Balazs Kovacs

Virtual worlds may be in general decline, but every once in a while an interesting concept for one rolls around. Today the world is Woozworld, and believe it or not, it’s a tween-oriented title that advertises not only its ability to build social skills but basic economics and finance skills that younger audiences will need later on in life.

In actual play, Woozworld includes all the basic concepts of other virtual worlds, along with a more interesting approach in its primary currency mechanics. Giving young audiences a chance to work on their own, and be creative in their own right, the concept is sound. However, with a tremendous number of things one can do, the game hardly does a quality job of explaining “how” to do it.

After creating a free account directly through Facebook Connect, players jump into Woozworld right away with the creation of a “Woozen” avatar. Randomly placed somewhere in the world, players must learn to swim by being kicked in the river, for the game gives no direction whatsoever. For the record, yes, there is a help menu with dozens of topics that explains what everything is, but without a context to put it all in, this help blurs into a game of trial and error.

Thankfully, the game is not terribly complicated — not that most virtual worlds are — and players are typically able to speak with any of the Woozens walking about where they started off. Starting up a conversation is the most prudent step for two reasons: First, it’s probably the best way to figure out what’s going on (if not, the only other option is to follow some vague, goal-oriented achievements), and second, popularity is rather useful.

One of the major goals for users in Woozworld is to create both the best looking Woozen and “Unitz” (a personal virtual space). Every day, users can vote on the avatars and virtual spaces that they like best. At the end of the week, these are tallied and the winner receives a respectable chunk of game currency. Of course, this is more of a personal accomplishment than a reliable means of income.

Fact of the matter is, that in order to win such votes a good stream of revenue is needed to buy all the virtual items necessary. There are a couple of game-like ways to earn money in Woozworld, that are pretty basic, dubbed “Jobz” and “Infestations!”, which involve random objects popping up throughout the world that are removed with a click to get a bit of the in-game currency, “Beex.” Jobz pop up a single object, while an Infestation is when multitudes of them appear in any given area.

It’s also worth noting that the occasional job may require a very basic mini-game, such as clicking a frog repeatedly in order to burp it. More coin can be earned through finishing achievements and voting. But these methods aside, the real earner is being the salesman.

This is where finances come into play, as users can set up shops called Shop Podz in their virtual spaces. These can be stocked with virtual items from décor to clothing (there are even mannequins one can buy and use), with the idea being to search the world for items others might want — buy low, sell high. Sometimes users will be able to find exclusive or rare items, find specials, order from catalogs, and so on. The process is actually pretty simple; it’s the finding of products that’s a challenge but also part of the fun.

Oh yes, advertisement is necessary too. After all, how can one make sales if no one knows the store exists? Advertisements come in the form of a neat little feature called “Events.” Once a user has a Unitz, they can create events that range from group games, to parties, to sales, and any other user can search for them. These become venues for earning votes and popularity, boosting revenue, or just meeting new people. Granted, events are user generated, so not all will be good, but it’s a pretty cool option that enables younger audiences to be both creative and entrepreneurial. Believe it or not, there’s a decent number of these events going on at any given time.

In the end, these are only the major highlights of Woozworld, and there are dozens of other features within the virtual world. Most are fairly minor, like the “Spellz” that cast special effects on other users, or can even turn players into a temporary vendor, but all add their own little bonuses to game play. At its core, Woozworld is like any other virtual world in the sense that it gives the players some toys and says “go,” and that’s part of the problem.

There is no real direction to Woozworld, and the game often leaves the user wondering what they should do next. The game does do a decent job of promoting the need for social interaction,and turns the play into something that teaches basic life-skills. Free-to-play (though users can subscribe for added benefits), and with the ability to log in with just Facebook, Woozworld feels like a safe, interesting, and somewhat educational title for tween audiences.

Originally launched as Red Televisiva Megavisión in 1990, Mega is a popular TV channel in Chile, specifically in the capital city of Santiago where it airs, with a mix of news, reality, and sitcoms like a remake of Married%hellip; with Children (the Bundys are replaced by the Larraíns). In October, Mega introduced a new logo, reportedly designed by local agency Hambre, who were also in charge of the recent Chilean government identity. (They don't have a website I know of, so it's hard to corroborate 100%).

A few random on-air bumpers.

The old logo looked like it belonged in a 1980s 32-inch television that needed a garage to accommodate its rear. Something too techie/primitive about it that just doesn't look too appealing. The new one is fairly trendy — much like the old one was when it was first used probably — with a bold, rounded sans serif with stuff in it. The "stuff" is standard issue colorful triangles without much rhyme or reason and perhaps there doesn't need to be rhyme or reason, just something that looks good on TV. As the bumpers above show, it does look good on TV. The logo isn't too spectacular but it doesn't deserve the major hatred it's been getting from its Chilean audience — browswing through Facebook and YouTube, the comments towards it are quite unflattering. Sure, it could be better, but it could also be worse. Like the old logo.

Thanks to Pablo for the tip.

A couple weeks ago, my pals at Twitter were kind enough to invite me in to visit with their (rapidly growing) team. The topic was meetings, so I used it as an opportunity to publicly premiere a talk I've been presenting to private clients over the past few months.

I hope you'll enjoy, Broken Meetings (and how you'll fix them).

Slides:

Supplementary links and commentary forthcoming, but I wanted to go ahead and post the talk as quickly as the video was available. Special thanks to Michelle, Jeremy, and the crackerjack Twitter crew for a swell afternoon.

I really like this talk and sincerely hope you will find it useful in helping to un-break your own meetings.

The advent of the iPad has triggered a new round of innovation in the startup community. And few startups have utilized the iPad's touchscreen UI to create a unique user experience more than Flipboard, a magazine reading application built specifically for the iPad.

