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Today marks a year since Facebook’s rough-and-tumble IPO.

Since that disappointing day, Facebook has gone to great lengths to assure Wall Street that yes, it will one day be the social ad spinning, money-making machine that Wall Street hopes it will be.

The biggest potential, Facebook maintains, lies in what executives consider “long-term investments,”- products with grand ambitions to change the way we interact with Facebook — if not the world — on a regular basis.

Therein lies the problem. Meaningful change won’t happen soon.

Consider Facebook Home, the mobile project years in the making which aims to shift the way we interact with our mobile devices, anchoring users within the Facebook experience. The potential for success with Home, if widely adopted, could be big. More time spent inside of Facebook’s products means more ads served by default — especially when Facebook finally brings ads to Cover Feed, one of the key features of Home.

And yet by many measures, Home has stumbled hard directly out of the gate. More than half of its user reviews on Google Play are scathing. And as of last week, just over one million people have installed the product, a trifling amount compared to the 1.1 billion users on Facebook’s network.

What Facebook really wants from Home is to catch on overseas. Create a mobile-focused product to capture developing world markets — where the phone is a person’s primary computing device — and you’ve got potential to spur growth. Home, however, only runs on certain higher-end Android devices, hardware that won’t be ubiquitous or cheap in developing countries for at least a few years.

Home isn’t the only long-term bet. Look at Graph Search, Facebook’s search product rolled out earlier this year. Almost immediately came calls saying “watch out Google!” from the public. Perhaps Google’s stranglehold on the search market could be upset by a social form of discovery.

But Graph Search is possibly in an even more nascent phase than Facebook Home; Graph Search has only been rolled out to a select amount of users, and Facebook has oodles of work to do if it wants to curb the way people make Web search queries and focus them on people, places and things inside of the Facebook network.

Granted, Facebook has made serious moves in the past year to spur profitability further, releasing a slew of new ad products, revamping its gaming platform partner ecosystem and pushing, however slowly, into online retail with Facebook Gifts. It has consistently hit its numbers in the company’s quarterly earnings calls. And as the Wall Street Journal’s Evelyn Rusli wrote, the company made significant internal shifts over the past year have made more teams responsible for Facebook’s revenue.

Yet still, the needle hardly moves on Facebook’s stock ticker; it closed at around $26 per share on Friday, well below the $38 it opened at one year ago. For all of Facebook’s long-term posturing, the Street remains cautious.

“We don’t build services to make money,” CEO Mark Zuckerberg wrote in his company’s S-1 prospectus before Facebook’s NASDAQ debut. “We make money to build better services.”

Hopefully, for the sake of the shareholders, Facebook can do both.

In case you missed anything, here’s a quick roundup of the news that powered AllThingsD this week:

1. As AllThingsD‘s Kara Swisher and Peter Kafka were first to report this week, Yahoo is seriously thinking about buying hipster blogging service Tumblr. In fact, Yahoo’s board is scheduled to consider a $1.1 billion all-cash deal on Sunday.
2. Google wanted to dominate the headlines this week during the company’s annual I/O conference… just maybe not like this. By sending Microsoft a cease-and-desist, they helped promote that rival’s anti-Google campaign.
3. That little drama didn’t come up during the official proceedings of I/O, but a lot else did. Here’s a rundown of all the news Google announced in its three-and-a-half-hour opening keynote.
4. Watch this: an interview with Bill Gates, in which the Microsoft founder talks about his longtime relationship with Steve Jobs, on 60 Minutes.
5. Can productivity apps for the iPad make it as useful as a traditional work PC? Walt Mossberg puts them to the test.
6. Speaking of the iPad, the Justice Department is closing in on Apple with an e-book price fixing case… but one of the seemingly most damning pieces of evidence, a line from a letter from Steve Jobs to James Murdoch, is a little less damning in context.
7. Web video services like Amazon, HBO and Hulu all say they’re seeing significant growth. But is anyone cutting into Netflix’s lead? A new report says: Nope!
8. BlackBerry is bringing its messenger application, BBM, to iPhones and Android phones this summer. But are they too late?
9. Cisco’s earnings only barely beat analysts’ expectations this week, but that beat sent the company’s stock up 9 percent in after-hours trading. Arik Hesseldahl got CEO John Chambers on the phone to talk about where Cisco is and where it’s going.
10. And lastly, if you want more battery life out of your iPhone on the go, you may have considered a special re-juicing case. Product reviewer Lauren Goode tries the battery boosters before you buy.

