Zynga CEO Mark Pincus said earlier this week that he intends to make sure his company’s games don’t include scammy offers in the future. Our full background on this story is here.
But what he didn’t say in that blog post is that Zynga has been scamming users from the beginning quite intentionally as part of their revenue model. Rather, he pointed much of the blame at middlemen offer companies: “We need to be more aggressive and have revised our service level agreements with these providers requiring them to filter and police offers prior to posting on their networks.”
Last spring, though, he gave a much clearer explanation to an audience at a Startup@Berkeley mixer, admitting that scamming users was part of Zynga’s business model from the start. And it was all caught on video. I think everyone sort of knew that this was exactly Zynga’s gameplan. But to hear it said so directly is just shocking.
The full 30ish minute video is here. We’ve taken the relevant section of the video, roughly starting at around the 10:40 mark, and embed it below. From the video:
I knew that i wanted to control my destiny, so I knew I needed revenues, right, fucking, now. Like I needed revenues now. So I funded the company myself but I did every horrible thing in the book to, just to get revenues right away. I mean we gave our users poker chips if they downloaded this zwinky toolbar which was like, I dont know, I downloaded it once and couldn’t get rid of it. *laughs* We did anything possible just to just get revenues so that we could grow and be a real business…So control your destiny. So that was a big lesson, controlling your business. So by the time we raised money we were profitable.
Oh man, this just keeps getting better and better. Wherever you guys dug this up, or whoever submitted it – great work!
doesn’t matter..it worked…
One could say that Google did and continues to promote a variety of scam offers through AdWords/Sense. They’ve tried to clean things up, or at least move the small players out with quality score, page 1 pricing, etc, but the real results show: http://www.goog...berry&pws=0
The second result when I searched was “www.CNN.com” What you want to bet that it really isn’t CNN but some scam site? These clicks cost about $3 or more a pop, so Google is still making big money off of rebills.
good lord how does some who looks like a ned/chav hanging round the sainsburys carpark in his hot hatch with the tacky body kits ever get veunding from a reputable VC
I’m pretty sure that selling one company and taking another public has a lot to do with it. What’s on your rezzy?
You sound like you’re from London…
looks like you’ve got a little pain behind those eyes ?
behind every great fortune is a crime
Zynga is just malware. that’s all.
it’s not like we’re the only company doing it, so stop accusing us of committing crimes.
Freaking idiot.
Just because everyone is doing it isn’t justification enough to go around scamming people.
Reading the quoted text from the video speaks volumes about your boss, just an ordinary man trying to be a gr8 entrepreneur, and reading alot of books while at it.
“control your destiny?”total crap
You people have a lot of money now, you could adopt a more legit model and stop making excuses.
lol.. wiki toolbar and cudnt get rid of it..
my sister had the same fate with the tattoo toolbar .. it was fkin pain removin it ..
you can always reinstall all of windows to remove our premium pro software. most people find the functionality of 5 to 10 toolbars in their browser very helpful and helps them become more efficent. we like to say that our software makes you a “power user.”
–zynga.com
“Great games. Great toolbars.”
Are you kidding me? 5 to 10 toolbars makes you a power user? 5 to 10 toolbars is the exact freaking opposite of a power user!
i dont believe this someone actually thinks this. i am computer repair and that many toolbars will hhijack ur explore so u cant get anywhere!!! who they kidding the pay as u click has made them all rich scamming everyone in their way
Lol someone didn’t get the sarcasm
I’m pretty sure he/she is kidding. Zynga definitely has a good sense of humor, but questionable sense of business ethics.
It is a crime to infect consumers personal computers with any form of malware with the intent to earn revenue from it. You idiot.
hay mike
how long until he gets let go…my take on this was this was a whole scam and he will keep his job and shirt…what a scammer….kpcb needs to pull the plug on this guy and keep clean of this business model.
james
no, he’s not going anywhere. He clearly had no idea this would all blow up way down the road. But by taking a leadership position now he’ll absolutely be forgiven. Quickly.
Yes he isn’t going anywhere, as he says in the video:
“I control my company today…I created a B stock with 10X votes.”
Usually someone who was pushed out of the previous company they founded protects themself with 10X voting power in their next company. Smart cookie
that too.
multiple types of stock like that is still a sign of doddgy geezer
And someone who operates like a used car salesman takes that attitude with him wherever he goes. Not only are their games shitty, shameless copies of other shitty games, their attitude to their users is that of preying on suckers, and their company is a sweatshop.
