Twitter Has iPhone Users’ Address Books, Too

After a developer discovered that the Path social-networking app was silently uploading iPhone users’ address books to its servers, a whole lot of other shoes — that is, other apps doing similar things — started to drop.

Here’s one of the biggest shoes to tumble so far: Twitter has disclosed that when iPhone users visits the friend-finding feature in the Twitter app for iOS, the device’s address book is uploaded to Twitter and stored for 18 months.

Twitter says that it’s going to tweak the language it uses in the app to make clear what’s going on. It also lets you delete your address book from its servers if you so choose.

Meanwhile, The Verge’s Dieter Bohn has an excellent guide to the address-book-uploading mess, including details on what various apps are doing and advice on what they should be doing.

There’s no evidence that any of the companies involved have been doing anything nefarious, such as selling the data; the issue’s that they’ve been too blithe about taking and storing confidential information without clearly explaining what’s going on. Some of them have also been violating Apple’s rules, which state that apps must disclose what they’re doing.

It seems obvious that the proper way to deal with all this is for iOS to lock down you address book and let you grant access to apps on a case-by-case basis, as it does with other sensitive info such as your location. It’s not clear why Apple didn’t do this in the first place, but it now says that it will. Soon, I hope.

MORE: Twitter Eclipses 12,000 Tweets Per Second During Super Bowl

Article source: http://techland.time.com/2012/02/15/twitter-has-iphone-users-address-books-too/

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‘Vikileaks’ Twitter account reveals embarrassing details of Vic Toews’ private …

A Twitter account that reveals purported details of Safety Minister Vic Toews’ messy divorce has popped up online.

The tweets are a blatant jab at the politician, who, along with the Conservative government, tabled a bill in Parliament on Tuesday that would give authorities greater access to citizens’ personal data online and beef up surveillance measures.

The Opposition, as well as Canada’s privacy commissioner, have slammed bill C-30, calling it an unnecessary invasion of privacy.

Related

• Online surveillance bill ‘a gold mine’ for hackers: Ontario privacy commissioner

• Full Comment: Vic Toews draws line on lawful access: You’re with us, or the child pornographers

• Online surveillance bill critics are siding with ‘child pornographers’: Vic Toews

“Vic wants to know about you,” reads the description for Twitter account @Vikileaks30. “Let’s get to know about Vic.”

By Wednesday afternoon, the account had 1,790 followers — a number that was growing rapidly.

The tweets have apparently been gleaned from an affidavit from Mr. Toews’ wife. They divorced in 2008.

The divorce came after Mr. Toews, once called the “minister of family values,” fathered a child with another, much younger woman. The posts on Twitter haven’t been independently verified.

“I believe that Vic is now living common-law with the baby’s mother, his former mistress.”

— Vikileaks (@vikileaks30) February 15, 2012

“In late 2006, I discovered that the woman with whom I was having an affair was pregnant with my child.” #c30

— Vikileaks (@vikileaks30) February 15, 2012

“In February 2010, I discovered that Vic had changed the locks without my knowledge or consent.” #c30

— Vikileaks (@vikileaks30) February 15, 2012

Another tweet claims the affair was with the couple’s former babysitter and others attest Mr. Toews stopped paying his wife support.

“In February 2010 Vic closed the joint account into which the support was being deposited,” the tweet reads. “When I asked him to send the money to another account, he ignored me.”

It’s not clear who’s running the Twitter account. Messages sent to the account holder by the National Post have so far gone unanswered.

Mr. Toews’ office didn’t know about the feed before being contacted by Postmedia News Wednesday afternoon. Through a spokesman, Mr. Toews wouldn’t respond to any of the tweets about his personal life.

But eventually, he tweeted his own response:

I won’t get involved in this kind of gutter politics. Engaging in or responding to this kind of discussion leads nowhere.

— Vic Toews (@ToewsVic) February 15, 2012

MP Justin Trudeau also sprang to Toews’ defense, posting his own message on Twitter:

I want to express my support for @ToewsVic. The invasion of his privacy that @vikileaks30 represents is reprehensible. #LPCdefendsPrivacy

Mr. Toews sparked outrage on Monday by claiming in Parliament opponents of the legislation were siding with “child pornographers” by not supporting the planned laws.

