SiliconBeat

Facebook has topped Google’s Orkut to become the top social network in Brazil, the world’s fifth largest country and Internet market, comScore will announce later today. That’s a huge win for Facebook, because Brazil for years has been a stronghold of Google’s Orkut social network.

The switch reflects Facebook’s rapid growth in much of the developing world, particularly in South America and Asia, countries that are now providing the lion’s share of Facebook’s growth, with membership approaching the saturation point in countries like the U.S. and Britain.

Here’s my story on that topic:  http://www.mercurynews.com/business/ci_19723521

comScores said that in December 2011, Facebook.com attracted 36.1 million visitors, a 192 percent jump in traffic over the previous  twelve months, meaning it passed Orkut, even though  – to surpass Orkut as the leading social networking destination in the market.

In an early view of the release later today, comScore said:

“Facebook’s rapid ascent in the Brazilian market has certainly been one of the most interesting stories to develop during the course of 2011,” said Alex Banks, comScore managing director for Brazil. “Brazil has always been a particularly social market and currently owns the fifth largest social networking population in the world. But despite the cultural affinity for social media, Facebook adoption had traditionally lagged in the market. That has all changed in the past year, during which the site has tripled in audience size as engagement has grown sevenfold to assume the leadership position in the market.”

- Mike Swift

Zynga released its latest quarterly earnings number in an updated prospectus. Dean Takahashi at VentureBeat has a good overview of the numbers:

“Zynga reported net income of $12.5 million in the third quarter ended Sept. 30, down 54 percent from $27 million a year ago, according to anupdated S1 filing with the Securities and Exchange Commission. The performance isn’t stellar, but it’s not so bad as to suggest Zynga’s planned initial public offering is in trouble.

Revenue was $307 million in the quarter, up 80 percent from $170.6 million a year ago. In other words, Zynga is working harder for the profits it gets by generating a lot more revenue compared to the past.

In the second quarter, Zynga reported only $1.4 million in profits on $280 million in revenue, so the third quarter report is an improvement on a quarter-to-quarter basis.”

What’s interesting are the user metrics. From the filing:

“According to AppData, as of September 30, 2011, we had the largest player audience on Facebook, with more MAUs on Facebook than the next eight social game developers combined.”

In the previous filing, Zynga had as many users as the next 15 developers combined as of June 30.

Also:

“Our players are also more engaged, with our games being played by more than 58 million average daily active users, or DAUs, worldwide as of September 30, 2011.”

That’s down from 60 million at the end of June. And the quarter included the release of two new games: Empires & Allies and Adventure World. Also, monthly average users fell from 232 million to 230 million in the quarter.

Finally:

“According to AppData, as of September 30, 2011, our games were played by more DAUs than the next 14 social game developers combined.”

That number is down from 30 at the end of June.

So, as Takahashi notes:

“Zynga is working harder for the profits it gets by generating a lot more revenue compared to the past.”

The good news, as Zynga prepare for an IPO in the next few weeks, is that it’s coaxing more revenue out of fewer players. And Zynga has a big pipeline of games coming. That includes CastleVille, which will launch in the next couple of weeks.

The CastleVille release is the latest in Zynga’s “Ville” franchise that includes FarmVille and CityVille.

“This is really built on the shoulders of the games that came before it,” said Bill Jackson, the Zynga creative director who led a team based in Dallas that built the game.  ”It’s built on the shoulders of giants.”

Jackson was giving me a preview of the games a few days ago. And the quality is indeed impressive.

CastleVille is set in Medieval times and has many elements that will be familiar to Zynga players. In this case, the goal is to build the castle of your dreams by engaging in a series of quests. A preview of the game demonstrated how Zynga continues to push the edge in terms of graphics as well as music, which includes the use of a full symphony to create the soundtrack.

Where the game pushes into new territory is in its expanded use of narrative. There is a story at the heart of it that players can choose how they follow, rather than having quests or goals dictated to them as in previous games.

At its heart, CastleVille remains a social game, but it also shows how Zynga is moving toward creating massively multiplayer experiences. The question now is whether the rising production values and the evolving game experience will draw new players as well as longtime Zynga fans.

On the New York Times DealBook blog this week my latest column about the questions still unanswered in the Hewlett-Packard scandal was roundly criticized by Jeffrey Sonnenfeld, senior associate dean for executive programs at the Yale School of Management. I posted my response in the comments section below his post. But I thought I’d also share them here:

Jeffrey:

I find your conclusions in this instance puzzling, and can only guess that you haven’t been following the story closely and read through my column on the matter a bit too hastily. Otherwise, you wouldn’t have portrayed the column as focusing on the personal details in this matter. Here’s what I wrote:

“There are certainly other questions we’d love to know the answers to (”Did they have sex?” “Did Hurd harass her?”), but aside from their salacious value, I don’t think they would add to our understanding of this scandal.”

So you and I agree on that. But you muddled this by mashing the first half of that sentence with the first of five questions I asked:

“What was the nature of Hurd’s relationship with Fisher? The other supposed misdeeds stem from this one key issue. All sides say there was no sex and no affair. And yet HP said Hurd’s relationship with Fisher crossed a line into territory that required him to disclose it to the company. It remains unclear where the company drew that line.”