Lovely.
The fact that, as he said, he was profitable before funding due to the scams, he was able to retain control. It really helps when you’re making money
So what? Just let Zynga as a whole go. And put your attention on people who are actually focusing on creating great gaming experiences instead of get-rich-quick schemes passed off as games.
I am tired of the shallow apologies that leaders give when they’re caught.
If Mark Pincus was truly sorry for scamming users, he would return all revenues generated from scammy offers. Think that is going to happen?
Some moral systems have the concept of penance: giving back to those who have been hurt to demonstrate genuine regret. Until leaders give penance, apologies are just empty words, and the same beat will go on…
Was this even an apology? I didn’t watch the entire video, but as far as I can tell the lesson I’ve learned is that I really need to start screwing people so that I can have more freedom. This seriously looked like a how-to video and not an apology.
So the moral of the story is:
Do whatever you can to get rich, screw your users, create “super” stock to control your investors, push out competitors or buy them with “offers they can’t refuse” and in the end, it’s going to be “OK” because you’ve turned over a new leaf.
The morals in this world are pretty screwed up.
Thats how the get rich quick, make money online gurus have been doing it for years. On the old search engines, then on Google, now on Facebook, they are everywhere, you can’t throw a click online without hitting one.
What’s really screwed up is the users allowing companies like this to screw them over and over again.
Kick the dog (users) anytime you feel like it. It will love you again in the morning.
And it will continue to go on…
JP Morgan 2.0
It is unfortunate that this was the path he took to get where he was, but wasn’t MySpace started by shady characters?
He is not without taint, but what he chose to do now is important. Especially now he has a compelling company and is a market leader.
http://www.traderbots.com
Too little too late even if he’s not operating scams now. What he’s doing (and you’re saying) is giving license to scammers out there that it’s OK to scam, in fact it’s just “part of the process” to scam, to “work you way up”. I hope YOU get scammed by these companies you endorse, and perhaps you might have a different opinion.
Pincus should be gone immediately.
He’s an embarrassment to his employees, investors and (if there are any) legitimate business partners.
Why are you covering for him, Michael?
Wow, I like this Michael. Hats off.
So did someone piss M. Arrington off?
Or is this whole campaign his bid for journalistic recognition?
I dunno, but I can tell you now that for the first time I believe this guy can take a whole freagin’ industry down. Best advise is for everyone involved to come clean now and be humbled.
He’s doing a great job, boondo. So fuck off.
There’s really no way to spin this kind of shamelessness, is there? Painful viewing.
This only highlights the issues that are created when potential investors demand large shares of companies if they are not generting revenue shortly after day one of operations.
You lie, cheat, steal, and do whatever it takes to generate revenues so that you can receive an investment deal that will allow you to “Control your own destiny” Never mind that you scamed users to do this.
I think that there is a need to create a kind of “Best Practices” pact that sites sign on to be a part of. By siging on you agree that you will not scam users. If you do scam than you are off the list of “Best Practice” sites and your scam tactics are documented and published to the site.
This can bring a very much needed level of tranparency to the process.
Well said William! Great idea on the “Best Practices” stamp of approval.
“By siging on you agree that you will not scam users” yep, that would be a start, get the CEO to say it in plain English.
There are already codes of conduct that ethical networks belong to – so he actually need to change the companies they use as advertisers – scammy networks will house scammy offers – it’s all about MONEY – they don’t give a toss if you are a happy,friendly social networker type person or a hillbilly teenager – they just want to rip you off then blame the customer for being GREEDY.
At the moment they are taking the blame, but their scam buddies are already thinking of ways to tweak the plan – end result – people are still gonna be ripped off.
Good to highlight it occasionally – but scamming is deeply ingrained in the Internet profit machine – Google make money from it – they all do – they are surviving the recession by taking money out of little kids wallets – they are the exact type that would steal food off a hungry baby in order to survive – that is real business – they are laughing their heads off at anyone that buys from them – like the 409 scammers.
exactly how is google making money off of scams? back up your accusations
its painful to watch and how no one noticed this before is odd. oh well, good work Mike.
Wow. The domino effect.