As part of our continuing product innovation interview series, I spoke with Flipboard co-founder and CEO Mike McCue. We discuss how he came up with the idea, before the iPad had even been announced, then rapidly developed and launched Flipboard. We also talk about how people are using Flipboard (hint: it's more than just for reading magazines) and its future plans to expand beyond the iPad - including to smartphones.

Sponsor

In 1999 Mike McCue co-founded voice services company TellMe, which was eventually acquired by Microsoft in March 2007. He worked at Microsoft for a little over 2 years, leaving in June 2009. As he will explain below, McCue then started a thought experiment which led to an iPad magazine app called Flipboard. It wasn't until January 2010 that Flipboard became a company, but it has evolved quickly since then.

Richard MacManus: How was the product conceived and what was the inspiration for it?

Mike McCue: When I left Tell Me at Microsoft, I wasn't sure what I was going to do next. But I did know one thing - that I really like building products and thinking about product design and so on. So I knew that I would start prototyping ideas and things like that. I started looking around for somebody who I could work with, to just start prototyping things. And Evan Doll, one of the early engineers on the iPhone team at Apple, was someone that I got the chance to meet.

When we got together, we decided to do a thought experiment: imagine if the Web was washed away in a hurricane and we needed to build a new one from scratch. What would it look like? How would it be different? What would the user interface be? Would there still be the notion of a browser? If you build a totally new Web, knowing everything we know today and where the technology is and where it's likely to be heading, what would you do differently?

RM: When was this?

MM: This was in late August of 2009.

So we just started meeting and talking about that. Also writing to a bunch of other folks who I've worked with in the past and brainstorming it. We started coming up with some ideas that ultimately led to Flipboard.

There were a couple of core principles. One was that Social Media was absolutely fundamental to where the web was headed, we felt. And also, the beauty and timeless graphic design principles of print. We wanted to create something that was much more visually beautiful than what we've seen with web pages.

RM: Was the product specifically conceived for the iPad, or were you thinking more generally in terms of tablets - or even mobile phones?

MM: The idea evolved. When we started off, we were thinking in terms of the web broadly. And we were thinking we might develop downloadable apps for the PC, for the Mac or perhaps an HTML 5 based website. But then the idea evolved further.

When I traveled, I would buy magazines before I got on an airplane. I love magazines, I read them all the time. As I was reading them, I'd ask myself: "Why is it that the Web isn't as beautiful as these magazines? What could we do to make the web a more beautiful place?" And of course, along with that line of thinking, I was saying to myself: "If this [Apple] tablet that is rumored ever happens, it would be the perfect form factor for doing exactly that - for making websites as beautiful as magazines."

The date that I started realizing we needed to go more towards the magazine approach, in terms of the aesthetics and design, was in the September-October time frame.

As we talked more about it, we decided that the best way to start would be on this theoretical product that Apple was rumored to be doing. And then when Apple actually announced it [in January 2010], it was obviously very exciting for us. We realized that it was as we had hoped - that it would be the platform that could allow us to re-visualize the web in a way that maps more to print. So it would be the perfect place for us to start. And then, as we came to that realization, we married that up with social media. And we realized what we're really doing here is creating a social magazine. We first started calling it a social magazine in January.

RM: before the iPad was launched, did you have access to the device so that you could build something on it?

MM: No. We wish. [chuckle] The day that the iPad was announced, the SDK showed up. And we downloaded the SDK and started coding Flipboard on that day.

The iPad was shipped on April 3rd. So we got the iPad and started running our code on it for the first time. Not on a simulator, but actually on the iPad. The real serious coding, where we were actually running on a real iPad, started on April 3rd. A decent amount of time prior to that was spent running in the simulator.

Flipboard launched in July of this year.

Next Page: Flipboard's plans to expand beyond the iPad, plus Mike McCue reveals the usage patterns so far.

Beyond The iPad: Expanding to Other Platforms

RM: Flipboard at the moment is obviously very focused on the iPad. Are you targeting other tablet devices or even other mobile devices?

MM: Not at this point in time, but it's only a matter of time before we do other devices. The iPad had such a tremendous start and it's such an incredible platform, there's a lot more we can do on that platform with the product. Rather than diffusing our resources across a bunch of different platforms, we're focused on making the application on the iPad better. So that's our current focus.

RM: When you do expand to other devices, will you be tdoing smartphones? Or would that require a different type of application and you'd have to rethink that...

MM: Yes, it would be a different type of product. But we do think there is an opportunity to do something on the iPhone, for example. That's relatively straightforward to do, because the coding that's required to do that isn't a huge difference from what we're doing [on iPad]. The big thing is the design. With a smaller screen, from a design point-of-view how would the product look and feel?

With the phone, you're going to have that in your pocket all the time and you have a camera - so you'll tend to use a bit more [for] content creation than you do with the iPad. So there are a lot of design decisions that we would need to make, in order to have a version that would run on a smartphone or the iPhone. It would be a different version of what we are doing now.

Usage Patterns

RM: Since the launch of the product, what kind of usage patterns have you noticed with people using the product? And have any of those surprised you?

MM: There's a tremendous amount of repeat usage on any given day, by a large percentage of the installed base. So it's being utilized at a level [of activity] that is higher than what we anticipated.

It's a very active user base, pretty engaged and really involved in the Twitter [ecosystem].

RM: When I spoke to Jim Spencer of Newsy, he told me that they'd noticed that a lot of their usage was in the weekends - which kind of surprised them. Have you noticed anything similar in terms of when people are using Flipboard?

MM: Yes, definitely similar. A lot of it is of course because we're on the iPad, because that's when [many] people use the iPad. It's when you have time to sit back and relax and look at great content. And so I think we're seeing similar scenarios with weekend usage.