The claim, which caused outrage among opposition MPs, came after Liberal public safety critic Francis Scarpaleggia asked Mr. Toews in the House of Commons how Canadians were supposed to trust the government wouldn’t use the private information they obtained online to intimidate citizens.

“We are proposing measures to bring our laws into the 21st century and to provide the police with the lawful tools that they need,” Mr. Toews said to the MP for Lac-Saint-Louis, Que. “He can either stand with us or with the child pornographers.”

National Post, with files from Postmedia News

Article source: http://news.nationalpost.com/2012/02/15/vikileaks-twitter-account-reveals-embarrassing-details-of-vic-toews-private-life/

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‘RIP Chris Brown’ Trending On Twitter: Did Chris Brown Kill His Career With A …

“RIP Chris Brown” is currently trending worldwide on Twitter, but make no mistake: the 22-year-old RB singer is still very much alive.

Brown may have effectively shot himself in the foot when he decided to lash out at those who weren’t pleased that he won a Grammy Award and was invited to perform at the show. That virtual bullet wound seems to have killed him — at least on Twitter.

Responding to tweets from celebrities like Miranda Lambert, Jack Osbourne and actor Wil Wheaton, Brown threw a tantrum on Twitter and then deleted the evidence.

“Strange how we pick and choose who to hate. Let me ask u this,” he began. “Our society is full of rappers (which I listen to) who have sold drugs (poisoning), …. But yet we glorify them and imitate everything they do. Then right before the worlds eyes a man shows how he can make a Big mistake and learn from it, but still has to deal with day to day hatred! You guys love to hate!!! But guess what???” HATE ALL U WANT BECUZ I GOT A GRAMMY. Now! That’s the ultimate FUCK OFF.”

Brown or his handlers quickly deleted the tweets, which have turned into a public relations nightmare. Currently, there are only 10 tweets left on his entire account and this morning he wrote, “Be HAPPY.”

Even though the Recording Academy decided to honor Brown with Best RB Album, Twitter users have made it loud and clear they don’t want to forgive him for assaulting ex-girlfriend Rihanna in 2009.

“RIP Chris Brown is absolutely hilarious to me!!! I died for 10 minutes. Maybe he should stop hitting girls and Twitter wouldn’t kill him lol,” wrote one user. While another asked: “Does the ‘RIP’ in the trending ‘RIP Chris Brown’ stand for ‘recklessly injure people’?”

The public’s outrage isn’t just because he left Rihanna black and blue and bleeding — that shock has somehow faded with time. It’s the fact that Brown hasn’t seemed to learn his lesson.

Brown pled guilty to the assault charges and served no jail time. Instead he was sentenced to five years’ probation, 52 weeks of domestic violence counseling and 1,400 hours of labor-based community service — but it’s his assault on the public, with his outbursts and brazen disrespect, that exudes the impression that he hasn’t changed.

Brown may acknowledge that he made a “big mistake,” but he hasn’t learned from it. His violent temperament was more than evident in March 2011, when an interview with “Good Morning America” took a disturbing turn. When asked about the assault, Brown became irate and went into a rage off-stage, shattering a window with a chair and storming out of ABC’s studio shirtless.

Brown continues to prove he’s an immature and impulsive person — perhaps dangerously impulsive, at times. Many will argue it’s sad that Brown’s career didn’t die when he beat up Rihanna, but he might have killed himself by shoving it in the public’s face.

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Article source: http://www.huffingtonpost.com/stephanie-marcus/rip-chris-brown-trending-on-twitter-chris-brown-kill-career_b_1279427.html

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Facebook’s IPO motives: domination of the web

One of the tech world’s most persistent rumours made solid, Facebook’s official filing of its forthcoming initial public offering generated the predictable torrent of scrutiny and discussion. But much of that discussion centred around the IPO’s oddness. Though going public is something of a rite of passage for a company of Facebook’s size, it isn’t easy to pin down why it’s choosing this moment to do so.c
It’s true that, through its many private offerings, the company had acquired nearly enough investors to legally require it to make public much of the information in the IPO filing. But there are complications to being a public company; the trade-off is the ability to raise money. And Facebook doesn’t ostensibly need the capital. It has $3.5 billion on hand, has been cash flow positive for some time now, and hasn’t struggled to raise money privately. So why now?