Facebook could be next. We already know MySpace has been missing revenue target like crazy, and this is before the current “Scamdal” (see, I just coined a new word) hit.
In some circle, these people are heralded as the “Golden Boys of Web 2.0″, their companies’ eye-popping growth got them financial magazines write-ups and TV interviews by pandering hosts.
Congrats, Mr. Arrington, great job. If Facebook survives this “scamdal”, the smiling golden boy owes a you huge debt.
Entertain a hypothetical here: if the former OfferPal CEO were to be very polite in the conference and said to Mike things like, “You’re right, Mr. Arrington, we’re aware of these scams, and we will clean them up.” There would be no sensational video, and possibly only a much subdued blog post by Mike, and Zynga and Facebook would continue business as usual.
But then all it takes is one pissed-off parent, one clever lawyer, one class-action lawsuit, or worse, one energetic district attorney, and the whole house of cards will fall, a la, Enron.
it’s a good question.
Our man Mike wakes up one fine morning, questions the CEO of a scammy company, she in turn rips him apart verbally (not logically), our man Mike gets pissed off and starts digging stuff to prove they all are scammy and in the climax “twittergate” Mike becomes the ethical police of the Internetz.
Look at what Goldman Sachs is doing and tell me that this even comes close! And is Goldman being held publicly accountable? No, of course not. Welcome to the 21st Century kiddies — if you don’t cover your tail no one will do it for y–
I take that back. No matter what tail-covering we attempt, nothing will change as long as we’re just sitting in front of the computer complaining about it!
People in the streets. That is the one and the only thing that public/private entities fear and respond to.
Well, even if they are a bunch of SHADY F@#$s, farmville is so much fun
now, excuse me while I go harvest my pumpkins and collect my turtle eggs.
you always put things in perspective, Justine.
hahaha thanks
Lemme know if you ever wanna be my neighbor!
http://en.wikip...urtles_and_eggs
Heh.
What an airhead.
+1
+2
I don’t think that’s really her.
This is getting so old and boring – is there another story out there…
Obviously Zynga is the undispted leader and everyone else – especially the losers at Slide,are jealous.
noted. in my defense I thought this story was done days ago. all this new stuff just keeps happening.
Mike
I got the impression that everyone was jealous of Offerpal since they got their business model right over the likes of Slide and RockYou…How many times has Slide changed it’s business model…I get the impression that too many people got jealous at the likes of Super Rewards and OfferPal and went for their heads…I am watching his clip, and I find it very hard that the likes of a firm like KPCB would invest in Zynga without really looking at the true business model…after this incident starting last week from the conference why are the likes of the other CEO still in place. I do not think this story is done but just start to open up…in the clip mark mentions the 3ed Internet with virtual goods payments and you at techcruch should run with this segment and analysis…Keep the ball rolling. Good Job on your part.
James
well, major media is finally starting to pick this up: http://www.time...1935698,00.html
until now we’ve just had love letters:
http://www.busi...53044881892.htm
http://www.forb...book-zynga.html
http://www.guar...ayfish-facebook
I find it very ironic that TC constantly talks about the end of old media (an how they represent the future of media), and then shouts to the rooftops when the “major media” picks up a story that they started. This happens over and over.
You can’t have it both ways Mike.
Finland’s equivalent of Reuters, STT also ran a story* on Nov 3rd about virtual gaming, concentrating on Zynga & Farmville. It appeared in every major national media.
It included one chapter where shady sides of the business were discussed. I’m guessing that we have TC to thank for that.
*Story Google Translated:
http://translat...history_state0=
I just saw the whole video on vimeo, this guy is NOT a good public speaker… to scatter brained.
irrelevant.
what difference does that make? you don’t HAVE to be a good public speaker
Geoff if your a CEO part of your job is representing the company and i fyou arn’t happy doing that well maybe your in the wrong Job
Its a very small part of the CEO job. Bill Gates was a terrible speaker (he’s gotten somewhat better over the decades).
I agree…Zuckerberg’s legs used to tremble on stage earlier..
Mike, i don’t always know what to think of you…but this whole unraveling has been great. thanks.
i agree with this mike so keep up the analysis and run with this….your blog has the lead….go for the touchdown on 4 and 20 yards
Mike, keep digging! this is a deep deep shit hole and you are doing what we truly respect….Need similar (actually much worse…) stories from China? i can feed that…what a world
Well that’s just embarrassing
So it sounds like if the revenue tumbles sufficiently — that Pincus has no ethical problem running whatever offers are necessary to get back to the top — its all about controlling one’s destiny.
which is why facebook must get its act together.