At the same time, there's a social networking aspect to Flipboard - something a lot of people do pervasively throughout the entire day [during the week]. And so we're seeing a lot of that, too.

We're also seeing iPad usage during the evening, in reading time. People use it in bed, before they go to sleep.

RM: One thing I'm curious about is your promotion of Flipboard as a social magazine. Are users doing more personalization at this point in time, than using the social features? The reason I ask is that my own usage of Flipboard has been mostly to customize the magazine and what information I want, and then consuming it. I haven't really used the Twitter features and other social features, so I'm wondering if that's the general usage pattern - or are people using the Twitter, Facebook and other social functionality a lot?

MM: We have about 70% of our users connected up to Facebook or Twitter, or both. And about 30% just use it to plug feeds into Flipboard and read those feeds. So, there are definitely two different types of users. There's the more social networking-oriented user and there's the RSS news reader type of user.

With Flipboard, it's hard to categorize it. It's not really a Twitter client or a Facebook client. And it's not an RSS Reader either. Flipboard is really unique, in that it is built on social infrastructure. We use Twitter almost as social RSS. So it's a very different type of product than has been out there before.

Over time, you'll see us add more capabilities in terms of allowing people to discover content more readily on their social networks. We'll allow them to view that content in more interesting and beautiful ways. And we'll also let them share that, across all of their social network, in more and more interesting ways.

When you take a step back, Flipboard's all about allowing people to discover, browse and share content across their social network.

RM: Thanks Mike! Readers, let us know in the comments if you've used Flipboard and your impressions so far of this "social magazine" for iPad.

One of the most popular pages on this blog is App Store Rejection Reasons. Since Apple refused to tell us what the “real” rules for the App Store approval process were, I shared my experiences in the hope that other developers could avoid making the same mistakes. The page ends with call to Apple to release all the hidden rules. Today Apple finally listened.

Here are finally the App Store Review Guidelines. The language of the guidelines is surprisingly informal; definitely not a product of Apple’s legal department. This makes it all the more believable that this is the actual internal checklist that reviewers use.

Daring Fireball has a nice collection of extracts from the guidelines that are funny, frank or puzzling.

I hope that Apple will start referring to these guidelines in their rejection emails, instead of the more diffuse paragraphs of the Developer Program License Agreement. This would also force them to add to the list as soon as apps are rejected and there’s no matching guideline to point to.

Apple also instituted an App Review Board where you appeal any app rejections. Obviously this is not an independent third party board, so don’t set your hopes too high. But instituting a formal review board is a great move by Apple. Hopefully the result will be less randomness in the approvals and rejections.

In another good move today, Apple also updated the iOS Developer Program License Agreement. Many of the egregious paragraphs that were added this spring with the apparent intent to stifle competition, have been removed. Bravo!

Now let’s hope that the HIG rules will still keep most of the bad Flash apps at bay…

Post from iPhone Development Blog Copyright © 2009 Nick Dalton - iPhone Developer

More Transparency from Apple – Finally!

Last month at F8, Facebook launched an updated version of their Platform Developer site that includes some changes to its documentation and tools.

This transition coincides with the movement away from Facebook’s older REST API to their new Graph API. Among the changes were a new Showcase page, a more rich Platform Live Status page, and most importantly new Platform Documentation. The Platform Documentation is currently being migrated away from the old Wiki style content to new static documentation as Facebook looks to deprecate the Wiki. To aide in the transition, Facebook has opened a documentation category in Bugzilla to collect all documentation-related “bugs” (omissions, errors, etc.) in one place.

Shortly after the update, many developers started noticing the absence of the Developer Tools in the new site. A bug was opened in Bugzilla to address the issue, and has since been resolved. Whereas the old Developer Tools resided on a central page, the new tools are spread through the documentation in the appropriate places. For example, the FQL Test Console is now located on the fql.query REST API page. Similar Test Consoles can be found for various old REST APIs. Note, the new Graph API does not have a Test Console as all data can be accessed via any web browser.

Facebook and game creator Zynga, recently valued at $4 billion, have signed a five-year “strategic partnership” to maintain the symbiotic relationship between the social network and games like FarmVille, Mafia Wars and Treasure Island.

Facebook Credits, Facebook’s virtual currency system, will be an important part of the partnership between the two companies and its use will be expanded within Zynga games in the future. The announcement issued by the two companies doesn’t say exactly how, though.

Further incorporation of Facebook Credits solidifies Zynga’s commitment to the Facebook Platform because players wouldn’t likely be able to transfer those credits should Zynga go off on its own.

In the days preceding this announcement, some bloggers speculated that Zynga’s departure from Facebook was a sincere possibility. The concern was that Facebook’s decision to deploy Facebook Credits (from which it takes a 30% cut of all revenues) and remove or lessen the number of notifications in users’ newsfeeds from games could inspire Zynga to seek an alternative platform.

GamesBeat noted that Zynga started using in-game features to fetch players’ e-mail addresses — a potential sign that the company was making sure it would be able to stay in touch with its customers outside of Facebook should the relationship go south. And let’s not forget that Zynga revealed plans to launch FarmVille for iPhone and other mobile devices.

Maybe bloggers were reading too much into the situation, or maybe Zynga was doing all of that to secure a better bargaining position with Facebook. Either way, everything seems fine and dandy for the virtual farming and mafia warring communities on Facebook for now.

Tags: café world, facebook, facebook credits, facebook platform, farmville, games, Mafia Wars, microtransactions, online games, social gaming, social networking, treasure island, Zynga

[Editor's note: We've been covering how social game developers are being affected by Facebook's ongoing changes to its communication channels and monetization. While some developers say the changes are hurting them, Germany-based wooga is doing well, as cofounder and chief executive officer Jens Begemann explains below. As he tells us, he has an insider's view of the social gaming industry, but from outside of Silicon Valley.]