The answers lie in Facebook’s long-term ambitions. But unlike many companies that might use new capital to nudge up market share, Zuckerberg co. have grander goals. More than introducing new products or marketing strategies, Facebook wants to cement its position as the social backbone of the web—and entrench itself as more cultural phenomenon than corporation.

There’s an urgency, thanks to the pressure of Google’s newly social ambitions. Though it’s unclear whether the Google+ social network will catch on as a direct competitor to Facebook, a core goal for the search giant is clearly for a Google-owned social identity to follow users around from site to site. It’s that sort of “social passport”—full of the kind of detailed, personalized information that marketers dream of—that is the true battleground. Facebook needs to go public now because it has entered a race with Google to provide your default online identity.

There’s a long way to go, of course, and the IPO is only one step. As The Atlantic’s Alexis Madrigal and others have pointed out, a key figure in the filing was Facebook’s low revenue-per-user (currently $5.02). In order for its proposed $100-billion valuation to make sense, it needs to make far more on each user.

On one level, that simply means more—and, Facebook hopes, more-effective—advertising. What’s also likely is some form of integrated shopping that leverages the social graph (the map of online connections between us) to create another revenue stream. But those efforts dovetail with the company’s need to turn much of our day-to-day online activity—reading the news, shopping, sharing and communicating—into something one “naturally” does via Facebook.

It’s a goal they’ve been pursuing for years. From the integration of media services like Netflix or “reading apps” from the likes of The Guardian, to the Like button that aggregates all of a user’s online activity in one place, everything the social network has done over the past few years has suggested that it wants to be the go-to entry point of the Internet. If Amazon is the web’s version of a shopping mall, and Google the library, then Facebook’s aim is both simpler and more far-reaching: to become most Internet users’ online home.

But to become that culturally significant, you have to go beyond consumption—and Mark Zuckerberg knows it. In fact, in the letter that accompanied the filing, he wrote that he aims to “change how people relate to their governments and social institutions.” In addition to becoming the social backbone of the consumer web, Facebook is also hoping to become the place people go online to express political citizenship. It’s a bold vision. Whether or not it’s possible, of course, is a different question.

Social networks rise and fall with an almost alarming rapidity, and in a medium as new as the web, it’s hard to make long-term forecasts. Nonetheless, Facebook’s reach and omnipresence are, historically speaking, unparalleled. And if the goal is for Facebook to become not just a company but a cultural norm, then going public was just the sensible next step.

Navneet Alang is a Toronto-based blogger and technology critic.

Article source: http://www.canadianbusiness.com/article/71192--facebook-s-ipo-motives-domination-of-the-web

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Facebook accused of helping Sarkozy’s online makeover

Article source: http://www.france24.com/en/20120215-facebook-accused-helping-sarkozy-online-makeover-france-election-socialists-ump

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‘Slingo’ game comes to Facebook

(CNN) — “Slingo,” a leader in online games for 17 years, is making its way to Facebook with a redesigned version of the popular bingo/slot-machine game.

The game’s creators are partnering with Zynga, maker of such popular social games as “Farmville,” “Cityville” and “Words With Friends,” to produce Zynga Slingo. Its gameplay is similar to the original “Slingo,” with some updated social features to make it interactive on Facebook.

“Our partnership with Zynga will bring the ‘Slingo’ brand to a whole new audience in a fresh, new way,” said Rich Roberts, CEO of Slingo. “We are excited to partner with the world’s leading social game developer to deliver the social experience ‘Slingo’ fans across the world have asked for.”

“Slingo” is played by more than 55 million people through online, mobile and casino games. The concept is rather simple — players use a slot machine to produce numbers, which then are used on a bingo-style board for prizes.

The Zynga Slingo version allows for playing with your Facebook friends in a variety of ways. Friends can gift others with power-ups or even act as a Joker during gameplay, allowing for a free movement. Leader boards also track in real time to see who is doing well and who could use a little help.