Why is it up to facebook? Why are we always looking to other people to parent us in terms of morals? Your article basically tells a success story.. sorry I scams you out of millions… we will be good now.. do you know how angry it makes people to download toolbars from hell.. do you know how annoying it is to click on an ad and be taken o a shitty site..
Thi doesn’t just hurt Zynga it hurts the web… cause each person who gets scammed is less likely to purchase stuff online… the CEO is a joke cause what consequences will he face.. a fancy ne yacht… a porches…
It’s Facebooks kingdom, they have to set and enforce a standard that benefits customers, retailers and developers.
Because businesses (and people in general) are not driven by a code of ethics, they are driven by money. In any ecosystem where there is one bad actor scamming and profiting from it, the other actors have to do the same or end up dead.
The only thing that can prevent this downward spiral is a parental authority that has an incentive to protect the ecosystem and punishing the bad actors. In this case that is Facebook – its their environment and they are have done a very bad job of keeping it clean. Their mindset has always been – “atleast we’re better than myspace”.
The same race-to-the-bottom happens in all ecosystems – most recently witnessed in the financial industry. One would think we would have learned by now not to rely on “self-regulation”.
So…don’t click on the ad? C’mon… it’s only scamming if it doesn’t tell you what it does/is…and most of these silly things DO tell you – and idiots still click on them! You can play every Zynga game without paying a dime, clicking an ad or doing anything that is in the “scammer” bucket.
It’s only those who can’t earn the energy/coins/points/whatever fast enough that click on the offers – some pay cash directly to Zynga. MOST do it knowing that they are ginving a credit card number, and many even read tearms of service.
C’mon – blame the guy who puts the ads up for MAKING you click and download something? Get REAL! no one HAS to play, or has to CLICK ads or offers. It’s greed – even in a virtual world. Gotta have those crops NOW!
Hopefully now you’ll stop publishing glowing reports about Zynga, Playfish and social media gaming.
I also don’t think Facebook will be profitable in the next quarter.
Arrington I appreciate you for bringing this up because companies doing the WRONG techniques were WINNING and companies going for the HIGH ROAD were LOSING. With proper regulation, any efficient industry in the long run will not last with this reward system.
I had a few meetings with Mark an Co. very early on when it was three of them and a dog named Zynga at their completely empty offices on Vermont Ave. It was obvious morals were extremely low on their list and thus I opted not to partner with them.
Mistake? Sure from a financial standpoint today I can say it was.
Would I walk away again? Yes.
Call me a purist but I do believe in the long run those that give their users clearly what they want without layers of scamming and devious methods… will win in the end.
At last someone talking morality here!
Thanks
Nice one Jon. I really hate the fact that people using scams to earn money are tagged successful and thanks to the persom or team who dug this out.
“…companies doing the WRONG techniques were WINNING and companies going for the HIGH ROAD were LOSING.”
“Call me a purist but I do believe in the long run those that give their users clearly what they want without layers of scamming and devious methods… will win in the end.”
Good comments and we all agree.
I second that.
The irony in all this is that TechCrunch has essentially promoted Pincus in the past.
From allowing him to participate in a TechCrunch50 panel in 2008 to writing about his keynotes (see “Mark Pincus: Web 3 Is The App Economy” by MG Siegler, “Startup School: Mark Pincus Talks About Becoming A Great CEO, With Tony Robbins’ Help” by Jason Kincaid, etc.), it seems kind of bizarre that all of a sudden a model serial entrepreneur who TechCrunch treated as a legitimate player has been turned into a villain. I’m sure I’m not the only one who suspects there may be more to this story than meets the eye. It’s not as if these “scams” just appeared on the scene yesterday…..
I think it’s ok to change your mind about something… it’s shows a certain amount of openmindedness. However, it IS also possible that there might have been some undercurrent that resulted in this sudden “expose”.
In particular, the first piece was about Offerpal, yet the custom logo for the article was a play off “Farm Ville”, which obviously manipulates us, the readers, to think immediately to Zynga’s products. (And it was not too soon before we did).