Over the past few weeks tension between Facebook and game developers has increased. With rumors of a tense relationship between Zynga and Facebook, complaints about removed “viral” channels and the introduction of Facebook Credits, it seems Facebook has become unattractive for game developers.

I don’t share this view.

Instead, I see Facebook taking bold steps to make quality more important. I strongly believe that these changes – disruptive as they might be for the incumbent players – will help strengthen Facebook as a gaming platform and benefit the companies that produce the best games and customer experience – not the ones best at exploiting Facebooks messaging opportunities.

How big is the problem?

Looking at AppData, it seems that there is a paradigm shift happening right now. Out of the top 25 games only 8 were released since November 2009 (when Facebook started tightening up policies) and all except one are from the top 5 developers, who have big pockets for marketing spend and millions of users to cross-link (the exception being our game Bubble Island).

This is very different from like a year ago when new games entered the MAU leader-boards much quicker. It is quite natural that as the industry matures the barriers of entry become higher, but the changes by Facebook have accelerated this shift.

Virality – still there but much harder than before

It is much more difficult to grow a game now than it was a year ago.

Not only is the space way more crowded with many more high quality games for users to pick from, but Facebook has taken countless small steps limiting almost all viral channels. Most recently Invitations were given decreased visibility now appearing lower on the homepage.

Today it is very hard to launch a new game without spending more than $100,000 to “seed” it and attract a critical mass of users, unless the game is of exceptional quality and you can cross link from existing apps. Bubble Island, for example, launched in February and we cross-linked from our first title Brain Buddies. This brought the first users, but since then the game has grown organically to 1 million DAU (less than 3% of users came via paid marketing).

The demise of the app-to-user notifications

For many developers, notifications were one of the main channels to get players back to the game. By being very aggressive and pushing the limits towards a “spam” approach, some rumors say that during the third quarter of 2009, more than 75% of all notifications on Facebook were “app to user” notifications.

Since their removal on March 1st all of the incumbent top 5 developers have seen big drops in MAU and DAU. There have been many loud complaints about this removal and this is allegedly one of the things that are “killing” the Facebook gaming platform.

Our experience is very different. If a user stops playing a game simply because he/she (probably a she – we have 70% female players) does not receive daily reminders the game is simply not good enough to keep that particular user coming back to the game. Bubble Island never used notifications and has maintained a healthy 15-20% “sticky factor” (DAU/MAU ratio) since launch.

It is also fair to assume that the users that were lost after notifications were removed had very low monetization value and lower than normal virality. So one could argue that the actual impact of the removed notifications is and adjustment of artificially inflated DAU/MAU numbers.

Engagement

Earlier developers could rely on unlimited, free and fairly effective methods to get users to return to their games on a daily basis. Today, these possibilities have been limited and there has been an increased focus from Facebook to reward “positive interactions” from the user such as becoming a fan (or a “liker”) of the game, bookmarking the game etc.

Again – this seems to be a move that is clearly aimed at rewarding high quality games with a high intrinsic engagement factor, not an artificial engagement based on relentless communication.

The games dashboard would be great if…

The Games Dashboard was supposed to replace and improve on Notifications and other channels that have been limited or removed over the past months. On paper it looked like a great tool for both discovery of new games (virality) and users returning to old games (engagement). So far the Games Dashboard has been a letdown, but we hope Facebook will take the opportunity and turn it into a driver of Facebook as a gaming platform:

1) Give it a permanent box on the homepage showing the user’s 5 most recent games
2) Give it a permanent place in the top bar navigation. (Example: Home | Games | Profile | Account)
3) Fix loading times! It often takes 10-15 seconds for the dashboard to load and quite often it does not load at all.

Enter Facebook Credits

Besides Facebook taking steps to reduce spam by limiting the virality and engagement channels across the platform, its Credits virtual currency is the other product making a big splash on the social gaming scene. With a 30% revenue share going to Facebook and plenty of rumors that Facebook will force developers using it, the concept has become a big issue for many developers.

We recently started our monetization efforts on Bubble Island and Monster World. We are exclusively using Facebook Credits (FBC) at the moment and so far the results have been quite good. We have every reason to believe that it will continue to improve and that the conversion will ultimately more than offsets Facebooks 30% share.

The reason is that Facebook Credits will make it easy for users to start spending more money on more (different) games. Once a user has once completed a Credits purchase the payment information is stored by Facebook so a returning user has an extremely streamlined and high-converting flow where two clicks is all it takes to complete a transaction – it is a great customer experience for micro- transactions!

Conclusion

In spite of all the recent noise and complaints we are very confident in Facebook’s future as a social gaming platform. With the introduction of Facebook Credits and hopefully some changes to the games dashboard, hungry developers who focus on doing polished and engaging Facebook games will have plenty of opportunities to get a strong presence on Facebook.

Jens Begemann is cofounder and CEO of wooga. He was previously an executive at mobile entertainment company Jamba (Jamster).

We’ve been talking about designing blank slates for a long time. In fact, here’s a post from September 2003 about blank slates that pre-dates Basecamp (the web-based application being developed/discussed in that post was, in fact, Basecamp).

What’s a blank slate?

The blank slate is a screen you see when a data-rich app has no data. For example, if you’re using a tool to manage your projects, but you don’t have any projects in the system yet, you’d be looking at a blank slate. It’s important that the application designer consider this state carefully — you don’t want people staring at an empty screen. A blank slate should help someone get started.

Basecamp’s blank slates have been through many iterations. Here are some screenshots from March 2004 (just about a month after Basecamp launched).