To stay on top of the latest, follow AllThingsD on Twitter and Facebook, and subscribe to our daily email newsletter.

Samsung’s new Galaxy S4 handset is on track to become the company’s “bestselling” smartphone. As long as you define “bestselling” as “bestselling to carriers.”

Samsung Electronics co-CEO Shin Jong-kyun said at an industry forum in Seoul this week that S4 shipments will top 10 million in a few days. This, less than a month after the device’s debut in some 60 countries.

“We are confident that we will pass more than 10 million sales of the S4 next week,” Shin said, according to the Korea Times. “It is selling much faster than the previous model S3.”

Great news for Samsung, but news that comes with an important caveat: The company here isn’t talking about retail sales to consumers, but sales to carriers. Reached for comment, Samsung confirmed to AllThingsD that Shin was indeed referring to shipments into the channel when he offered that 10 million unit number.

Ten million handsets shipped into the channel in such a short time is still a hell of a milestone. But there’s a big difference between that and consumer sales of 10 million. The S4 may well be selling much faster than its predecessor, but not so much faster that there will be 10 million units in consumer hands next week. Some will still be sitting on carrier shelves awaiting purchase.

It’s worth noting that Samsung is not alone in reporting smartphone “sales” this way. Many companies do — including Apple. When the company posts quarterly earnings, it reports iPhone “sell in” numbers — numbers that include product it has shipped to retail partners like AT&T, Best Buy and Walmart, but not necessarily sold to end consumers. From Apple’s latest earnings statement:

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit.

Now, Apple has some 400 retail stores worldwide, and they — along with the company’s Web sites — sell a lot of iPhones directly into the hands of consumers. But they didn’t do that for every one of the 37.4 million the company sold in its recent quarter. Indeed, during Apple’s last earnings call the company said it had 11.6 million iPhones in channel inventory during the period.

Those were devices “shipped” to retail partners. But for Apple’s purposes, they were “sold.” Same story for Samsung.

Here’s a four-minute cultural litmus test: Do you have any idea who the people in this video are?

If so, you’re in YouTube’s core demo, because these guys are huge there. Their video channels have more than 44 million subscribers.

And if names like Jenna Marbles, Ryan Higa and Freddy Wong don’t mean anything to you (probably because you’re not a teenager) don’t worry – there’s an explainer at the end.

Oh, by the way – the video is a teaser for “The Social Star Awards”, which are sort of what they sound like and will be livestreaming, from Singapore, on YouTube this week. And oh yeah – the star of the clip is Jesse Heiman, who has has had barely-there parts in a gazillion TV shows and movies, as well as a memorable Super Bowl appearance with supermodel Bar Refaeli.

Here’s some late-on-a-Friday regulatory news for you: Canada’s Competition Bureau will investigate Google’s Canadian business operations, according to the Financial Post. Google confirmed the investigation, while Canada declined comment. Earlier this year, Google was largely cleared in a U.S. antitrust examination, and it is currently testing remedies in Europe.

According to sources close to the situation, the Yahoo board plans to meet Sunday night to decide whether to approve a $1.1 billion all-cash offer for New York-based blogging site Tumblr.

As AllThingsD.com first reported yesterday, Yahoo has been mulling some kind of deal with the hip New York-based blogging site, from a strategic investment to an outright acquisition. Sources said that the Silicon Valley Internet giant’s CEO Marissa Mayer has decided that buying Tumblr was going to be “the stake in the ground of what her strategy is going forward for Yahoo.”