There’s something to be said about the candor, nonetheless. That’s some serious “fucking” honesty.
anyone seeing the smiley at the bottom of the page ( Right below Contact and Crunchcam) ?
Voodooo
i think you’ll find he said the zwinky toolbar
yeah, you’re right. changing that.
and by the way, that absurdly evil little product is care of IAC.
http://www.bene...e/ask-toolbars/
At least IAC says you are getting a toolbar on the page, you can uninstall from add/remove programs and are upfront about it- I installed a tattoo from mywebtattoo.com and couldn’t read the text, didn’t know it was a toolbar and they wouldn’t let me uninstall- that was shady as all can be.
Question: Why is the Zwinky toolbar an “absurdly evil little” product?
I have been in the software industry a long time and as far as I can tell Zwinky is as compliant as they come. You can uninstall the toolbar in the menu button. If you do go to the Add/Remove page it is clearly visible and easy to uninstall. Both Mark and Michael are clearly mistaken.
I am concerned that Michael has an audience and is now able to attack as he wishes without doing any due diligence.
Michael… before you make claims that a product is an “absurdly evil little product” do some journalistic research.
PS- Hats off on the story. Much needed. That was my only concern.
http://www.anti...ils.php?ID=1409
Yeah and it says the danger level is nothing- have you tried to uninstall it? yeah it’s annoying but I knew what I was getting when I wanted those stoopid cards all I had to do was click uninstall. Seems pretty simple to me…
“The Zwinky Toolbar is component of the Zwinky online site that allows users to build online profiles. This adware is bundled with several other AskJeeves applications that track browsing activities via cookies and perform updates without notifying the end user. ”
…and users can’t remove it without taking huge steps to do so.
Zwinky is spyware – not the worst of it’s kind by a long way but spyware none the less.
And yet look at all the cpa networks promoting the zwinky ‘offer’:
http://www.find...p;search=zwinky
Ethics? What ethics? Not in the cpa/performance marketing industry anyway, it’s all about the money….
Sounds like the right time for a new subject. What do you think of the Leapfish story, Michael?
it’s Droid time, baby!
Ah, very true! We’re a bit in denial on this side of the Pond…(UK)
WAIT.
Whats with the investors? Any comments, statements from Investors here Michael?
They do their ‘due diligence’ when it is all about future revenue expectations. But by ‘consumer protection’ they missed by a big margin.
It reminds me about Plaxo, when everyone got an email to join bc they accessed my contacts list. The only one who really wrote about that ’shady customer acquisition scheme’ was Michael Arrington. And as Investor I would have been ashamed to have backed up a company who does everything pushing the stats.
MA, next story: FB knew about this all along.
And that was why FB never bought the app companies, even though every1 knew they had a positive cash flow.
When I was making a facebook poker odds calculator app at the start of the year I was looking at advertising options for my app.
It was against fb’s terms to have poker affiliate advertising on the app, it was very clearly laid out, yet Zynga’s texas holdem app had poker affiliate advertising. How was this allowed? And how long had it been going on for? I mean it was one of the biggest apps out with something like 6million users at that time… I wanted an even playing field, so i used the report function to report a violation of terms but nothing happened.
So after 3 weeks I started a thread on the developer’s blog and eventually Zynga (either forced or voluntarily) pulled those affiliate ads from their app. However this was going on for goodness knows how long prior and im sure Zynga made a lot of affiliate commissions in that time and to this day of those players. Good thing here though is at least this wasn’t scammy like everything else thats being uncovered, only against fb’s t&c.
May I add another note to this “scam practices” discussion… albeit a irrelevant to Zynga’s practices per se… Did you know that back in the day (first year of FB open API platform), there were advertising networks which also had app development houses so that if an app (say, a quiz) was doing really well, they’d clone the same app in-house and launch the app so that they could also join in the pageviews race. This has largely been an issue not discussed before.
I’m not saying that having an inhouse development/production team isn’t ok but oftentimes they were cloning their own client’s apps (i.e. An app that wants to grow decides to get off the ground by advertising on these networks. The networks notice the great idea behind the app, and clones it).
All it takes is for one of the insiders to blow the whistle on this.
well all zynga’s apps are copies of popular apps… the “app economy” is just a scam system…
Also hi5 and tagged are using the same scams.