Blank slates, redesigned

A few weeks ago we decided to redesign the blank slates inside each Basecamp project. Each section in Basecamp (messages, to-dos, milestones, time tracking, etc.) has a blank slate. The blank slate lets you 1. know there are no messages, to-dos, milestones, etc. in a project, and 2. gives you an option to get started by adding the first one.

This is what the Milestones blank slate looked like before we rolled out the update last week:

I think this design served us well, but it’s also pretty loud. In fact, it doesn’t look blank, it looks full which can be a little confusing. There are quite a few elements on the screen including:

• The shadowed page
• A “Milestones” header with today’s date
• A yellow bar saying “Create the first milestone for this project” along with a brief list of features/benefits below the headline.
• A second headline that says “Learn more about milestones…” with another line below that.
• A big image with a “Click me to start the video” button.
• An “Add a new milestone” button at the top of the sidebar.
• A link to “Add ten at a time” below the button.
• A “subscribe to iCalendar” link with a paragraph of text below (also containing four more links).

Nine links, lots of images, a main section, a sidebar, multiple headlines, a pile of different colors, numerous font sizes/treatments, etc. That’s a lot going on. There’s a lot to consider and absorb just to get started. All these elements make milestones feel hard. That’s not the message we want to send.

What we really want to do here is quickly let someone know 1. what milestones are, and 2. how to add their first milestone. There’s a better way to do this than to hit them over the head with a lot of visuals, headlines, descriptions, and links.

So we started with a sketch.

More...

The relationship between Facebook and the largest social gaming company on its platform, Zynga, has fallen to an all-time low, or so industry sources are telling us.

Zynga had an all-hands meeting last Thursday, where chief executive Mark Pincus told his hundreds of employees that the company might leave Facebook’s developer platform. Instead, it might launch its own social gaming service, called Zynga Live or (ZLive), as TechCrunch then VentureBeat reported.

One big reason may be money. Zynga has built a business worth hundreds of millions of dollars, largely monetizing through virtual goods that it sells in its games. Facebook now wants to take a 30% cut of this money directly out of Zynga’s pocket by forcing use of its Credits virtual currency — although Zynga could eventually reap benefits from this arrangement.

However, everyone we’ve spoken has described the issues between the two companies as being about more than just Credits. Some also say that the conflict is representative of larger issues on the platform. We’ve gathered more details, but here’s context first.

Industry Turmoil

Facebook is starting to make all of its developers use its Credits virtual currency. All other things being equal, this means Facebook will get revenue that developers have been getting up until this point. However, Facebook says that everyone can benefit through Credits.

We covered the issues in more detail in our Inside Facebook Gold membership service, last week. To recap, if Facebook’s various efforts to improve Credits work — like more payment purchase options, better user access within its core interface, liquidity due to broader usage, etc — then developers could see drastic increases in the number of paying users and the amount they pay, and thereby make more money.

The problem is that nobody knows how Credits will actually work.

Meanwhile,  Zynga has already built its own payments system, and it typically pays a much lower portion of its revenue to service provider partners, including Paypal, Offerpal, and others. No matter how well Credits eventually work, Zynga is likely to bear a big part of the cost in the meantime.

It has 243 million non deduplicated monthly active users and 60 million daily active users, by far the most out of any developer on the platform, according to our independent AppData measurement service. It is likely going to make hundreds of millions of dollars in revenue this year.

Zynga may also feel misled about Credits, and other platform changes. Like many developers, the company built its business on Facebook over the past several years with the understanding that it would be able to retain all of the revenue, based on statements made by Facebook when the social network launched its developer platform in 2007. Zynga also planned its games around specific parts of the user interface, like notifications and requests.

Beyond making Credits mandatory, Facebook removed third party access to notifications at the beginning of March and it is planning to mostly remove requests, as soon as this month. Organic growth is next to nothing now, according to many developers. Most of the biggest games are losing users, according to what our data shows.

Zynga has had one big hit this year, Treasure Isle. The title has grown through advertising and cross-promotion within its other games, as far as we’ve been able to tell. Facebook wants developers to reach its users through its news feeds, the email addresses that apps can request directly from users, or through the counters that appear in the game and app dashboards on the home page.

None of these channels are currently helping social games reach and engage with users.

Most users read their feeds in the algorithmic “Top News” view, which shows users only 50 items per day; given all of the status updates, photos, shared links from the web and whatever else they see — and the preference the algorithm gives these other types of stories — games don’t have much room to get noticed. Email has all the problems that it does in real life, such as messages ending up unread or in the spam folder. The dashboards and counters, meanwhile, just aren’t getting significant engagement, even though Facebook wants them to.

Of course, the reason that Facebook took away communication channels like notifications and requests is that many  developers (Zynga included) relentlessly messaged users through them, to the point that the channels became choked with communication that seemed more like spam. So, between Credits and the communication changes, Facebook has reduced the value that Zynga and other developers can get out of the platform — at least for the present. These are all things that any serious developer on the platform already knows painfully well.

While the current changes are severe, it is important to understand that Facebook has made changes throughout the history of the platform that have seemed just as severe at the time they happened, like when it removed app profile boxes from users’ personal profile pages, or made the news feed a raw stream of real-time updates… or changed it back to be algorithmic. For more on this sometimes-painful evolution, see our article from 2008: Facebook’s platform: rebuilding the plane in midflight.

Basically, some companies have suffered as each change has rolled out, yet the social app industry itself has grown along with Facebook.

The Issues Today

With every change over the years, some developers have said Facebook is doing a bait and switch, encouraging them to build for one set of rules then changing the rules on them in ways that hurts their businesses. Yet at every turn, it has also been clear that some developers have acted in bad faith, forcing Facebook to take action against them in ways that affect the whole ecosystem. How one views Facebook’s changes now or before depends on where one’s interests lie. Usually, developers get upset but deal with the changes.

