Daniel Lyons, aka the Fake Steve Jobs, ex-anonymous blogger behind The Secret Diary of Steve Jobs, has some choice words for newspapers:
Faced with their own demise, fearful of losing even more advertising, newspapers have made the huge mistake of becoming ever more timid, more cautious, more in bed with the companies they cover.
It’s the exact opposite of what they should be doing. The truth is, if newspapers want to survive they should go back to doing what they started out doing — muckraking, stirring the shit, calling bullshit.
The case in point? The New York Times.
On October 31st, TechCrunch ran a story by Michael Arrington called Scamville, The Social Gaming Ecosystem of Hell. In the article, Arrington points out that many social gaming companies, such as Zynga are making hundreds of millions of dollars on facebook or MySpace through games such as Farmville. These games are free to pay, but users are prompted to buy online currencies to enhance their gaming experience. As for those who don’t want to spend real money, they can also sign up for services in exchange for online currencies. And this is where the problem arises. Arrington gives us two examples:
Example one:
Users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription. Tatto Media is the company at the very end of the line on most mobile scams, and they flow it up through Offerpal, SuperRewards and others to the game developers.
As you can see in the image below, nothing in the offer says that the user will be billed $10/month forever for a useless service.
Example two:
Users are offered in game currency if they sign up to receive a free learning CD from Video Professor. The user is told they pay nothing except a $10 shipping charge. But the fine print, on a different page from checkout, tells them they are really getting a whole set of CDs and will be billed $189.95 unless they return them. Most users never return them because they don’t know about the extra charge. Woot. Again, sites like Offerpal and SuperRewards flow these offers through to game developers.
There’s no mention of any of these payments in the offer itself:
Here is what happens when Arrington asks Offerpal CEO at the Virtual Goods Summit to explain her business ethics:
Arrington also points his finger at the social networking sites:
There can be only one reason Facebook and MySpace turn a blind eye to user protection – they’re getting such a huge cut of revenue back from these developers in advertising. If they turn off the spigot, they hurt themselves.
Interestingly enough, on November 6th, The New York Times also ran a story on Zynga and other social gaming companies called Virtual Goods Start Bringing Real Paydays. However, Lyons points out: “they included not a single word about the scammy ads. Not. A. Fucking. Word. The piece could not have been nicer if it had been written by Zynga’s PR people themselves.”
Lyon wonders:
Now, maybe they did all the reporting before Arrington’s stuff broke. In which case they should have gone back and updated their info. Or maybe, just maybe, Zynga’s PR people teed up a Times story as a kind of rebuttal to what Arrington was reporting. Either way, that’s what ended up happening: Zynga used the Times to deflect the bad shit flying at them from Arrington. They need good press because they’re hoping to cash out by going public next year. That story in the Times will be worth millions. Many millions.
He concludes:
Um, New York Times? If you guys are still wondering why people are dropping their subscriptions and getting their news from blogs instead of you — this is why.