” ‘Slingo’ is one of the earliest and most cherished games of the Internet,” said Rich Sawel, product manager for Zynga Slingo. “And we’re proud to bring it to our players and make it even more fun and social than ever before.”

The new game comes on the heels of the release of Zynga’s 2011 financial report showing the company earned $1.14 billion but still ended up with a net loss of more than $400 million. The fourth-quarter report shows the company’s games were played by 54 million users daily, an increase from 48 million during the same time in 2010.

Zynga launched 12 new games in 2011 — four titles on Web-based platforms and eight others on mobile platforms. The company also had the top five most-played games on Facebook.

According to the report, Zynga’s net loss of $435 million in the fourth quarter included a $510 million stock-based compensation expense that was previously unrecognized until triggered by an initial public offering in mid-December.

As of early Wednesday, Zynga stock was trading at $14.35 per share on Nasdaq.

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Article source: http://www.cnn.com/2012/02/15/tech/gaming-gadgets/zynga-slingo-facebook/

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Twitter uploads contact list without consent; retains data for 18 months

I worked briefly with Microsoft UK in 2006 but no longer have any connection with the company. Regardless, I remain impartial and unbiased in my views.

I don’t hold any stock or shares, investments or industrial secrets in any company, but have signed confidentiality agreements with a number of UK and U.S. organisations, whose names I am not at liberty to disclose.

I was involved with Kent Union, the University of Kent’s student union, undertaking voluntary, non-salaried, elected positions between early 2009 and mid-2010.

No other company, body, government department, non-governmental organisation or third sector organisation employs me or pays me a salary in any capacity whatsoever.

As a freelance journalist, whenever expenses are given and taken by a company that is not CBS Interactive, these will be disclosed in each relevant post to ensure transparency.

I currently work with a UK law enforcement unit, but this is an entirely separate position which bears no connection to other work.

(Updated: 23rd October 2011)

Article source: http://www.zdnet.com/blog/btl/twitter-uploads-contact-list-without-consent-retains-data-for-18-months/69480

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Twitter Co-Founder Biz Stone to Keynote HIMSS

 

HIMSS 2011 – Orlando

This week is the last lap before HiMSS12 – or the Healthcare Information and Management Systems Society’s Annual Conference Exhibition in Las Vegas. I missed last year (Orlando), but I was in Atlanta for 2010 – and I’ve been to a few of these through the years. It’s a week long Healthcare IT extravaganza (2/20 – 2/24) and there will be over 300 Educational Sessions, about 35,000 attendees and an Exhibit Hall with roughly 1,000 vendors. Given the sheer size and scope of the event – the full agenda is always published well in advance – and this year was no different. What was different this year was the lead keynote speaker. Normally that spot is reserved for the Secretary of Health Human Services (the Honorable Kathleen Sebilius last year), or maybe a former Secretary of Labor like Robert Reich (also last year) – or maybe an actor or celebrity on behalf of a disease-specific charity or cause. So naturally I was surprised to see this years keynote speaker for the official opening on Tuesday – Biz Stone – the Co-Founder of Twitter.

For those who don’t know some of Twitter’s amazing history, Biz Co-Founded the global service along with Evan Williams and Jack Dorsey in March of 2006.  The service itself went live in July of 2006 which means that it’s been online for less than 2,100 days. This last fall – Twitter landed an equity investment of $800 million – giving it an estimated market cap of about $8 billion. To frame that just a little, Best Buy’s Market Cap is about $9 billion – and Sears Holding is just over $5 billion. Investing and market caps aside, Twitter’s influence with 140 characters (known as tweets) has been nothing short of meteoric and phenomenal. FastCompany just listed “The World’s 50 Most Innovative Companies.”  According to them, the top 6 are:  Apple, Facebook, Google, Amazon, Square – and Twitter. It’s entirely possible that around the time that Biz hit’s the stage in Las Vegas next week Twitter will have registered it’s 500 millionth account (according to twopcharts).

twopcharts Tracking Twitter Accounts Issued

In the course of those 2,100 days Twitter has demonstrated the power to:

• Report breaking news (USAir landing in the Hudson; Raid on Osama Bin Laden; Whitney Houston’s tragic death)
• Influence topical issues and agendas (SOPA – over 4 million single topic tweets in a day – and several Occupy movements – including Occupy Healthcare)
• Influence political demonstrations around the world (Arab Spring – among others)

The reason for it’s power is simple – if not technically daunting given it’s global reach.  While it’s limited to 140 characters, the service is real-time, global and interactive.  At 250 million tweets per day (and still growing) it’s also massive.  At this scale – it’s no surprise that twitter’s healthcare footprint is also significant – and expanding.  I talked with a few of the early adopters in healthcare and perhaps no one embodies that community spirit better than Alicia C. Staley.