But no developer has ever moved off Facebook’s platform, especially not one as big as Zynga. What’s the reason it might, now?

Zynga has also already established something of a presence off of Facebook; millions of people are playing FarmVille on the web site since it launched months ago, and it has been slowly expanding web versions for other games, like Mafia Wars.

But those games all have relied exclusively on Facebook’s platform, from user’s identities to communication channels. A break with Facebook would mean these aspects of its sites would be completely cut off.

Instead of Facebook’s social graph and communication channels, Zynga would apparently try to create its own. It has gathered users’ email addresses, as Facebook has encouraged developers to do. And it has been busy testing out text messaging in at least one of its big apps, Mafia Wars, so it has some phone numbers. These are two communication channels it can use beyond Facebook. And considering that there are relatively fewer other communications channels left on the service, these alternatives look more appealing than before.

ZLive would also have the immediate short-term benefit of not requiring Zynga to pay the Credits tax; although if Credits ends up working as Facebook intends, Zynga would miss out on any of the benefits.

The bigger issue is that the two companies seem to have a personal problem with each other. Zynga has had far more platform violations than any other developer on the platform, according to sources in the industry. The company is well known within the developer community to be very aggressive with everything: messaging users, monetizing, etc. We have long heard complaints about its business practices from other developers, and those issues appear to have come to a head with Facebook itself.

But how much worse is Zynga? It has so many big, full-featured games that the numeric volume of issues will naturally be higher. We also hear that it has been getting in less trouble than most other companies in recent months.

We have, meanwhile, also heard that Facebook is using strong-arm tactics to control developers, although sources have not been able to provide meaningful details about the tactics themselves.

The TechCrunch article suggests one way strong-arming might be happening:

To make matters worse, say sources, Facebook is trying to get Zynga to agree to a long term deal where Zynga remains primarily on the Facebook platform. During negotiations Facebook has taken some steps to punish Zynga, such as shutting off notifications for Farmville and other games, and Facebook has threatened, say multiple sources, to simply shut some of Zynga’s games down permanently.

This example is unlikely, as notifications were shut off for all developers at the beginning of March. But, as the platform owner, Facebook potentially has other tools at its disposal.

Facebook does regularly tweak some ways that apps reach users, such as friend invites — it has been doing this since the platform launched. We’ve heard reports from developers over the years that Facebook play favorites with features like invites. On the other hand, from our understanding, it does try to be fair, and generally we haven’t heard complaints from developers on this front in quite a while.

Whether fair or not, the problem here is that Facebook offers no transparency into how it handles negotiations with individual developers; perhaps the company turned down the number of friends that Zynga players could invite to their games, for example, but it’s not clear that it was due to negotiations versus other completely legitimate policy enforcement measures.

Because there’s no more specific information about what Zynga has done wrong, or how Facebook has handled negotiations with it and other developers, it would be a mistake to pass judgment on either company’s behavior just yet.

Conclusion: Is Zynga Bluffing?

If Zynga tries to leave Facebook, it will be embarking on a risky experiment — no social game developer has even tried to do anything similar on the scale that Zynga might. After all, the whole point of “social” in social games is that you build games that use the social graph and communication channels of a host social network. It could try to use other social graphs as identity providers and as communication channels, like those from MySpace, Twitter or even Google — but no competitors offer meaningful competition to Facebook at this point. Zynga just withdrew from Tagged, another social network it’s been on, as TechCrunch also spotted, in an early draft of a company note to users about moving to ZLive.

So it seems Zynga is trying to centralize all of its resources on ZLive, and trying to own the entire relationship with its users rather than relying on Facebook or any other identity service to help it reach users. This basically makes Zynga a casual game company. While it may have a lot of money, a big team, and users, it is essentially going up against big casual gaming companies that have already established themselves on the web. It will be playing on their turf. This seems like a big challenge, but  Zynga has actually gotten good at building games, as many of its competitors have come to grudgingly admit in the last year or so.

There are also serious questions for Facebook about how users will be impacted if all of Zynga’s games were to suddenly disappear from the platform. What about the users who have each spent hundreds of hours, if not hundreds of dollars, building up their farms, their mafias, their virtual aquariums, and the other core components of Zynga games?

Certainly, Zynga has had issues over the years, but it has also made products that millions of people love. Facebook itself could likely see traffic and engagement fall, at least in the short term, if Zynga’s games disappear. Lots of other developers are hungry to grow, and we expect they’d happily try to take Zynga’s Facebook user base. But are they able to create and operate as many high-quality games at the scale Zynga has already achieved?

A related point here is that because Facebook has curtailed developer-to-user communication — it’s not clear how competitors will reach the users they need to in order to fill the void. We don’t know how many Zynga game players overlap with rivals; millions have likely only played Zynga games, and don’t know about the others. Techniques like cross-promotion within other games may not work that well here.

Zynga is also paying Facebook millions of dollars for performance advertising every month. Rivals buy ad space to reach developers, but most lack Zynga’s budget. It’s possible that Zynga’s departure would reduce the cost of ads, helping rivals find users, and hurting Facebook’s revenue. But many non-game advertisers have moved on to the system, other developers may not be able to gain much of an edge here.

ZLive ultimately sounds like it could end up worse for Zynga than for Facebook, but a split is a gamble for both companies.

The more damaging part for Facebook here is if it is publicly seen as acting unfairly towards Zynga, in a way that undermines other developers’ interest in the platform. If most developers thinks they can’t create a business on Facebook without having the rules changed or unfairly enforced on them, then they might also leave.

