It started (at least in the public eye) last week, when TechCrunch columnist Michael Arrington attended the Virtual Goods Summit in San Francisco. Social media focused companies like game developer Zynga (YoVille, Texas Hold'Em, FarmVille, and similar games) and advertiser Offerpal Media (an agent for many of the targeted advertisements you see on Facebook) were in attendance. In the Q&A session of the final panel, he took the opportunity to confront representatives of these companies on what he called "the completely unethical way that they are going about achieving that success." Anu Shukla, the CEO of Offerpal, gave an emphatic rebuttal to his accusations. If you're interested in watching their exchange, you can see the video here:
Essentially, Arrington accused these companies of making their money in extremely unethical ways, with detailed examples to back up his claims, and Shukla refuted his arguments. Once the summit ended, both parties in the debate used their respective blogs to re-state and further detail their side of the story.
- Offerpal posted "Virtual Good Summit 09: What An Ending!" on their corporate blog, essentially just reprinting the defense that Shukla had made in response to Arrington.
- Meanwhile, Arrington gave more detail about Facebook based scams and the unethical behaviour of these companies in his 31 October post "Scamville: The Social Gaming Ecosystem of Hell"
Initially, both sides presented strong arguments and it wasn't entirely easy to tell exactly where the truth lay in a very grey area. However, if you follow the Arrington link above you'll see a series of updates to the story that have occurred just in the past week, which speak pretty loudly for themselves. The highlights included:
- An interesting guest post from Dennis Yu entitled "How to Spam Facebook Like a Pro: An Insider's Confession" gave an insider's view of how to spam and scam on Facebook advertising (and what the implications can be to you, the user).
- MySpace, and then Facebook, hastily took steps to tighten up their anti-scam regulations.
- Marc Pinkus, the Zynga CEO (whom Arrington called out as admitting to deliberately scamming users as a fundamental part of their business model) announced that they were working hard to police and remove bad offers. ("Zynga Takes Steps to Remove Scams from Games")
- And just yesterday it was revealed that Anu Shukla has been replaced as the CEO of Offerpal. In "An Open Letter from Offerpal's New CEO" the new CEO George Garrick states that he "quickly concluded that regrettably, Offerpal has been guilty of distributing offers of questionable integrity from some of our many advertisers" and promises to that the community will very quickly see action and results towards improving that situation.
Further updates will no doubt be forthcoming from Michael Arrington's column on TechCrunch, and it certainly seems likely that this isn't the end of the changes that will happen in this area.
So there you go, if you missed this little bit of industry intrigue, now you're enlightened. I have no particular point to make other than to share some interesting information, but hopefully this all will lead to good things for users of MySpace and Facebook apps, as well as a better environment for game development companies themselves that does not actually put ethical behaviour at a disadvantage!
(I also must confess that watching the back-and-forth unfolding of this argument this week has also been the best can't-look-away-from-the-train-wreck type industry entertainment since watching Brad McQuaid self destruct.)
Tangentially, if you're curious about what kind of information the Facebook applications you click on can learn about you, check out this interesting talk given in September by my friend Paul Fenwick. Heck, listen to it just for the charming Aussie accent.
Now carry on back to your regularly scheduled tradeskilling!