Zynga’s Unredacted Response To EA: Uh, You Weren’t Suppose To Sue Us Over These Hires |

zynga logo

Earlier today, Zynga filed a scathing legal response to EA’s copyright lawsuit — with a few sensitive areas redacted. However, it turns out that TechCrunch readers are even more awesome than I expected, because one of them figured out how to un-redact the document and sent us the full countercomplaint, sans black bars.

So what was missing? Basically, more details about supposed agreements between Zynga and EA, and allegations that EA has violated the terms of those agreements.

If you read our earlier coverage, you may remember that in addition to responding to EA’s accusations that it had stolen copyright-protected elements from The Sims Social, Zynga filed a counterclaim accusing EA of anti-competitive behavior. Specifically, the counterclaim alleged that EA tried to convince Zynga to enter into a no-hire agreement, and threatened to sue Zynga if not.

The counterclaim also states that during the course of those discussions, Zynga reached multiple settlement agreements with EA over the hiring of EA executives. In the version sent to reporters, the details of the settlements were redacted. We still don’t have a copy of the settlements themeslves, but the big one seems to be summarized in the now-unredacted portions of the agreement: According to Zynga, it agreed not to solicit EA employees in limited circumstances, in exchange for EA’s “release of claims,” i.e, agreement not to sue Zynga over the hires. Here’s how Zynga describes the agreement (previously redacted portions in bold):

Even though Zynga was confident that it had done nothing wrong, Zynga agreed to enter into a settlement agreement that included lawful, appropriate, and extremely narrow non- solicit restrictions in the context of a non-monetary settlement agreement that included a release of claims as well as a means to address any related dispute that might arise.

Later, in the now-unredacted sections, Zynga alleges that EA violated by “bringing suit against Zynga for purported claims covered by the releases set forth in those agreements” and “failing to comply with the mandatory dispute resolution provisions set forth in those agreements.”

You can read the unredacted counterclaim below.

Counterclaim Unredacted

TechCrunch » Social

Zynga’s 2012 Outlook: Traffic, Paying Users, Bookings Are Headed Up |



Zynga’s first earnings release today makes the social game developer’s business look notably stronger than it had when the company went public in December. Its traffic, paying user base, and projected bookings are all headed into positive territory, whereas these numbers had been flat or falling towards the end of last year.

Bookings, the short-term measure of when the company sells a virtual good or other item, were already up last quarter. But Zynga says in the release that more growth is on the way — a year-over-year increase of between 16% and 25% in 2012, to between $ 1.35 billion and $ 1.45 billion. “We expect that growth will be weighted towards the back-half of the year with slower sequential growth in the first half of the year,” according to the release, although the reasoning isn’t explained.

That’s a bit surprising considering that the company has invested heavily in launching and marketing a string of new titles over the last four months or so — these games should be driving bookings up now, not in half a year. Maybe Zynga knows something about what’s happening on Facebook, Apple’s iTunes App Store and its other platforms, that it’s not talking about? Or maybe it is planning something else that’ll make a big positive difference, like the launch of its long-rumored standalone gaming portal?

[Update: Zynga executives said on the call today that, generally, they see older games make more money over times as serious users get more committed — that is, spending more. Also, like I guessed, they hinted that the “Project Z” platform is still in the works, and will be launching at some point.]

Even if the first and second quarters of this year aren’t as exciting, investors should still look for bookings increases when the numbers come out for those quarters. Zynga says that its paying users grew from 2.6 million to 2.9 million over the fourth quarter, which is part of a long-term trend in the industry — everyone is gradually figuring out how to lure more users to pay, even though only a fraction of them currently do. For Zynga, the growth in paying users was no doubt aided by its launches and traffic growth during the quarter — as I noted earlier today, the company has managed to increase its daily active user count significantly in recent months. As of the end of 2011 it was up from 48 million a year ago to 54 million. As of today, it’s past 58 million, according to AppData. Daily active usage tends to correlate with paying users, because the more often you’re playing a game the more often you’re going to want to pay.

[Top photo via VentureBeat.]

Zynga Contributed 15% of Facebook’s Revenue In Q1, Down From 19% A Year Ago |


Zynga and Facebook are ever gradually trying to separate from each other. It’s working — sort of?

Facebook said today that 15 percent of its revenue in the first quarter came from either advertising or payments tied to Zynga games.* That’s down from 19 percent during the same time a year earlier.

About 11 of the 15 percent in revenue was from the 30 percent revenue share Facebook takes from transactions in Zynga games on the platform or advertising that Zynga directly paid Facebook for. Another 4 percent comes from advertising shown alongside Zynga content.

Facebook continues to emphasize that any bad blood between the two companies could hurt financial results. Zynga recently overhauled its site as a web destination for gaming that it hopes will attract users away from the Facebook canvas. The social network is still powering payments for the site, however, meaning that Zynga is still paying Facebook its 30 percent share.

