Social Games: How The Big Three Make Millions

So much for the first generation of big Facebook/MySpace social application startups. Slide and RockYou both got huge valuations in venture rounds. But a new generation of application developers has taken center stage and are racking up big revenues and their own eye popping valuations: Zynga, Playfish and Playdom.

All three own popular social games on Facebook and MySpace. Zynga’s Farmville has 61 million monthly users. Playfish’s Pet Society has 21 million monthly users on Facebook. And Playdom has 16+ million monthly users of Mobsters on MySpace and Facebook Combined.

All three companies are getting a ton of press and investor attention. Zynga wants to go public next year. Playfish probably already got bought by EA for $400 million or more. And Playdom probably raised an unannounced big chunk of venture capital over the summer.

These three companies may be generating as much as $300 million annually on sales of virtual goods. Need a shotgun to do that next job on Mobsters? No problem. Pay with a credit card, paypal, or your mobile phone and it’s all yours. And people are obviously very willing to buy these virtual goods. Nothing new there.

The goal of all of these games is to get to a higher level, and generally have more fun growing things or killing things faster than your friends. Get addicted to the free version, then start spending to move things along more quickly. Once people are committed, it’s easy to get them to pay. You can read all about it on Business Week.

Except Business Week didn’t mention the dark side of the business at all.

All three companies are willing to give game currency in exchange for offers. Sign up for Netflix. Buy a ringtone subscription. Or energy drinks. Sign up for a credit card. Get car insurance. Take an IQ survey that requires a $9.99/month mobile subscription to see the results. We even found one for arthritis medication. Here’s how it all looks. One executive we spoke with says that 70% of total revenue from these applications may come in from lead generation, not direct payments. Netflix alone will pay $30-$40 for a free trial (requires credit card).

Three companies control most of these lead generation offers: TrialPay (appears to have the most legitimate offers), Offerpal and SuperRewards.

There’s nothing wrong with basing a business off of lead generation, although some of the offers are pretty sketchy (long term credit card or mobile subscriptions for little or no value). And the FTC does tend to take a swipe at them periodically. But the bigger problem is that advertisers may not be getting much for their payouts. As the higher quality advertisers bail, pressure to add the scam artists increases.

The cycle of all of these games is pretty standard. Get new users playing for free, give them incentives to message all their friends to signup, hit them hard for cash or lead generation for revenue, and move them up the levels. Rinse. Repeat.

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Chrome Is Gaining Desktop Notifications

Things are really starting to get busy in the world of Chromium. Yesterday, we noted how the latest developer builds of Chrome were now Snow Leopard-ready. Today brings some other interesting news.

It looks like Chrome is about to gain a new built-in feature called Desktop Notifications. An overview document was recently placed in the Design Documents are of the Chromium Developers site. Basically, it sounds like there is an API that will allow a developer to pop up small messages on a user’s desktop area. I imagine this will look something like the FriendFeed notifications, but those are run through Adobe AIR, this would be run entirely in WebKit.

Interestingly, the documentation notes that for Mac OS users, there will be Growl integration with these notifications. It notes: “On Mac OS, desktop notifications in icon/title/text format will be routed to Growl for display if Growl is installed.” On Linux, the notifications would similarly be routed through DBus, apparently.

These notifications are to be turned off by default for now, but can be turned on using a command line switch. It’s hard to know exactly how these will be used from just reading about them in these documents, but this could be a potentially cool new feature sites can use — or pop-up ads 2.0.

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TwitterSense. It’s Coming.

At this very moment, at this very villa in the Israeli city of Hertzeliya Pituach, the final preparations are being made for what can be best described as ‘TwitterSense’—a way to automatically filter your Twitter stream so that the most relevant Tweets come out on top. The location in question is the home of my6sense, which currently offers a powerful way to filter news feeds. It is applying its filtering technology to Twitter and by the looks of it you’ll soon be able to follow as many Twitter users as you want and still never miss out on the most important tweets.

It took insistent prodding on my part to get my6sense to spill some of the beans and give me a sneak peak. The good news is that TwitterSense (my term, not theirs) is real and it works. The bad news is that it’ll take a couple of more months to be deployed. And yes, it could greatly improve the way we consume Twitter streams.

The advent of a TwitterSense offering could not be timelier as the onslaught of noise on Twitter has increased dramatically and its manageability has become a real pain point. Even Robert “The Stream Prince” Scoble has had to take dramatic measures, namely, slashing the number of users he follows on Twitter and befriends on Facebook. I, on the other hand, keep the number of people I follow on Twitter in the neighborhood of 150. This number works well for me, but I keep wondering whether I’m missing out on users who could provide insights relevant to my personal and professional interests. That is exactly where TwitterSense would come into play.

