

Facebook Inc.’s $1 billion acquisition of photo-sharing start-up Instagram has shifted the spotlight to the newest phenomena in mobile apps: uploading personal videos from smartphones.

A growing number of start-ups are providing easy ways to share videos taken from a smartphone, enabling people to add music and text and to share the results on Facebook or another social network.

As Instagram has done, these services are swiftly drawing millions of users, as well as big money from top venture capital firms, film stars and angel investors such as Laurene Powell Jobs, the widow of Apple Inc.

co-founder Steve Jobs.

Facebook’s $1 billion acquisition of photo-sharing start-up Instagram has shifted the spotlight to the newest phenomenon in mobile apps: uploading personal videos from smartphones. Spencer Ante sizes up the competition on digits.

But the fervor in mobile video-sharing apps could be undermined by what these services still don’t have—revenue and a concrete business model. Some of the start-ups, like Viddy Inc., have started charging for extra features like tools that add filters and effects to the videos, though the effort is nascent.

“The biggest issue in mobile is monetizing,” said Dino Decespedes, vice president of Mobli Media Inc., a mobile video app that has signed up more than the three million users since last September and snagged funding from actors Leonardo DiCaprio and Tobey Maguire. Mobile is “not a sexy place to put ads.”

Mobli is also experimenting with charging for certain features, such as overlaying a video with a Disney World-themed frame. But the company is still figuring out the business model.

That may not be an issue if Mobli can find instant riches instead the way Instagram did when Facebook agreed to acquire it last month. Instagram had no revenue but 35 million users after launching just 18 months earlier.

Such a deal is rare in Silicon Valley, however, and some investors question whether video services can reach the same level of ubiquity as photo-sharing, given people tend to share more photos than videos.

So far, the boom in video-sharing apps is being fueled by fast user growth at start-ups such as Viddy. About 26 million people have downloaded the Los Angeles company’s app since it was launched a year ago, and it is currently adding around a million users a day.

Viddy has recently been in talks about a new financing that would value the young start-up at more than $200 million, according to people familiar with the matter. A Viddy spokesman declined to comment.

Last week the app vied with San Francisco-based Socialcam Inc., which spun out of video website Justin.tv last year, for top app in the free section of Apple’s app store. Socialcam, which has pulled ahead in the rankings, has 36 million users since it went live about 14 months ago.

Socialcam CEO Michael Seibel said his company has been considering various business models. Among them: selling the ability for brands to push a video to the phones of everyone who enters a specific location, like Times Square, or sending everyone at a school a movie trailer around lunch time. Still, “less than 1% of our focus is on the business model,” he said.

Some entrepreneurs and investors backing these apps said the bandwidth-hogging nature of video, high wireless data costs from carriers and different mobile video habits suggest their engagement and growth may not be as viral as Instagram.

Videos take longer to produce and consume than pictures, for instance. It is unclear if the video apps will reach a point where they threaten a major player in the near term, much like Instagram frightened Facebook enough to compel it to make a gigantic offer.

Video “does not have that zero friction adoption” that photos have, said Bruce Dunlevie, a general partner at venture capital firm Benchmark Capital, which backed Instagram. “It is a bigger, more gnarly technical problem.”

Still, Benchmark placed a bet on mobile video by leading an $8 million investment into Klip Inc. in November. Mr. Dunlevie said he thinks the market can be valuable because videos can create more lasting memories.

Wireless carriers are paying attention to video-sharing apps too, as they seek to promote services that encourage users to sign up for pricey data plans for fourth-generation wireless networks.

Verizon Wireless announced a deal with Color Labs Inc. on May 7 to preinstall its free live-video sharing application into some Verizon phones that work on its fourth-generation wireless network. The partnership will give Color the opportunity to connect its app, which streams live video to its app and Facebook, to the computer chips in a phone, which could improve the quality of the videos.

But Color, which raised $41 million as a photography app last year, has struggled and said it only has more than one million users. After an unsuccessful launch last spring, the company changed course in December and instead focused the app on streaming bits of live video over a smartphone that could be shared on Facebook. Color co-founder and CEO Bill Nguyen said the new deal would yield apps that “leapfrog current technologies.”

The mobile video push comes amid renewed interest in online video in Silicon Valley. When Google Inc.

paid $1.65 billion to acquire YouTube in 2006, venture capitalists started salivating over online video. But many investors got burned as YouTube copycats quickly went out of business, beset by challenges such as making money from amateur content, policing inappropriate content, copyright issues and the ability of wireless networks to support video.