Good article and what a shame that Mark has all this to say to founders of young startups and students at Berkley. Immoral and totally incorrect!
Last week I had an epic struggle to remove Zwinky toolbar from the desktop. It wasn’t fun.
I did some research to find out the parent company which published this plugin and was surprised by the result
– http://www.iac....usinesses/Vimeo
For me, this was disturbing to see this at many levels.
First, this speech happened at an educational institution. Students there are looking for advice that they can put to use. This is definitely not an advice they should take it to heart. I am sure everyone knows that. I do wish someone out there challenged it.
Second, to know that company was founded by a reputed VC firm who would have known about the way revenues were generated. So it is almost an endorsement that any kind of revenues is OK. Winning at any cost is what matters.
I can go on but so many others above have already have said some of the things I wanted to say.
Lastly, I have to say that this may prove that the following equation may not be valid all the time
|PR| = PR
I am sure Mark would not have wanted this kind of PR exposure.
Best,
Rajesh
I disagree, it just reinforces that they are the leaders , they can set standards that others will follow – and all the others are irrelevant cause they are not important enough to take pot shots at.
same goes for slide inc. and rockyou ads, although they were pure spammers, not scammers
Mike,
I suspect that the “Risk” section of any IPO document for ZYNGA (& other SocGaming co’s); OfferPal (& other SocPayments/Offers co’s) and Facebook (& other SocNet co’s) will read like the IPO docs of online gambling co’s that have gone public since 2004 (i.e. 5-20 pages long & investor beware!).
Aside: What amazes me is that the US authorities allow this type of doggy business practice to continue, unregulated without intervention, and do not permit online poker within a highly regulated environment.
Additionally, as a lawyer, do you agree with my view that there are potential class action issues that will be lurking over these companies going forward?
Seems like your epic efforts over the past week may have pushed back any IPO plans these co’s may have had – bad for them, but broadly benefits “social” users (all of us).
Overall, good job. I think you will be remembered for this one. Good on you. Keep it up.
If I were king, all perpetrators would be drawn and quartered on national television
Good think the US was built on such practices. All hail the robber barons!
if these scams are illegal, then would that mean what this guy does is also illegal since he’s simply getting people to fall for them and taking a cut of the profits? (it’s a CPA model so he only gets his cut when the person has been successfully scammed)
Would consumers who have been taken in by one of his scams and lost money in the past be able to sue Zynga? (sounds like they have a large pot of cash so perhaps it’s worth someone giving it a go!)
HEY LOL! MAYB WE CAN HAZ MONEY LOL! ANY1 TRY 2 SUE THEM PLZ? LOL
Sorry, it sounds a bit pathetic.
I guess there’s perhaps some legal loophole which Zynga/Offerpal etc are using by only taking a cut of the profits but not directly defrauding people themselves.
But I certainly don’t think it’s as dumb a suggestion as you think… this isn’t small-time fraud; it’s on an absolutely massive scale – and people are genuinely being conned out of a lot of money.
These are the kind of ‘entrepreneurs’ who should not be allowed to continue in business. They will do anything to make money, no matter what impact it has on people. The guy is bragging about forcing toolbars on people that can’t be removed.
All this debate is around the scams, but isn’t Zynga also ripping off other people’s games? Farmville is identical to Farmtown which I think came first. So similar that it is remarkable. Doesn’t even attempt to look any different.
Never seen anything quite at brazen, unless there’s some part of this I’m missing.
Yes Farmtown did come first and Farmville is a complete and absolute rip off. Also Mafia Wars is an exact duplicate of Mob Wars (which they were sued for and had to settle), Cafe World is an exact rip off of Playfish’s Restaurant City, and all the games they built their company off of in the old days were brazen rip offs of classic games like risk and battleship.
to think that zynga is expected to go IPO is unthinkable. these people are the worst spammers and all their apps are copycats. no value here, just revenue
it’s also good to point out the good things in this small industry. playfish is i think the primary example of a game company that focuses solely on quality and good user experience.
facebook is also to blame here. facebook purposely made it extremely easy to spam users to lure more developers, and that’s where things started to go bad. First was all the gifting apps which forced you to invite 30 friends before using them, then abusive apps etc. it took years for some quality apps to spring up.
facebook is currently planning to kill their platform virality, presumably to focus on Connect, so these social games are going to be hit hard.