Alicia Staley – Power Tweeter

As a cancer survivor (x3), Alicia first started using the service in 2008 – on the advice of a friend who insisted she had to try it.   Four years later, she is now a self-professed “POWER TWEETER” with almost 51,000 tweets.  [By comparison, Biz himself has about 4,800 tweets.]  As part of an even larger commitment to twitter, Alicia went on to start a weekly virtual support group called a “twitter chat” specifically for breast cancer.   These virtual, real-time group discussions are enabled by twitter through the use of the hashtag (#) symbol that filters individual tweets from the overall massive stream.  Twitter chats typically last an hour or so and there can easily be 1,000 tweets among 50-100 users (or more).  For those who miss the live version – the chat itself can be archived for subsequent reference and review.  Alicia’s avatar (the picture she uses for her twitter profile) is one of those carefree moments in her childhood – which along with her family – helped to pull her through some of the really difficult moments in treatment recovery.

Most agree that the first healthcare specific twitter chat was #hcsm – or simply healthcare social media – but there are hundreds (if not thousands) of twitter chats and hashtags in the healthcare community. Some are disease specific support groups (like #bcsm for breast cancer and #btsm for brain tumor) but others are simply conversations on every imaginable healthcare topic (technical, clinical, social etc…). One great resource for finding all the different twitter communities in healthcare is the Healthcare Hashtag Project sponsored by Symplur (a healthcare social media consultancy). Symplur also maintains an archive of some of the chats and a separate list of hashtags often used during healthcare conferences. There are a few private, real-time communication networks exclusively for doctors (Sermo and Doximity are two examples) but even the very public nature of twitter is finding increased support among doctors who are adding a clinically curated voice to the dialog. One such doctor I talked with is Roscoe Nelson, M.D., F.A.C.S. – who’s twitter handle (@thepeedoc) is a consumer friendly way to engage people with a subject matter that is often sensitive, painful – and deadly. While he doesn’t track the effect of twitter on his practice exclusively – he’s a big fan of the direct and immediate nature of the service and he’s convinced it has added new patients to the group practice.

One of the first institutions to actively embrace, foster and promote the use of twitter – along with a host of other social media tools was the Mayo Clinic. They’ve extended their thought leadership in this area with a significant commitment – including the Mayo Clinic Center For Social Media.  Lee Aase (@LeeAase) is the full time Director by day – and at night the Chancellor of the Social Media University Global.  The University (in spirit if not accreditation) offers several online tutorials on social media including one for twitter.

No one believes that twitter will solve some of the big, systemic healthcare issues by itself, but it has found a compelling way to actively engage a broad range of constituents in the healthcare community – including consumers at scale.  That is all part of the expanding influence of social media in general – and twitter specifically.  I’m keenly interested in what @biz has to say – and his thoughts on how this new and powerful medium can maximize it’s effect on an industry in dire need of transformation in many directions.  For HIMSS to lead the conference with this keynote is both remarkable – and reflective of the emerging opportunity HIMSS sees as well.  Hats off to HIMSS Board Chair Charlene Underwood for acknowledging the growing power and influence of social media in healthcare – and a pitch-perfect keynote selection.

Article source: http://www.forbes.com/sites/danmunro/2012/02/15/twitter-co-founder-biz-stone-to-keynote-himss/

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Nicolas Sarkozy Launches Twitter Account As Election Race Looms

PARIS — Nicolas Sarkozy launched a personal Twitter account and geared up for a prime-time TV appearance Wednesday, amid expectations that the unpopular French leader will at last announce his re-election bid.