And that is to attract younger audiences with just the kind of user-generated content Tumblr has pioneered to huge growth.

As with all big-time acquisition deals, this one could certainly fall apart at the last minute, but source said the agreement was still in place as of today. If approved by Yahoo’s board, it will be announced Monday. Yahoo has already said it has news to announce then.

According to numerous sources, Mayer started an intense focus on Tumblr about six weeks ago and determined quickly that the fast-growing content site, turbocharged by mountains of user-generated content, was just the kind of property that Yahoo needed to make it both “cool” and relevant to new audiences.

Yahoo is looking to undergird its strong set of existing media offerings to appeal to a different audience and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

Tumblr’s mobile usage has also been strong, which also interested Mayer. While Tumblr started as a desktop-based service, its mobile usage has ramped up quickly in the last few years. ComScore says that a quarter of the service’s U.S. visitors now come from mobile devices.

At this price, it will be Mayer’s biggest acquisition so far. Since she became CEO last summer, Mayer has made only a series of small acquisitions of mobile startups.

Sources said that as part of the deal, founder and CEO David Karp would continue to operate the business, with Mayer promising him a level of autonomy, despite the need to integrate closely with Yahoo too. He will be locked in, sources said, via a four-year deal that will reward him for performance of the business.

Presumably, the Tumblr brand will continue.

The deal, if consummated will be a big win for investors. In a series of fundings since 2007, Tumblr has raised $125 million so far and is now at a reported valuation of $800 million. Investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, Insight Venture Partners and the Chernin Group.

While Tumblr’s Karp has resisted various offers for the company over the years, Mayer spent a lot of time with him reassuring him of how Yahoo could turbocharge his business. He has also been searching for a COO to help him build out the infrastructure of its business, especially its advertising one.

And as Peter Kafka and I previously wrote, Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that audience is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocket ship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn and/or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards,” which has shown promise. Tumblr has said it had $13 million in revenue last year and sources said it could get to up to $100 million this year.

Tumblr has been represented by Qatalyst Partners’ Fran Quattrone, while Yahoo’s Mayer, as well as M&A head Jackie Reses and CFO Ken Goldman has been on the company’s side.

More to come, obviously.

DirecTV is weighing a potential bid for Hulu, the latest company to show interest in the six-year-old video site, according to a person familiar with the matter.

Hulu’s owners, including Walt Disney Co., News Corp., and Comcast Corp., are considering various strategic options for the site including a sale. Other firms that have bid or expressed interest in Hulu include cable operator Time Warner Cable Inc., Guggenheim Partners, Yahoo Inc. and former News Corp. president Peter Chernin’s investment group.

Read the rest of this post on the original site »

Thanks to Quartz’s Zach Seward for jogging my memory about this oldie and goodie: Tumblr’s David Karp in a video interview taped in 2007, when he was 21, had 75,000 users and was talking about stuff like Digg, Flickr … and Twitter.

Karp’s interviewer is Howard Lindzon, who’s now known as the guy behind StockTwits. Assuming that the interview was taped close to the time it was published, it would have meant that the two men were talking as Karp was raising his first funding round of $750,000, led by Union Square Ventures and Spark Capital.

No need to say anything else:

iStockphoto | dny59

Marketo, a cloud-based marketing software company, debuted on the Nasdaq today under the ticker symbol MKTO at $13 a share and closed at $23.10. Its biggest shareholder is venture capital firm InterWest Partners, whose 33.3 percent stake was worth $302 million pre-sale and is now worth north of $565 million.

Tableau Software started trading on the New York Stock Exchange under the ticker symbol DATA. Its shares were priced yesterday at $31 and closed today $50.75. Its biggest shareholder is New Enterprise Associates, which invested a combined $29 million in three rounds between 2004 and 2010 for about 37 percent of the company.

It sold two million shares at $31 in the offering, but still has 17.6 million shares remaining, making its combined gain on Tableau, by my math, worth $955.2 million. On paper that amounts to a one-day gain of 3,194 percent.