The timing is perfect for TC. Not so perfect for Pincus. But since he controls the board, he wont suffer like Anu.
Where is Industry Standard when we need them?
Ugh, it’s not like Zynga’s games are even any fun! They just clutter up my FB stream with cows and job requests and all kinds of rubbish. Can’t say I look up to this guy, unlike other internet CEOs – Michael Hansen of DubLi’s an example of how a web CEO should conduct himself, imho.
Keep going at Pincus/Zynga. All these scam Ad companies think that saying sorry and changing after being caught and exposed is enough. Pleading guilty after there is enough evidence to convict is hollow in my opinion, and really empathises there lack of morals. After all, if they had any they would have changed without the need of naming and shaming
Would love to see VC Fred Wilson give his 5 cents.
My question to Fred is as follows.
Knowing what you know today would you still have invested in Zynga?
The video is shocking and knowing 30%+ of your revenues are coming from shady conversions.
That is a great point. As much as I love AVC/Fred Wilson, I also remember him getting rid of his Apple shares due to what he believed were unethical practices by Jobs & Co (quote: “if you lie down with dogs, you’ll come up with fleas). I wonder how he processes this one.
Side comment: Michael, great work across board on this story. We tend to default as an industry to fawning over the industry stars, and no ifs, ands or buts, Pincus is a GREAT entrepreneur, but the behavior reeks, certainly not something you would share with your kids, parents, grandparents. As such, it’s great to see TC REALLY shine a light on truly unethical behavior.
At some point, our culture needs to celebrate winning ethically, as opposed to the ends simply justifying the means. All one has to do is look at the crater in our Economy, Wall Street and Washington to know that what you sow is what you reap.
Cheers,
Mark
–
Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
(http://bit.ly/tjd3)
i’ve known Mark Pincus for 15 years and have invested in every one of his companies. some have been very successful and some have been failures. he is a great person and a great entrepreneur.
anyone who knows Mark well will look at that video differently. that’s how Mark talks. he is colorful and he is adamantly pro-entrepreneur and anti VC. he’s had his companies taken away from him by VCs. he’s basically seen it all and he tells it like it is in colorful and quotable language.
Everyone who is “shocked” at this video ought to watch his recent startup school talk first and then go back and watch this video in that context. Mark was not talking about “scammy” stuff which is Arrington’s cause of the moment, he was talking about how you keep control of your company and control your destiny. he used some colorful examples and i am sure he wishes he hadn’t, but that’s Mark. that’s how he’ll always be and that is one of the many things i love about the guy.
and to your point about knowing what i know today, would I have invested in Zynga, the answer is “hell yes”. don’t come to conclusions based on one post in a tech tabloid. do your homework and figure out what is really going on in this company.
fred
Bravo.
Sure he touched upon doing scammy stuff (e.g. the toolbar that he could not uninstall). You think he is going to go blow by blow in detail about ALL the scammy stuff he did in public? The fact that he seemed so cavalier about using scammy methods to make money is the issue. You can try to spin it as “Mark just being Mark” but then you make money off of him “just being Mark” eh?
Then you are just as crooked as he is. How many people have you trampled to get your money?
Fred Wilson says ‘knowing what i know today, would I have invested in Zynga, the answer is “hell yes”.’
That’s because he knew it then too. He’s too good a businessman not to have dug through Zynga to see what it does. He didn’t give a damn then and doesn’t now.
VCs make a living screwing entrepreneurs. Do you think they care about second-order screwing of ordinary people? Immoral is no problem at all. Illegal is a problem only if there’s a chance of getting caught. All part of the “risk profile.”
If you want morals, look to another industry.
Are there any estimates as to how much of their profit came from scams, advertising, or sale of virtual goods? Obviously any amount of intentional scamming is unacceptable, but I’m sure some entrepreneurs would like to know just how profitable it really is to be selling imaginary poker chips and wheelbarrows.
Awesome. And now he claims to be legit?
F him and Zynga. People like him can not be trusted to do the right thing, ever. Next time Zynga runs into revenue problems, he’ll be right back to the same unethical, semi-legal bulls***.
I’m uninstalling every single Zynga game from my iPhone tonight.
I’ve just blocked their apps on facebook, anyone got a list of what other games they run on there ?