Earlier this year, Viddy was briefly kicked out of Apple’s app store after people posted adult content. A Viddy spokesman said the ban lasted 48 hours and the company worked with investors to implement “one of the most pro-active and effective content moderations systems of any application in the App store.”

But improvements in camera technology, networks and the proliferation of social media have attracted a new wave of investment and entrepreneurs. Napster co-founders Sean Parker and Shawn Fanning will in the coming weeks launch Airtime, a live-video chatting service, said people familiar with the matter. The site—which raised around $8 million last fall—will have a mobile experience as well, one of these people said.

Also, entrepreneurs said YouTube could be doing more on mobile. “The YouTube experience on the iPhone is pretty dreadful,” said Mobli’s Mr. Decespedes. “They have been slow to change.” Users can’t upload videos directly through the YouTube app but can using iPhone’s videocamera.

A YouTube spokesman said “developers bringing more video applications to the Web is good thing for consumers.” He added that the company partners with many app developers to allow them to upload videos to YouTube Apple, which develops the YouTube iPhone app, didn’t immediately have a comment.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com and Spencer E. Ante at spencer.ante@wsj.com

A version of this article appeared May 8, 2012, on page B4 in some U.S. editions of The Wall Street Journal, with the headline: Racing to Build the Instagram of Video.

By CHRIS DIETERICH, JACOB BUNGE and STEVEN RUSSOLILLO

Nasdaq has scored Facebook’s shares, according to people familiar with the matter, winning what has been seen as the most-coveted listing among a new guard of Web businesses. Steven Russolillo has details on The News Hub. Photo: Mike Segar/Reuters

Facebook Inc. is going to be ringing the Nasdaq Stock Market’s bell.

Nasdaq OMX Group Inc.

scored the planned stock-market listing of the social-media company, according to people familiar with the matter. The win gives Nasdaq one of the most-coveted deals among the new crop of Internet companies and a leg up in the race for technology IPOs.

Securing Facebook’s listing burnishes Nasdaq’s reputation in the high-tech arena. The exchange is home to firms such as Apple Inc.

and Google Inc.

Shares in Menlo Park, Calif.-based Facebook will trade under the symbol FB, previous filings said.

Nasdaq and NYSE Euronext‘s

New York Stock Exchange compete fiercely over listings, and last year the intensity accelerated amid the wave of Internet IPOs from the likes of LinkedIn Inc.

and Groupon Inc.

“This is a strong, substantial win for Nasdaq, and no doubt a momentum builder for future listings,” said Richard Repetto, an analyst at Sandler O’Neill & Partners.

Facebook’s offering, which could raise $10 billion, is set to be the biggest U.S. Internet IPO since Google’s in 2004. Facebook is preparing its IPO for May, according to people familiar with the matter.

Nasdaq had an edge from early on in the process, a person familiar with the matter said, and its IPO package was considered substantial and flexible. Deal promotion was a secondary concern for the company, this person said. Facebook is well-known enough that the deal was considered able to sell itself. More important was the group of companies Facebook would list alongside, like Apple, Google and Microsoft Corp.,

this person said.

“Winning Google further emboldened Nasdaq’s reputation as being the exchange of choice for the technology companies,” said Jay Frankl, senior managing director at FTI Consulting. “The Facebook listing I’ve seen as being similar to the Google listing, which had a similar competition between the exchanges, and a similar win for Nasdaq, and a tremendously successful IPO for both,” Mr. Frankl said.

NYSE made gains last year in technology listings, netting LinkedIn, Pandora Media Inc.

and Chinese social-networking site Renren Inc.

Analysts said winning Facebook would have helped swing the pendulum in the Big Board operator’s favor in terms of recruiting future listings and potential transfers.

NYSE and Nasdaq have long fought over Silicon Valley listings, though Nasdaq had a head start in the nation’s tech capital after opening a Silicon Valley office more than 20 years ago. In 2010, Nasdaq marked its 20th anniversary in Silicon Valley with a bell-ringing ceremony at San Jose City Hall with Nasdaq CEO Robert Greifeld. “We call Silicon Valley Nasdaq country,” Bruce Aust, a Nasdaq executive vice president who heads listings, said in an interview that year.