That doesn’t just apply to social app developers, it applies to web publishers busy integrating its new social plugins around the web. Platform developers are generally hooked on being able to access Facebook’s traffic — many describe it as an “addiction” — and the plugins are now helping other sites get that same addiction. Mainstream media companies have already been reporting significant traffic from Facebook. In other words, the plugin users are making Facebook a more important part of their businesses.

But if companies on the rest of the web think that Facebook will treat them poorly, they might not add its features in order to avoid the same headaches Zynga is going through. Facebook is also dealing with fallout over how it has handled a user privacy around the plugins and a variety of other launches; critics say it has tricked users into revealing sensitive personal information, as we’ve just covered in detail over on Inside Facebook.

Zynga and Facebook are in a good position to hurt each other. As with mutually assured destruction in other realms of human conflict, we think they’ll look at the costs and benefits, and work out their differences — although probably in a way that serves Facebook more, given the company’s better leverage.

Much has been made of Facebook’s success in bringing millions of new users into the gaming industry. But how many of those new players are willing to go deeper than, say, FarmVille? Is it possible for forward-minded developers on Facebook to literally train a new generation of hardcore gamers?

A panel at last week’s Social Gaming Summit covered this issue, featuring Andrew Busey of Challenge Games, Susan Wu of Ohai, Andrew Sheppard from Watercooler and Jim Greer of Kongregate. All of them have attempted to create more in-depth social gaming experiences, with varying levels of success.

The answer: Yes, social gamers can become hardcore gamers, and they may even want to — even if they don’t know it. The problem is that the hardcore gaming market is naturally limited to a smaller number of people, those with time and a natural gaming inclination. There are already a few million of these people on Facebook, but individual developers can find it difficult to attract enough.

But the training toward hardcore gaming is coming not from indie developers with a big idea, but from the more shallow social games that started the whole trend. “These games are training gamers in hardcore activities like harvesting over and over,” said Wu. “How do you combine art with the kind of behavior your average social gamer is performing today? To me that’s the future of all gaming.”

Ohai’s first game is City of Eternals, which during the panel Wu said was drawing in the same largely female group that Facebook tapped. The problem is changing the way they look at the activity. “I think there’s a cognitive barrier. They don’t see themselves as gamers, they just think they’re socializing with friends,” she said.

But most City of Eternals players do end up migrating from Facebook to the game’s web site, which often turns five minute sessions into 30 minutes, as well as increasing the likelihood of interactions with strangers and group activities, something all the panelists pointed to.

At the end of the day, Facebook probably won’t be the destination site for more intensive gaming, because of the social network’s intended experience. “When you go to Facebook, you log in and there are 60 friend requests, then you want to look at pictures of your niece — it’s kind of schizophrenic,” said Sheppard.

But once social gamers have been lured over to more in-depth experiences, they logically also tend to spend more money, too. Greer said that Kongregate has games with mechanics that are actively hostile to the players, which means fewer people get involved — but that the average revenue per user (ARPU) was huge, with people routinely spending over $100. Busey’s game Warstorm also monetizes several times better than the average social game, he said.

One challenge for the future will be making the graphical experience better. “The problem is the coming religious war between Apple and Adobe,” said Busey, which will hinder developers from effectively using Flash. Unlike the video market, HTML5 is no replacement for web gaming.

When Unity3D came up, most of the panelists expressed admiration for the development tool, which can put a high-end graphical experience on the browser. None seemed convinced that Unity would gain traction, though. “You’ll see social elements moving into console games faster than the opposite, is my guess,” said Greer.

Using Posterous to Dispatch Content

This content from: Duct Tape Marketing

By now you’ve likely heard of the online content publishing tool posterous. If not, it’s billed as the dead simple place to post anything – just email us.

Anyone can set up a posterous site and add just about any form of content by simply sending an email to your account. If you want to create a blog, you can get started in about 2 minutes. Families and groups can create a site and start adding all manner of information and pictures without any technical know how at all. You can make your posterous site private if you like, get fancy with professional looking themes and create custom domains. The tool can easily act, as it does for growing numbers, (Here’s Steve Rubel’s Stream built entirely on posterous) as an online business hub.

The feature that I don’t think gets enough attention though is the tool’s ability to easily auto post content of all sorts to many of the social networking platforms you may use as part of your online presence. Note: I’m not suggesting you spray every bit of content automatically to every piece of online real estate. I am suggesting you look at posterous as your dispatch center for placing content from one source.

Here’s how you can do this.

Posterous allows you to tell it where you want your content posted when you send your email. If you’ve enabled your social media sites such as Flickr, Facebook and Twitter (there are more than 30), you can publish to posterous and tell it to send the video to Facebook as well. Or you can add a picture and have it automatically added to Flickr and Facebook.

To publish content to posterous you send an email to posterous@posterous.com. To add services you just add to the email as such – flickr+facebook+posterous@posterous.com. Or you can simply send it to one service by sending the content to twitter@posterous.com.

Of course there’s a posterous iPhone app that posts picture and videos directly from the camera as well – PicPosterous

For many people, particularly those that rely on email as their primary communication and storage tool, this is a great way to create and curate content.

Two Facebook Page Apps for Doing Business

This content from: Duct Tape Marketing

Facebook pages are pretty hot right now as businesses strive to take advantage of the growing audience and influence that is Facebook. As with any gold rush, there are those that seek the gold and those that equip the miners. Today I would like to share a handful of tools, or apps, designed to make business use of Facebook easier and more profitable.

1) Storefront Social - The Storefront app makes it pretty darn simple to put a storefront of products on your Facebook pages. Storefront is not an ecommerce platform, it’s simply allows you to transfer product from a store you already have to your Facebook pages. The process is relatively painless. You can add products individually or import a CSV file or your Google Base listings. (Google Base is another place you should be listing your products by the way.)