The conservative president, whom many blame for France’s economic troubles, has for months trailed Socialist nominee Francois Hollande in the polls. Many pundits say Sarkozy needs to recoup some momentum to stand a chance of winning the two-round vote starting in April.

To most observers, Sarkozy’s candidacy has been more a question of “when” than “if,” and some suggested his deficit in the polls has accelerated its official start to Wednesday. Earlier his entourage had suggested he would wait until March to join the race.

Socialists sought to play down the expected announcement as a non-event and to paint Sarkozy as a permanent campaigner anyway. Sarkozy’s allies spun it their way, saying the president will now be able to break apart Hollande’s platform.

Sarkozy’s looming candidacy has become one of France’s worst-kept political secrets. Media reported his Paris campaign headquarters are ready to go, with about a dozen presidential staffers to move over, and he’s widely expected to attend rallies for his UMP party in the Alpine town of Annecy on Thursday, and in the Mediterranean port city of Marseille on Sunday.

On Wednesday, Sarkozy launched a personal Twitter page, and, uncharacteristically humble, thanked all those “who will kindly follow me.” Five hours after the first tweet on “NicolasSarkozy,” it had reaped 32,000-plus followers. Hollande’s “fhollande” already has over 146,000 followers.

Sarkozy’s second tweet mentioned how he was planning to go on TF1 television for France’s most-watched nightly newscast.

France’s two-round presidential ballot in April and May is likely to have an impact throughout the European Union. Sarkozy has been closely involved in the fight to save the euro amid a sovereign debt crisis in the bloc.

Pollsters suggest that Sarkozy’s political problems are as much of his own making as France’s economic woes. Poll figures by IFOP agency show the biggest slide in his approval rating occurred during his first year – from 67 percent in July 2007 to 41 percent in March 2008 – and months before France was swept up in the fallout of the international financial crisis.

Critics say Sarkozy failed to deliver on promises to improve purchasing power, hiked his own salary, and infused the gilded presidential palace with “bling” that was ill-suited for France’s cultural self-image.

On the night of his 2007 election, he celebrated at one of Paris’ most glitzy restaurants; before taking office, he jetted off to spend a few days on a yacht owned by a super-rich French industrialist friend.

Later in 2007, Sarkozy divorced his longtime wife and began courting Italian former supermodel Carla Bruni – including trips to Disneyland Paris and the Middle East with reporters in tow. In early 2008, Sarkozy crudely insulted a passer-by at Paris’ biggest agricultural fair, an incident caught on videotape that led many to doubt his presidential caliber.

On the issues, Sarkozy has been hurt by the global financial meltdown of 2008, the European debt crisis of the last couple of years, and a general feeling that his electoral slogan “work more to earn more” never did pan out for French pocketbooks.

“This doesn’t mean it’s all over, but there is a real difficulty for the incumbent president to win back the favor of public opinion,” said pollster Frederic Dabi of IFOP. He said polls show that French voters are firming up their decisions even before Sarkozy has entered the race – another sign that bodes badly for him. Polls show Sarkozy also received little to no help from a long TV interview last month shown live on several channels that drew 16 million viewers.

Internationally, Sarkozy has drawn plaudits. While holding France’s EU presidency, he took a key mediating role to ease tensions after the brief war between Georgia and Russia. Last year, he committed French soldiers to help support the overthrow of entrenched autocrats in Libya and Ivory Coast. He brought France back into NATO’s top echelons in 2009.

Sarkozy, considered pugnacious and impetuous, is bracing for a tough fight. His advisers, speaking on condition of anonymity, say his prospects are “complicated” but that Hollande, admittedly the favorite, can still be brought down.

___

Jamey Keaten contributed to this report.

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Article source: http://www.huffingtonpost.com/2012/02/15/nicolas-sarkozy-twitter-elections_n_1278677.html

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Zynga Tumbles as Game-Development Costs Crimp Profit

February 15, 2012, 8:35 AM EST

By Douglas MacMillan

(Corrects company name in 12th paragraph.)

Feb. 15 (Bloomberg) — Zynga Inc., the biggest developer of games for Facebook Inc.’s site, fell as much as 11 percent in late trading yesterday after product-development costs weighed on profit.