“Zynga may choose to try to migrate users from existing Facebook-integrated games to other websites or platforms,” Facebook said in an updated filing for an initial public offering. “We may fail to maintain good relations with Zynga or Zynga may decide to reduce or cease its investments in games on the Facebook Platform. If the use of Zynga games on our Platform declines for these or other reasons, our financial results may be adversely affected.”

Overall, Facebook’s payments and fees revenue is pretty much double what it was a year ago at $ 186 million, up from $ 94 million. It makes up 17.6 percent of Facebook’s overall revenue, up from 12.9 percent in the first quarter of last year. But this isn’t a perfect comparison since Facebook’s 30 percent revenue share for transactions on the canvas only became mandatory last July. Payments and fees revenue is basically flat on the quarter too.


*Note: There was a 12% figure that was widely reported a few months ago when Facebook first filed for an initial public offering. But that was Zynga’s share of Facebook’s revenue for all of 2011 and it excluded advertising bought by other companies that shows up alongside Zynga games.

Here’s the exact text if you want to read it yourself:

In 2011 and the first quarter of 2012, we estimate that up to 19% and 15% of our revenue, respectively, was derived from Payments processing fees from Zynga, direct advertising from Zynga, and revenue from third parties for ads shown on pages generated by Zynga apps. If Zynga does not maintain its level of engagement with our users or if we are unable to successfully maintain our relationship with Zynga, our financial results could be harmed.

In 2011 and the first quarter of 2012, Zynga directly accounted for approximately 12% and 11%, respectively, of our revenue, which was comprised of revenue derived from Payments processing fees related to Zynga’s sales of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga’s apps generate pages on which we display ads from other advertisers; for 2011 and the first quarter of 2012, we estimate that an additional approximately 7% and 4%, respectively, of our revenue was generated from the display of these ads. Zynga has recently launched games on its own website and on non-Facebook platforms, and Zynga may choose to try to migrate users from existing Facebook-integrated games to other websites or platforms. We may fail to maintain good relations with Zynga or Zynga may decide to reduce or cease its investments in games on the Facebook Platform. If the use of Zynga games on our Platform declines for these or other reasons, our financial results may be adversely affected.


Zynga Accused Of Ripping Off Another Competitor’s Game –


Zynga Bingo4

Last week, the developers at NimbleBit (makers of iOS Game of the Year, Tiny Tower) accused Zynga of copying them with its new game, Dream Heights. Now, it’s happening again. This time, the accusation comes from Buffalo Studios, which says that the gaming giant copied its flagship title Bingo Blitz with its launch of Zynga Bingo.

The news, reported first by VentureBeat, involves accusations from Buffalo Studios that Zynga’s newest title involves “striking similarities” in terms of its graphics, layout and game play with its own Bingo Blitz. The company also released an infographic which (sarcastically) began: ”Hello Zynga. We are moved that your new game was so inspired by our innovative product, BINGO Blitz…,” before continuing on with a serious of screenshots showing examples of the similarities in question.

However, unlike the situation with NimbleBit, it doesn’t appear that Zynga first attempted to acquire Buffalo Studios prior to the launch of the new title.

Bingo Blitz claims to have over one million daily active users, according to the infographic, and has been “liked” nearly 2.5 million times.

While it’s notable that the high-profile Zynga is the company being targeted here in terms of stealing its “inspiration,” (especially since Zynga itself once targeted its own copycats via lawsuits), game developers ripping off each others’ work seems to be the new normal for the industry. Lawyers, start your engines. If a company as large as Zynga is playing dirty, there’s bound to be lawsuits aplenty ahead.

Image credit: Buffalo Studios, via VentureBeat

Zuckerberg’s Disrupt Talk Pushes Facebook Stock Up 8.9% To High of $21.16 |

Facebook CEO Mark Zuckerberg


Facebook stock rose 8.9% to a high of $ 21.16 per share today, the first day of trading after CEO Mark Zuckerberg’s first public interview since the company’s IPO. The stock rose in after-hours trading immediately following Zuckerberg’s fireside chat at TechCrunch Disrupt in San Francisco yesterday, and then jumped again when the market opened today.

The new high today is the highest the stock has traded at in almost a month. The stock closed at $ 20.91, still a 7.62% increase over yesterday’s close of $ 19.43.

In his talk with TechCrunch founder Michael Arrington yesterday, Zuckerberg shared details on Facebook’s mobile strategy, a major question mark for investors.

He explained that Facebook acknowledged it had misjudged HTML5 and refocused on its own apps. The social network saw users’ consumption of news feed stories double following the launch of its new iOS app. That’s a simple but astounding statistic. Double the content consumed. Double the advertising opportunity.