The point of my column was that the basic circumstances of what occurred remain largely unknown. That remains true a week after I wrote it. As such, I find it impossible to imagine how anyone could conclude that the board handled things “just right” or applaud them for “noteworthy courage.” Perhaps they did. But in the end, we don’t know.

If the matter was so clear cut, why was the board negotiating a new contract for Mr. Hurd after an investigation concluded there was no sexual harassment? Why was the company leaking stories to the Wall Street Journal about being surprised by his settlement with Ms. Fisher, which supposedly cut short the investigation?

Surely the decision to oust Mr. Hurd was not out of sudden fit of conscience. After all, this is the board that had endorsed the firing of more than 100,000 employees under two CEOs over the past decade. This was the board the showered Mr. Hurd with increasingly absurd amounts of pay and perks even as layoffs accelerated. Shoving the latest CEO out the door with parting gifts worth more than $40 million isn’t likely to turn around the rank and file view of the board, which by all accounts is quite dim.

And in fact, it’s likely to cloud the arrival of whoever becomes the new CEO, since the board’s judgment in such matters remains in doubt. Those doubts will not be eased when the new CEO gets a nice starting bonus north of $20 million when he or she joins. And that’s not counting the need to hire a president and new board chair since Mr. Hurd filled all three roles. This will be a hiring spree bound to cost shareholders serious money. I’m not sure how you feel HP’s strong earnings during Mr. Hurd’s final quarter factor into whether we should be pushing for more answers.

I’m glad you know all the HP executives well enough to buy HP’s spin about their “strong executive bench.” Yet good governance would also seem to dictate that any major corporation have a succession plan in place. Where was HP’s in this case? Why wasn’t a member of this solid bench ready to step into the CEO role on a permanent basis?

Given the millions that will be spent on hiring bonuses and severance, this is a matter in which shareholders deserve straightforward answers. I’m surprised you would not only endorse the vague stories that have been given, but suggest we stop asking questions already.

Despite, Mr. Hurd’s hazy quote on the matter, it is important to note that he has not admitted to any of things which HP has accused him of doing. His other statements included in the first-day press release indicate that he was not leaving HP of his own accord. Sources close to him who have spoken to me have indicated he did not endorse the board’s view of events, has never been told how his relationship with Ms. Fisher violated HP standards, and only learned of the additional accusations about expense reports and false payments the day his departure was announced. These sources indicated he was never shown the evidence or given a chance to refute it.

Is Mr. Hurd’s camp right? Or is the board correct? I’m not sure how you judged the differences in their stories in this case.

Clearly, with a $40 million severance package on the line, Mr. Hurd felt compelled to say something. But nowhere does his statement endorse the board’s view of events.

You ask: “What then is the moral outrage or the vital material information denied investors?” To which I would answer: If Mr. Hurd did violate policy, why pay him his severance package? If there were misdeeds, true moral courage would seem to dictate the board take a stand by firing him for cause, and withholding that money. If, that is, there was really cause. Forcing him out, and then rewarding him with millions of dollars hardly strikes me as “noteworthy courage.” It feels like the board was hoping Mr. Hurd would quietly go away, and that the ensuing PR storm would pass quickly.

After spending the morning at f8, the Facebook developers conference, I’m convinced more than ever that Facebook is about to take over the whole Web. And by the whole Web, I mean, well, all of it.

And if Google isn’t trembling over this, they ought to be. We might look back at this day as the moment when Facebook set itself on a path to eventually dwarf Google in size, power, and eventually, revenues.

Simply put, Facebook is positioning itself to become deeply embedded in almost every single website. And the way it’s structuring this platform, it places Facebook itself at the center of Web more than ever.

Here’s why I think Facebook is about to become a monster.

Read the rest of this entry »

Morgan Stanley analyst Mary Meeker, speaking at the Web 2.0 Summit, posted her slides online.

Tuesday is OneWebDay, the fourth annual celebration dedicated to broadening participation in the Web and highlighting issues related to its use. You can read more about the event at the official Web site here.

If you get a chance, try to catch one of the local events in your area. The most promising Bay Area gathering will be in Berkeley hosted by the Media Alliance and The Berkeley Center for New Media. According to the agenda: Read the rest of this entry »

After two interviews last week, Kris got got an update on one of them. It wasn’t what he was hoping for: Read the rest of this entry »

Last week this blog offered a bulletin on the runway debut of Hewlett-Packard’s latest “digital clutch,” a chic netbook marketed toward women, featuring a butterfly motif from designer Vivienne Tam. This week we have a little update on footwear.

Miguel Helft at the NYTimes was first to report this one, but we also noticed the unusual shoes that Google co-founder Sergey Brin was wearing when he popped over to NASA’s Ames Research Center, next door to Google’s Mountain View campus, for a discussion on cloud computing yesterday.

Brin, who’s been seen wearing Crocs at other company events, was sporting high-tech Vibram FiveFinger moccasins — thin-soled sports shoes with a design that fits around each toe, the way a glove fits around each finger. (Vibram’s Website promises “the same physical and visceral sensation” as going barefoot.)

Brin was wearing standard Silicon Valley khakis and a short-sleeved shirt. But the more traditionally dressed government officials who flew out from Washington to attend the event — at which Google announced plans for a dedicated “government cloud” to host software applications for public agencies — would undoubtedly have been reassured to see that Google product manager Matthew Glotzbach wore a dark business suit.