In recent months, Mr. Aust has been a frequent presence in Silicon Valley in a bid to win the listings of companies such as Facebook and Zynga Inc.,

at times flying out from New York almost monthly. Meanwhile, the NYSE has increased the size of its capital-markets team in Silicon Valley over the past few years. Both Nasdaq and NYSE frequently hold IPO “boot camps” for up-and-coming companies in Silicon Valley.

Last year was a big year for social-media IPOs, with companies from Angie’s List Inc.

to Zynga launching publicly. In 2012, the host of social-media flotations could include GlamMedia, Kayak Software and LivingSocial.

Companies pay annual fees to list their stock, and exchanges also garner listings-related income from the sale of market data and ancillary services offered to their listed companies. A company can pay as much as $500,000 annually for an NYSE listing fee, while all Nasdaq fees are capped at about $100,000.

When deciding on which exchange to list, companies often look at the costs as well as the promotional efforts that will help increase visibility. That includes events like the NYSE’s or Nasdaq’s bell-ringing ceremonies. Exchanges also offer other services for needs such as investor relations.

Last year, listings and issuer services brought in about $372 million for Nasdaq OMX, accounting for about 22% of the company’s revenue.

While the Facebook win will grab headlines for Nasdaq, the NYSE continues to lead in the number and value of company debuts.

This year, the NYSE has launched 24 corporate IPOs that together have raised $4.9 billion, according to Dealogic. The Nasdaq has been home to 16 offerings totaling $1.3 billion.

The NYSE led last year, as well, with deals raising $28 billion, while Nasdaq’s corporate IPOs brought in $9.3 billion.

The expected $10 billion that Facebook plans to raise in the IPO could value the social network at as much as $100 billion. Google’s 2004 offering raised $1.9 billion, giving the company a valuation of $23 billion.

Associated Press

Facebook CEO Mark Zuckerberg

Among U.S. companies, only Visa Inc.,

General Motors Co.

and AT&T Wireless have held offerings larger than $10 billion.

Reports of the Facebook listing boosted Nasdaq’s shares, which closed up 30 cents, or 1.2%, to $25.52 on Thursday. NYSE Euronext, meanwhile, fell 36 cents, or 1.3%, 28.31. Facebook’s decision regarding Nasdaq was earlier reported by CNBC and the New York Times.

—Pui-Wing Tam, Alexandra Scaggs and Kaitlyn Kiernan contributed to this article.

Write to Jacob Bunge at jacob.bunge@dowjones.com and Steven Russolillo at steven.russolillo@dowjones.com

A version of this article appeared April 6, 2012, on page C1 in some U.S. editions of The Wall Street Journal, with the headline: Facebook Tags the Nasdaq.

By ROBERT LEE HOTZ

Videogames can change a person’s brain and, as researchers are finding, often that change is for the better.

Love them or hate them, online videogames are a treasure trove for researchers who are studying how all those keyboard taps, mouse clicks and joystick moves may affect behavior, perception and even cognitive skills. WSJ’s Robert Lee Hotz reports.

A growing body of university research suggests that gaming improves creativity, decision-making and perception. The specific benefits are wide ranging, from improved hand-eye coordination in surgeons to vision changes that boost night driving ability.

People who played action-based video and computer games made decisions 25% faster than others without sacrificing accuracy, according to a study. Indeed, the most adept gamers can make choices and act on them up to six times a second—four times faster than most people, other researchers found. Moreover, practiced game players can pay attention to more than six things at once without getting confused, compared with the four that someone can normally keep in mind, said University of Rochester researchers. The studies were conducted independently of the companies that sell video and computer games.

Scientists also found that women—who make up about 42% of computer and videogame players—were better able to mentally manipulate 3D objects, a skill at which men are generally more adept. Most studies looked at adults rather than children.

Electronic gameplay has its downside. Brain scans show that violent videogames can alter brain function in healthy young men after just a week of play, depressing activity among regions associated with emotional control, researchers at Indiana University recently reported. Other studies have found an association between compulsive gaming and being overweight, introverted and prone to depression. The studies didn’t compare the benefits of gaming with such downsides.

The violent action games that often worry parents most had the strongest beneficial effect on the brain. “These are not the games you would think are mind-enhancing,” said cognitive neuroscientist Daphne Bavelier, who studies the effect of action games at Switzerland’s University of Geneva and the University of Rochester in New York.