While the stock price surge is nice for Facebook and Zuckerberg, it only really matters if it signals a long-term shift in investors’ perception of Zuckerberg as CEO. If the stock drops again in a few days, then this was just another rise and fall in the long, downward trajectory of a volatile stock.

However, if Zuckerberg’s widely acclaimed talk convinced shareholders of his strength not just as a founder and entrepreneur but as a professional, mature CEO, then we could be seeing the beginning of a longer, potentially more steady rise for the stock.

Apple announced today that it has integrated Facebook into iOS 6, a long expected move, which also could have contributed to the increase in stock price.

TechCrunch » Social

Zuckerberg in Moscow to boost Facebook’s Russia presence –


Facebook founder Mark Zuckerberg was Monday in Moscow on a visit the government believes should stimulate innovation in Russia and the social network hopes will boost its position in the Russian market.
Zuckerberg was to meet Prime Minister Dmitry Medvedev along with the main government pointmen on innovation in Russia, Deputy Prime Ministers Arkady Dvorkovich and Vladislav Surkov.

The government has said they will discuss cooperation in IT technology and start-ups in Skolkovo the technology hub outside Moscow that has been championed by Medvedev as a Russian equivalent of Silicon Valley.

Zuckerberg, 28, wasted no time in exploring the Russian capital after his arrival, posing for photographs in Red Square like an ordinary American tourist in one of his trademark hooded tops, Russian press reports said.

Staying true to his roots, he then headed for a meal at a nearby branch of McDonalds.

Regularly brandishing an iPad at government meetings and publishing comments on Twitter, former president Medvedev likes to promote himself as the main proponent of a drive to give Russia a more innovation-based economy.

Critics have regularly ridiculed his often banal utterances on Twitter and noted that making Russia a true innovation-based economy is still just a pipe dream.

Zuckerberg will be hoping his visit boosts Facebook’s presence in Russia, one of the few major countries worldwide where it is not the number one social network.

Facebook lags well behind Russia’s most popular social network VKontakte, founded by Saint Petersburg native Pavel Durov, 27, often described as the “Russian Zuckerberg.”

VKontakte is aimed firmly at Russian speakers, allowing it to better respond to a very specific local market.

Zuckerberg’s visit is not entirely free of controversy, with Russian firms saying his main aim is to headhunt Russian tech talent and lure recruits back to California.

While this is his legitimate right, the government should do more to keep homegrown talent in the country, the Vedomosti business daily quoted as saying the chief executive of the country’s biggest IT holding IBS Group, Anatoly Karachinsky.

“If the authorities are interested in helping Russian companies then they should encourage Western firms to make their orders here just like India and China have done,” he said.

Representatives of Vkontakte and Russia’s largest Internet company Mail.ru confirmed to Vedomosti that Facebook had made attempts to tempt their employees out of Russia.

High standards of education in Russia and strong traditions in research make Russian programmers highly sought-after worldwide, even if now the differences in pay are not so stark between Russia and the West as they were in the 1990s.

Meanwhile, Russian also has its own homegrown Internet industry with Russian-language firms like VKontakte and Mail.ru having tens of millions of users and start-ups enjoying success in both Moscow and Siberia.

Although it is believed to be his first visit to Russia, Zuckerberg’s company already has close links to the Russian Internet sector.

Russian technology investment firm DST Global, whose main shareholder is oligarch Alisher Usmanov, has a stake of at least five percent in Facebook although some observers estimate that the holding is even higher.

The anti-Kremlin demonstrations that rocked Russia since December have largely been coordinated through social networks and analysts say that the increase in Internet use poses a significant challenge for the domination of President Vladimir Putin.

Source: NDTV

Zombie head bowling balls |


Guys, guys – the next time you want to organize an evening with the rest of the gang, why not take up bowling as an alternative to just drinking yourselves silly in a bar or at a club? After all, you can still get your favorite ale at most bowling alleys, not to mention this is an extremely social environment for you and the gang to chillax. Of course, being testosterone-laden, you will definitely want to stand out from the rest of the pack – so why not go all the way and send these bowling balls down the lane to knock ‘em pins while scaring your neighboring lanes? After all, it is not every day that you throw a zombie head down a bowling alley, right?

These bowling balls were the brainchild of advertising agency Jung van Matt, who decided to take the road less traveled and printing different zombie heads in various stages of decay and grossness in an advertisement which promotes the 13th Street chain. Definitely eerie when they are at a standstill, what with gouged out eyes and blood splattered all over the place.

You’ve Got Facebook Fans, Now What? Booshaka Raises $1M To Ensure Your Posts Earn You Money |



It doesn’t matter if you have one million Facebook fans if they never see your news feed posts. That’s why SV Angel, Founders Fund Angel, and more have backed a $ 1 million Series A for news feed optimization service Booshaka, which is also launching a big product update today.