Earnings before interest, taxes, depreciation and amortization fell 34 percent to $67.8 million in the fourth quarter from a year earlier as expenses climbed, the San Francisco-based company said in a statement.

Zynga, which raised $1 billion in a December initial public offering, is trying to maintain its grip on social-networking gamers by creating new titles and features. Research and development costs jumped more than eightfold to $444.7 million last quarter, the company said. Sales and marketing expenses almost tripled to $112.2 million.

“The fact that RD went up more than we expected is not a good sign,” said Benjamin Schachter, an analyst at Macquarie Capital in New York who has a “neutral” rating on Zynga. “They are continuing to spend more money to create games.”

Zynga dropped as low as $12.78 in extended trading after the report. The stock, up 44 percent since it began trading Dec. 16, had climbed 7 percent to $14.35 at the close in New York.

Zynga spent money on a new technology infrastructure called “Cloud Z” and hired experts in areas such as mobile gaming, Chief Operating Officer John Schappert said in an interview.

“Our expenses and costs are in line with our growth plans,” Schappert said. “We’re investing for growth in our business.”

Sales Gain

Zynga makes money by selling virtual goods within its games — say, a gun in “Mafia Wars” or a tractor in “FarmVille.” Sales rose 59 percent to $311.2 million in the fourth quarter. Analysts had predicted $301.1 million on average, according to a Bloomberg survey. Excluding some costs, profit was 5 cents a share, higher than the 3-cent estimate.

The company posted a net loss attributable to common shareholders of $435 million, or $1.22 a share, compared with a profit of $16.1 million, or 5 cents, a year earlier. The results included $510 million of compensation expenses for stock issued to employees, which weren’t recognized until the IPO.

Bookings, or the total value of virtual goods sold in the quarter, were $306.5 million, up 26 percent from the fourth quarter of 2010. The company expects 2012 bookings of $1.35 billion to $1.45 billion. Zynga’s reported revenue includes virtual items sold prior to the quarter and amortized over their expected life.

Friend of Facebook

The shares got a bump earlier this month when Facebook filed for its own IPO. Facebook, the world’s biggest social network, said in its S-1 filing that it relies on Zynga for 12 percent of its revenue, reassuring investors in the gaming company. Facebook takes a 30 percent cut from purchases of virtual goods within Zynga games.

Zynga’s rally raised expectations for the earnings report, making it harder for the company to impress investors, said Arvind Bhatia, an analyst at Sterne, Agee Leach Inc. in Dallas.

“The Wall Street expectations had become way too high and there was too much optimism that had been built into the stock price, particularly since the filing of Facebook’s S-1,” Bhatia said.

The company did get a boost last quarter from newer games, which helped the company make 6.1 cents from the average daily user, up from 5.5 cents a year earlier, said Atul Bagga, an analyst at Lazard Capital Markets in San Francisco.

More Engaging?

“That is basically telling you that the newer games they are launching are more engaging and better, and its users are going to spend more money than they would in the past,” said Bagga, who recommends buying Zynga’s stock.

“Hidden Chronicles,” released last month, has become Zynga’s third most popular game, with 30.2 million monthly users, according to research firm AppData. It ranks behind two more established games, “CityVille” and “Texas HoldEm Poker.”

Social games will generate $5.33 billion this year, an increase of 40 percent since last year, according to Lazard. By 2012, the market could grow to $8.98 billion. Zynga operates six out of the seven top games on Facebook, according to AppData.

Electronic Arts Inc. has been Zynga’s chief rival in social games, with its “Sims Social” game attracting 20.9 million monthly users. Rovio Entertainment Oy emerged as a competitor this week, when it released a version of its popular “Angry Birds” game for Facebook.

Zynga’s “growth will be weighted towards the back half of the year,” the company said in the statement. That suggests that its most significant new products won’t be released until the summer, said Colin Sebastian, analyst at Robert W. Baird Co. in San Francisco.

“It’s good that they are trying to constrain expectations here, given the run-up in the stock and some uncertainty about how new games will perform,” Sebastian said.

–Editors: Nick Turner

To contact the reporter on this story: Douglas Macmillan in New York at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-15/zynga-tumbles-as-game-development-costs-crimp-profit.html

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