Here’s an example of a very large General Store. As you can see other social features such as retweeting and sharing are added to each product, products can be grouped by category and, in this case, hundreds of products can be listed in the store. Since the products retain your original shopping cart links this could be a nice option for eBay and etsy sellers as well.

Storefront Social charges a monthly fee based on the number of products listed in your store. Starter programs that allow you to upload 36 items go for $4.95/mo and range up to 3000 items for $19.95. The ease of store set-up, particularly for someone with a large store and ability to export store listings, makes the potential exposure inside the Facebook walls well worth the monthly fee.

2) The second Facebook application I would like to showcase today is called Facebook Fanpage Engine. This tool allows you to easily create custom fan pages using pre-designed templates and the static FBML Facebook application.

Everything done by the template can be accomplished by someone that knows a bit of HTML or wants to use an HTML editor, like Dreamweaver, but for ease of use it’s tough to beat these templates and editor. Packages run from $37 all the way to $497 if you want customer header design help. If you’ve got your own custom graphics, or know how to create the precise sized graphics for the templates, you can get the entire package of templates for $67. Templates include various column and block layouts including templates for video and opt-in forms from services like Constant Contact and AWeber.

If you’re providing Facebook consulting or design services for clients you can use the templates over and over again for any pages you administer or are working on for clients once you purchase the license. I recommend this tool because it’s easy to use and a great time saver that allows you to create a custom branded feel for your Facebook pages.

Bonus: Facebook Marketing: An Hour a Day – Mari Smith and Chris Treadaway show you step by step how to use Facebook as a Marketing tool in this just released new book.

A potential new customer saw a coupon code at our site and asked us for an additional discount on Highrise.

Initial draft of a response:

I’m sorry, but we don’t offer any discounts or special pricing beyond what is published on our website. If you’d like to signup for a new paid account today, you’ll have the 30 day free trial, but we can’t offer any additional discounts on subsequent months. Sorry about this.

Seemed negative so went back to the drawing board:

We’d love to have you as a customer. I think you and the business will be very happy with Highrise. When you signup for a trial account, you automatically get 30 days free time before you’ll be charged. On top of that, if you use 37HRWEL as the coupon code, you’ll get 20% off the first month. That’s the best offer we have available right now.

I hope you guys will come on board. Have a great day.

Says about the same thing without the sorrys and nos. 1st way: sorry, don’t, can’t, sorry. 2nd way: love, very happy, free time, on top, best offer, hope, great day. Tone makes all the difference in the world. Which way would you rather buy from?

Price is what you pay. Value is what you get.

—Warren Buffet by way of Benjamin Graham

As part of Facebook’s announcement around its new Open Graph yesterday, it says it is changing how user data access permissions work for third-party applications and web sites. It’s getting rid of the multiple dialog boxes that developers have had to implement in the past. Now there will be just one box, and developers will need to ask for the specific types of data they want to access, rather than asking for users to share all of their profile data.

Governmental and non-governmental privacy organizations around the world have pushed Facebook to make data-sharing a more granular process, and this interface change is a step in that direction. In the sample screenshot below, you can see the “Cool Social App” asking for access to public information, email and photos.

The new format otherwise includes all existing data that developers could previously request from users — the change here is in how users share data with developers, not what they share. This includes name, profile picture, gender, access to the stream, friend information and email addresses.

The change reduces the number of windows and clicks a user needs to do, which should make the permissions dialog easier for people to use.

Otherwise, the system will work as before. Developers can ask for the same range of extended permissions, including access to granular profile data like birthdays. And as before, developers can only get basic profile information about users’ friends unless they request additional permissions.

The new interface uses the OAuth 2.0 protocol for sharing data to authenticate that users are who they say they are, and to allow the authorization.

This morning, you may have noticed when you logged in to Facebook that it asked you to update all your likes & interests and add them to ‘pages’. Facebook is unrolling their steps to create the semantic web this morning, and that starts by creating ‘pages’ for everyone’s lists of interests and hobbies. This ties people’s interests to real information and allows people to connect with other people that like their interests in an easier way. If you haven’t seen it yet, Facebook will be unrolling it soon in your area.

You can see how this works in the image below. I’ve had CCR listed on my favorite music section for years, and when I used to click on it it would present me with a list of pages related to the artist. This was completed by automatically doing a Facebook search for “CCR” when I clicked on the link. Now, when I click on CCR, I get this page:

We can see that the new page attempts to consolidate the information about CCR into a page, which includes a list of people that “like” the page.  This is really great because it makes the ‘like’ idea the same no matter where you are.  Whether you head to cnn.com and click “like” on an article, or say you “like” CCR in your interests, your basic function as a Facebooker is to have a series of “likes” around the web.  It’s the basic currency of connection between users and media on the web.  It’s a simplified starting point for the ’semantic web’, and I imagine we’ll see more developments as time passes.

In the meantime, enjoy connecting with people easier on Facebook.  It’s really simple now to head over the CCR page, for instance, post a message, and know that it can be seen by everyone on Facebook that likes CCR. Think of it as a meetingplace for any given interest.  That’s a very powerful idea. The site also includes the Wikipedia page, and indicates that the page will soon be open for editing by Facebook users, like a wiki page, with the goal of making it a complete description as edited by the Facebook community.

You’d think Facebook cofounder and CEO Mark Zuckerberg would have abandoned coding long ago. But if his recent status update is to be believed, he’s still at it. “Mark Zuckerberg Just checked in some code and unit tests for f8,” he said via a status update. When asked what the code was, he responded “You’ll have to wait for f8 to find out.”

I wonder when Bill Gates last wrote code for shipping products, and if that was 5+ years after Microsoft launched. Would be interesting to know.

I doubt I will ever own one of this highly amusing “Inbox Zero” Nerd Merit Badges.