So, now that they’ve been exposed, what are their real revenues? Anyone know? Is Zynga doomed? btw, Mikey, great to have you back actively posting on TC again.
Is there some saying about “behind every fortune is a crime” or some other unethical thing?
Pincus is a scam artist, and has been since the beginning. He’s a great salesman,and a good start up guy, but represents the very worst that silicon valley has to offer. It also shows how people in the Valley and who cover the Valley get sucked into the hype surrounding prized angels. Pincus has build a house of cards by scamming and arbitraging Facebook. Good Job Tech Crunch for exposing this pretender.
how many companies has mark started and what has become of them….tribe.net was a total joke that he tried to rip from someone else and the stupid m and a guys at kisco aka cisco got into buying….what the hell was support.com and freeloader…are all these three firms still around…what was kpcb.com thinking when they put money into a scam such as mark….yes, the other mark.
lance
http://www.kpcb...portfolio.php?z
Why stop at with social gaming? Why not take this battle to major web sites, like CNBC.COM that seems to be only running IQ quiz like apps for their ads..
Even Microsoft run these scammy ads – they nearly brought gator when that was the tool of fast buck merchants – now, nearly all the major networks have adverts for acai berry – together with images of discoloured teeth and post-pregnant women that ‘magically’ get their figure back after drinking it – I heard eating the after birth is much more effective than acai berry…
I applaud TechCrunch for bringing this all to light but have to ask why now? This story has been there for the telling for at least a year in the social gaming space. Nasty leadgen and continuity programs are all around us on and offline and have been for YEARS.
Now that Zynga is on top, exposing them will do very little. Witness the speed and ease with which they abandoned their former scummy tactics when caught. They’ve got the cash and the momentum now, it is easy for them to come to Jesus, take the high road, and become a born again ethical business.
The lesson here for entrepreneurs is just as Pincus says – do whatever it takes in the short term and ask forgiveness later. Even TechCrunch will forgive you if you “take a leadership position” when you’re caught.
Good points, and that is one lesson for entrepreneurs. But entrepreneurs have got to ask themselves: “What do I really want?”. TONS of money? Or a little money and self-satisfaction? This is a serious question, not rhetorical. What do you want? Really want.
I think you have to be a bit flexible – I must admit I have blocked the apps for a bit as a demonstration, but it is bigger than just them, so their CEO has really got to come up with something good – like getting Facebook to add a “report this app. for scam adverts” clearly visible for customers who are wary.
this is disapointing but not surprising. anyone who has dealt with mark would not find this behavior shocking at all. what is even sadder is that this weak apology somehow now gives him a pass.
instead the media and facebook should be all over zynga to get it banned from facebook and set an example. i am not just talking about the govt which may now look at this and extract a weak settlement instead fb should ban zynga and its network permanently from advertising or operating on fb. now that would clean up this stuff pretty quickly and a death penalty like that would be well deserved. mike you should be the first one calling for a zynga ban permanently just like the same way you went after offerpal.
cleaning it up now is not enough of a deterrent to others who operate this way or frankly zynga – if this is what it takes to make money in the future and it is the only avenue i am pretty sure they would go down this road again foregoing an ipo and remaining a cash machine.
this is disappointing but not surprising. anyone who has dealt with mark would not find this behavior shocking at all. what is even sadder is that this weak apology somehow now gives him a pass.
instead the media should be all over facebook to have it ban zynga and set an example. i am not just talking about the govt which may now look at this and extract a weak settlement instead fb should ban zynga and its network permanently from advertising or operating on fb. now that would clean up this stuff pretty quickly and a death penalty like that would be well deserved. mike you should be the first one calling for a zynga ban permanently just like the same way you went after offerpal.
cleaning it up now is not enough of a deterrent to others who operate this way or frankly zynga – if this is what it takes to make money in the future and it is the only avenue i am pretty sure they would go down this road again foregoing an ipo and remaining a cash machine.
TechCrunch always talks about how great these companies are without properly looking into their business models.
I always knew about these social networks and how they generate their revenues was through fishy ad schemes, (ie: FaceBook ads) This issue stems from the widely overused advertising revenue model for supporting a web companies. Because the spammers are the only one benefiting from this ad-supported frenzy.
Facebook knows there are fishy ads on their websites, but they won’t admit it. Facebook is an over-hyped piece of shit, that’s why I don’t use their spam applications.