Now are you convinced the IPO market is back?

Just like a regular TV network, Amazon ordered up a bunch of pilot shows this year, and will end up making a series out of some of them.

Unlike a TV network, Amazon has asked the Internet to watch and rate its test shows, and has said the input will help the company make its decisions.

And now we’re getting to see some of those decisions play out.

We only have definitive word on one of the 14 pilots Amazon has ordered. That’s because Rhett Reese, the writer/producer behind “Zombieland“, has announced, via Twitter, that it’s not getting picked up:

Our Zombieland series will not be moving forward on Amazon.Sad for everyone involved.

— Rhett Reese (@RhettReese) May 17, 2013

Rheese wasn’t done, though. He also complained about people who didn’t like the show — presumably fans of the original movie his series was riffing on:

I’ll never understand the vehement hate the pilot received from die-hard Zombieland fans.You guys successfully hated it out of existence.

— Rhett Reese (@RhettReese) May 17, 2013

Meanwhile, over at Deadline, Nellie Andreeva reports that Amazon has picked up “Alpha House“, its Washington satire starring John Goodman, and “Betas“, a Silicon Valley sitcom.

Neither of those moves are that surprising, since Amazon has seemed bullish on Alpha House from the start, and Betas sure seems like it would hit an online viewing sweet spot.

That said, a pedigree or concept isn’t enough to keep you on screen, whether its on TV or online. Deadline also reports that Amazon is not picking up “Browsers“, a musical comedy about interns at a Huffington Post style site.

That one featured Cheers star Bebe Neuwirth as an Arianna-like boss, and was written by David Javerbaum, one the main brains behind the “The Daily Show” for many years. No dice.

Also, about the voting: Your vote counts, but it’s not the only thing that counts. Amazon Studios head Roy Price his team would look at a variety of data as they made their decisions.

For instance: I never voted on Browsers, even though Amazon sent me an email after I first watched it, asking me for my thoughts. But I’m sure that Amazon did take note of the fact that I only watched the first 5 minutes of the show, then never returned.

April was a cruel month indeed for the video game industry. Sales of gaming hardware, software and accessories in the U.S. for the month peaked at $495.2 million, according to sales data from research firm NPD, down 25 percent from the same period in 2012. Retail software sales declined 17 percent year over year to $254.3 million. Hardware sales plummeted 42 percent from the year prior to $109.5 million. The top console for the month? Microsoft’s Xbox 360, though it sold just 130,000 units in April, down 45 percent from a year earlier.

Tesla Motors Inc. just raised about $1 billion in new capital, riding a remarkable burst of investor exuberance. New Tesla shareholders will now get to see just how fast the auto business gobbles up money.

After it pays off a $452.4 million federal loan, Tesla says in a filing today, it will have $678.8 million in cash and cash equivalents, and long term debt of $600 million.

Read the rest of this post on the original site »

Game giant Electronic Arts announced Friday that Denise F. Warren, head of digital products and services at the New York Times, will join its board of directors. Warren replaces outgoing board member Greg Maffei, who sat as a director for a decade (his departure, according to EA, is due to his commitments with Liberty Media, where he is CEO). Before taking over digital products, Warren was the NYT media group’s general manager and chief advertising officer.

Most people know about the fleet of Google cars that go around filming streets.

But what about the submarines, and the tricycles and the backpacks? At Google I/O this week, the company showed off the collection of off-road gear it uses to map the places the car can’t go.

One of the latest additions to Google’s arsenal is a 42-pound backpack equipped with 15 cameras that takes a picture every 2.5 seconds as a hiker lugs it up a mountain, along a trail or through narrow streets unreachable by other means.

So far, Google has used it to map the Grand Canyon and remote areas from Brazil to the Arctic to Venice, Italy.

At I/O, Google hooked the footage taken with the backpack to three monitors connected to a treadmill. As attendees walked along the treadmill a new image would pop up for every few meters covered.

In a video interview, Steve Silverman, program manager for Google Maps talked about the effort.