The startup helps businesses identify their most active fans — especially the 10% generating 90% of the engagement — and incentivize them to leave even more wall posts, Likes, and comments. This feedback signals to Facebook’s news feed sorting algorithm EdgeRank that a business is high-quality and that its posts should be shown to a higher percentage of its fans. More impressions -> more clicks and awareness -> higher return on investment for businesses on their social media spend. This is social SEO, and it’s worth paying Booshaka for.

A lot of people don’t realize that businesses only reach an average of 12%-16% of their fans with each news feed post. That’s because some might not be online around they time a post is published, but it’s also because of EdgeRank, which determines which posts are worthy of being seen. A big signal that goes into this relevance rank is how often a Page’s fans have engaged with it in the past.

So if businesses want more reach in the news feed, they need to inspire their fans to be active, and then amplify their mentions of the brand through social ads. Booshaka accomplishes this with a product suite including analytics, evangelist recognition apps, and an Facebook Ads API interface.

First, business give Booshaka permission to analyze their Page wall and identify their loudest fans. Pages can then install a leaderboard application on their Page that offers fame to those who engage most frequently.

Booshaka’s Activity Feed app highlights the latest participants in the conversation, and an Activity Box app lets Pages ask fans to complete specific missions such as uploading a photo or checking in to a physical store. Pages can then reward fans for their engagement with virtual goods, badges, real product samples, and discounts. All these activities improve a Page’s EdgeRank.

But here’s where Booshaka gets really smart. These actions automatically generate mentions of a brand that can be turned into Sponsored Stories ads on Facebook. These social ads that amplify word of mouth’s reach have proved to be influential and have stellar click-through rates. They’re also the only types of ads that can appear on Facebook mobile. Booshaka even tells brands how to target these ads by identifying Pages with similar fan bases who the ads would seem relevant to.

Investors think news feed optimization (NFO) could a big business the way search engine optimization did. 120,000 Facebook Pages have already signed up for Booshaka’s help, leading to today’s Series A participation from SV AngelPivotNorth Capital, FF Angel, Joe Lonsdale (CEO of Addepar and co-founder of Palantir), Peter Weck (co-founder of Keepsy and Simply Hired) and Rich Skrenta (CEO of Blekko).

Booshaka will be competing with other NFO services such as 500 Startups’ PostRocket, analytics providers including PageLever and EdgeRank Checker, plus the big dogs of Facebook marketing like Buddy Media, Vitrue, and Wildfire. Booshaka’s basic apps are free, with premium rewards and analytics capabilities ranging from $ 30 to $ 500 a month based on fan count, and enterprise service with competitor benchmarking and more available for Pages with over 75,000 fans.

Brands have spent the last few spending millions on enterprise  social marketing services who build them contests to net them new fans. But sometimes these are just fair-weather fans who are just looking to win prizes, and who aren’t necessarily potential customers. Even if they’re the right fans, they might never see a brand’s marketing messages if their EdgeRank is too low.

Booshaka’s founder and CEO Erik Ober tells me “This first wave of the companies took advantage of the naive the market, [charging them to] acquire these huge audiences that don’t care. Now it’s our job to go out and find the people that are engaged and rally them around the conversation.” If Booshaka works, brands won’t need to buy more fans because they’ll be able to squeeze more ROI out of the ones they already have.

TechCrunch » Social

YouTube Video Hints At New T-Mobile myTouch Phones By LG |

It used to be that T-Mobile’s myTouch line consisted exclusively of HTC devices, but a video uploaded to T-Mobile’s official YouTube account has revealed that the myTouch club may have some new members.

Before being marked as private, the tutorial video briefly showed off two heretofore unseen LG smartphones, named simply the myTouch and the myTouch Q. A similar pair of LG phones was spotted in a leaked T-Mobile roadmap from a few months back, meaning that this could be the first glimpse of the rumored LG Maxx and Maxx Q.

The LG myTouch line bears a striking resemblance to LG’s Optimus Sol, which as TmoNews points out has a 3.8″ AMOLED display. The screen size seems consistent, as does the strangely low placement of the three Android softkeys, but it’s too early to tell if the LG myTouch is just a simple rebrand. The Maxx Q was also reported to sport a four-row QWERTY keyboard, which for right now seems like the only major difference between the two units.

Given the number of other myTouch entries in T-Mobile’s lineup, the branding choice here seems a bit puzzling. To call LG’s device simply the “myTouch” almost seems to imply that it’s more of a myTouch than all of HTC’s devices. It wouldn’t surprise me if T-Mobile made the video private to fix certain inconsistencies in the title and description. Still, if the original roadmap is to be believed, then we’ll only have to wait until November to find out the real deal.