Computer gaming has become a $25 billion-a year entertainment business behemoth since the first coin-operated commercial videogames hit the market 41 years ago. In 2010, gaming companies sold 257 million video and computer games, according to figures compiled by the industry’s trade group, the Entertainment Software Association.

For scientists, the industry unintentionally launched a mass experiment in the neurobiology of learning. Millions of people have immersed themselves in the interactive reward conditioning of electronic game play, from Tetris, Angry Birds, and Farmville, to shooter games and multiplayer, role-playing fantasies such as League of Legend, which has been played 1 billion times or so in the two years since it was introduced.

“Videogames change your brain,” said University of Wisconsin psychologist C. Shawn Green, who studies how electronic games affect abilities. So does learning to read, playing the piano, or navigating the streets of London, which have all been shown to change the brain’s physical structure. The powerful combination of concentration and rewarding surges of neurotransmitters like dopamine strengthen neural circuits in much the same the way that exercise builds muscles. But “games definitely hit the reward system in a way that not all activities do,” he said.

“There has been a lot of attention wasted in figuring out whether these things turn us into killing machines,” said computational analyst Joshua Lewis at the University of California in San Diego, who studied 2,000 computer game players. “Not enough attention has been paid to the unique and interesting features that videogames have outside of the violence.”

Broadly speaking, today’s average gamer is 34 years old and has been playing electronic games for 12 years, often up to 18 hours a week. By one analyst’s calculation, the 11 million or so registered users of the online role-playing fantasy World of Warcraft collectively have spent as much time playing the game since its introduction in 2004 as humanity spent evolving as a species—about 50 billion hours of game time, which adds up to about 5.9 million years.

With people playing so many hundreds, if not thousands, of different games, though, university researchers have been hard-pressed to pinpoint the lasting effects on cognition and behavior.

Blizzard Entertainment Inc. in Irvine, Calif., which sells World of Warcraft, StarCraft II and other popular games, did not respond to queries about whether the company supports gaming research or conducts its own studies. Neither did RiotGames Inc. in Santa Monica, which markets League of Legends.

The vast majority of the research did not directly compare gaming with hours of other intense, mental activities such as solving math equations. Almost any computer game appears to boost a child’s creativity, researchers at Michigan State University’s Children and Technology Project reported in November.

A three-year study of 491 middle school students found that the more children played computer games the higher their scores on a standardized test of creativity—regardless of race, gender, or the kind of game played. The researchers ranked students on a widely used measure called the Torrance Test of Creativity, which involves such tasks as drawing an “interesting and exciting” picture from a curved shape on a sheet of paper, giving the picture a title, and then writing a story about it. The results were ranked by seven researchers for originality, length, and complexity on a standardized three-point scale for each factor, along with detailed questionnaires.

In contrast, using cellphones, the Internet, or computers for other purposes had no effect on creativity, they said.

Several new studies shed new light on how videogames affect the brain and behavior — and it’s not necessarily for the worse. A new study suggests videogames boost creativity in children and offer other neural benefits. Lee Hotz has details on Lunch Break.

“Much to my surprise, it didn’t matter whether you were playing aggressive games or sport games, not a bit,” said psychologist Linda Jackson, who led the federally funded study of 491 boys and girls at 20 Michigan schools.

Even so, researchers have yet to create educational software as engaging as most action games. Without such intense involvement, neural circuits won’t change, they believe. “It happens that all the games that have the good learning effect happen to be violent. We don’t know whether the violence is important or not,” said Dr. Bavelier. “We hope not.”

Until recently, most researchers studied the effects of gaming on small groups of volunteers, who learned to play under laboratory conditions. Some scientists now are turning the commercial games themselves into laboratories of learning.

In the largest public study of electronic gaming so far, Mark Blair at Simon Fraser University in Vancouver, British Columbia, is analyzing the behavior of 150,000 people who play the popular online game called StarCraft II, pulling together more than 1.5 billion data points of perception, attention, movement and second-by-second decision-making.

By analyzing so much game play, he hopes to learn how people become experts in an online world. That may shed light on how new knowledge and experience can become second nature, integrated into the way we react to the world around us.

Write to Robert Lee Hotz at sciencejournal@wsj.com

Printed in The Wall Street Journal, page 9

A version of this article appeared Mar. 6, 2012, on page D1 in some U.S. editions of The Wall Street Journal, with the headline: When Gaming Is Good for You.