First, a quick recap on my6sense: The company has been building out what it calls ‘digital intuition,’ a content ranking technology that to date has been applied to RSS feeds to separate the signal from the noise. My6sense’s technology translates user actions such as Web navigation within and across various streams of content, and actions taken with various pieces of information in different contexts, into semantically-sensible implicit user feedback. The real beauty is that it requires zero intervention other than using the app itself. Here’s how I described my experience with the alpha release:

The “A-ha moment” took a couple of days of interacting with the product, but it came. Suddenly, very relevant info was floated to the top of the main “TOP MESSAGES” pane. By relevant, I mean posts I would absolutely have clicked on through my Reader, but would have had to sift through hundreds of posts before doing so.

A couple of weeks ago my6sense announced its new native iPhone app (iTunes link), which along with a few new features, presented a major user experience improvement over the original iPhone web app version. So far there is nothing seemingly compelling beyond our previous in-depth look into the company’s technology. But looks can be deceiving. Underneath the surface lies what could transform the way my6sense users consume Twitter.

TwitterSense in an extension of my6sense’s ranking technology and in this respect treats a user’s Twitter stream like an ordinary content source, much like an RSS feed. To begin with, my6sense has to differentiate between simple status updates/personal tweets and tweets which link to content. The differentiation is a must because its ranking algorithms require further optimization to be able to correctly float important simple/status tweets. In the short-term they have no plans to solve this particular challenge. Instead, the company is focusing on ranking tweets with links—and we all get quite a few of those. From my6sense’s perspective, your friends provide the first level of filtering. It then provides the second level by taking it upon itself to re-rank these Tweets so a users’ focus is directed to the information that is most important to them.

If you tend to click on links from specific friends on Twitter, those will get a boost in the rankings. But my6sense also looks at the underlying pages behind the links and figures out what topics those pages are about using its semantic engine. If those topics match your interests, as determined by your past reading and clicking behavior on the app, then those links rise to the top as well.

So the obvious question to ask is, why then if it rests upon my6sense’s existing technology isn’t it deployed already? First, there are challenges in ranking the content behind the link. A typical web page includes not only the post/article itself, but additional data and content as well. my6sense wants to make sure it ranks the intended content and this isn’t always trivial.

Second, there are scalability challenges. On average, a Twitter stream encompasses a greater mass of content than an average RSS feed. This means that my6sense has to go out and parse every piece of content behind every link in a user’s steam so it can analyze it based on the user’s ranking model. This requires extra processing power in order to avoid significant delays in ranking. My6sense did close a round of funding recently, but it can’t just throw money at the problem and solve it via brute force (i.e. just buy more machines).

I asked Barak Hachamov, the company’s founder and president, whether they’ll be offering TwitterSense integration for Twitter clients. His answer was that they do have such plans but it’s far too early to talk about them now.

My6sense plans to make TwitterSense publicly available in a couple of months or so. In the meantime, if you want to experience what it will behave like I suggest downloading my6sense’s native iPhone app to see how it works on RSS feeds. You won’t have to spend very long waiting to see the ranking magic since some backend improvements were made that get users to achieve the ‘A-ha moment’ I mentioned above much quicker, even within one or two brief sessions. There’s also a new digital intuition meter that provides users with feedback regarding the status of their preference model and indicates how strong their digital intuition is at that point in time.

We’ll be keeping a close tab on the upcoming release of this so called TwitterSense and reexamine it when it’s made publicly available in a couple of months.
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Google UK On Fire (Literally)

We’re not inclined to refute reports from a professional journalist on Twitter, so when Daily Telegraph reporter Jon Swaine says Google’s UK headquarters in London are currently on fire, we believe it’s true. Especially since the man has managed to provide some evidence by uploading a picture to photo-sharing service TwitPic.

Here’s a clear picture of fire on the roof of some building, supposedly housing Google UK’s offices on Buckingham Palace Road. Let’s hope no one gets hurt.

Update: The Telegraph writes the building was evacuated, thankfully no one got hurt and we’re told that the fire (now out) was the result of a tree catching flames during a rooftop terrace BBQ above one of the three floors Google occupies in the building.
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Hitachi Releases Most Powerful Hard Drive To Date - The 7200 RPM 2TB, Ultrastar A7K2000

on August 11, 2009, Hitachi announced the release of the latest addition to their family of Enterprise-Class Hard Drives, the new Ultrastar A7K2000.

It delivers enormous capacity, combined with 7200 RPM performance, reliability and enterprise-class mean-time-between-failure (MTBF) of a whopping 1.2 million hours.
The Ultrastar A7K2000 has been designed with the best interests of the environment too, offering highly competitive power efficiency. The Hitachi GST Ultrastar A7K2000 is the fourth generation, high capacity hard drive rolling off Hitachi's production lines, and is clearly in a class of its own with its 2 Terrabyte (2TB) storage capacity.
While the storage capacity has doubled from its predecessor, the A7K1000, its size has not increased. In fact, the A7K2000 has been outfitted with its massive 2TB storage capacity, without taking up any more space than the original 3.5 inch A7K1000drive. Same size, double the capacity.
The Ultrastar A7K2000 is reported to be the 'industry’s first enterprise-class, 7,200RPM 2TB hard disk drive' according to Todd Gresham, senior vice president, Networked Storage Solutions, Xyratex.
The Ultrastar A7K2000 can be integrated into existing storage systems with no hassle, due to the fact that the 3.5 inch encasing occupies the same size as its predecessor, while drawing less power. Couple that with Hitachi GST's five year warranty, and its reputation as a reliable, global storage partner among users
around the world, and the new drive may very well be a popular choice among users. The size and capacity make it ideal for use in data centers, and at an operating speed of 7200 RPM, the overall performance is better than drives operating at a
lower RPM - and it uses less power than these slower RPM drives.
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Apple MacBooks - New Design

Apple Inc. recently showed off their new family of MacBook Pro laptops, boasting longer battery lives and faster processors with lower prices.

Macbooks are now available in 13, 15 and 17 inch sizes. The baby of the family, 13-inch sells for $1199, the 15-inch for $1699, and the 17-inch for $2499.

Apple claims to have taken a fresh approach to building their products, and have introdued a new unibody design method. What this basically means is that they have taken design to a new level. Instead of having multiple parts that fit together making up the macbook, they hve taken a new approach to the design by replacing the many parts with one single part.

Apple engineers believe this new desgn method will further reduce failures, thereby extending the life and reliability of the macbook. And considering that customers are increasingly demanding easy to use, strong, mobile products Apple seems to have taken a step in the right direction with their new design.

The new unibody design consists of a single piece of carved alluminum that encloses the the macbook's critical parts, giving it a sturdy, strong but also light design. Each casing is milled from a solid block of aluminum using hi-tech CNC machines.

Every Macbook has the power saving NVIDIA GeForce 9400M integrated graphics processor. The 15 and 17 inch models give you the option for even more graphics power with the added NVIDIA GeForce 9600M GT processor. Depending on the level of graphics power you need, you can easily switch between the two.

The new MacBook Pro trackpad has also been installed and now has no button. The trackpad is in fact the button. Engineers believe this gives more room to track and click.
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What Is The Real Reason Dell Is Discontinuing 12-inch Netbooks?

Dell has retired their 12-inch Intel Atom-powered netbooks, they said today. The official reason - “It really boils down to this: for a lot of customers, 10-inch displays are the sweet spot for netbooks…Larger notebooks require a little more horsepower to be really useful.”

That makes absolutely no sense, since it requires no additional hardware horsepower to power a 12-inch netbook v. a 10-inch netbook. The only difference is power usage from the bigger screen. And the two extra inches more than makes up for the shorter battery life or slightly heavier device from packing in more batteries. It only costs a few more dollars to build a 12-inch v. a 10-inch netbook, and users get a bigger screen with the same performance.

In fact, Intel’s official position on 10-inch netbooks is almost exactly the opposite of Dell’s. Intel says “If you’ve ever used a Netbook and used a 10-inch screen size–it’s fine for an hour. It’s not something you’re going to use day in and day out.”

So why is Dell really discontinuing 12-inch netbooks?

Probably a couple of reasons. First, Intel doesn’t like 12-inch netbooks because they are deep into dual core territory, where Intel has much healthier profit margins. For casual users a 12-inch netbook with an Atom chip works just fine, and they are buying these devices instead of more expensive dual core machines. Intel has put pressure on OEMs to build netbooks that have 10 inch or smaller screens.

This includes direct pricing pressure - Intel prices Atom chips based on the size of the device screen. Anything over 10 inches is priced higher than devices with 10 inch or smaller screens. We think this is an inappropriate way to price Atom chips.

Dell may also be seeing customers who would otherwise buy a dual-core 13-inch or 14-inch Inspiron choosing the lower priced (and less profitable) 12 inch netbook instead. That’s something they aren’t going to be happy about.

Netbooks should be getting bigger, not smaller. That’s what users want.

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