[ See post to watch video ]

Changes at AOL’s local content site, Patch: CEO Jon Brod will step down and is being replaced by COO and President Steve Kalin, according to an internal memo the New York Internet company sent to the division’s employees today.

As part of the move, Brod will be going back to run AOL Ventures, in a job where he began at the company.

In addition, sources said a little less than three percent of the 1,400-employee Patch staff will be laid off. The memo notes that downsizing, which includes consolidation of several parts of the unit with Patch streamlining its regional structure from 20 to nine teams.

According to the memo, the layoffs are to “make Patch profitable in 2013 and a commitment to continue to improve our business model.”

Patch is growing, according to comScore. In April, traffic was up 26 percent since last year to 13 million unique monthly visitors, consuming about 1.3 million pieces of content that are now being served up per month.

Still, Patch has attracted a level of investor pressure and criticism, even as AOL CEO Tim Armstrong has stuck with the hyperlocal content effort and invested heavily in growing out a network of sites across the country aimed at neighborhood news and events.

But Armstrong signaled changes when he was queried about Patch during its recent quarterly call: “What you’re going to see as we approach Q4 is us trying to get to the finish line of profitability, and we will use all means possible to get there.”

Apparently, Armstrong means what he says and says what he means, at least when it comes to Path.

Here’s the memo:

Patchers,

Since the day Jon, Warren, and I founded Patch, we have had one mission in mind — improve the lives of people in local communities by 25 percent. Patch has become an important brand in the hundreds of towns we serve, and it is a staple of our communities. With the average Patch just over two years old, we are well on the way toward our goal of improving peoples’ lives and building a sustainable business in the process.

Over the past year, Patch has made an enormous impact in our communities. The coverage of the Boston Marathon bombings, the lifeline that Patch provided residents during the Sandy Hook school shootings and Superstorm Sandy, and the exclusive Sanford-Colbert Busch debate in South Carolina stand out as powerful examples. The new Patch platform that is rolling out now will only increase Patch’s ability to instantly improve communities.

As we have made a commitment to improve our Patch towns and communities, we made a similar commitment to make Patch profitable in 2013 and a commitment to continue to improve our business model. Just as we have rolled out new products and services to Patch, we are announcing today the rollout of the recently tested town structures, which will help us serve communities in a more local way and move Patch meaningfully toward profitability.

The changes have two main goals:

1. Improve and increase our hyper-local programming and deepen our user engagement through the Patch 2.0 platform; and
2. Implement a structure that unlocks the path to profitability.

To accomplish these goals we are taking the following steps, effective immediately:

We are combining the East, Central and West editorial zones to create a simpler structure that will enable faster decision-making and a more coordinated editorial effort across Patch. Anthony Duignan-Cabrera has been promoted to VP, Editorial Director, overseeing day-to-day editorial field operations, and will continue to report into Rachel in her role as Chief Content Officer.

We are streamlining our regional editorial structure across the country by moving from 20 to nine teams. We are not reducing our number of sites or our coverage area as a result of this change.

We are promoting Katie O’Connor to Director of Editorial Operations and Content Strategy. In this role, she will work with our editorial teams to help create new content and programming.

We are implementing a “team approach” for our sites, based on the success of our field tests earlier this year. This approach allows for flexibility based on the unique needs of each community and the strengths of editors.

Jon and I have decided to elevate Steve Kalin to the CEO position at Patch. Steve has done a fantastic job since he began at Patch in December as President and COO. Jon and I hired Steve with the thought that his extensive background in scaled, local platforms would eventually allow him to run Patch on a day-to-day basis.

Jon has led Patch since it was just an idea and helped scale it into one of the most significant brands in local communities in the U.S. Under his guidance, Patch has gained tens of millions of users and more than ten thousand advertisers; and it has covered millions of local stories. Going forward, Jon will return to AOL Ventures full-time and lead our push into several areas we have identified as significant future growth opportunities for AOL.

The changes we are making at Patch, however, come with the difficult decision to eliminate some positions. These employees have contributed greatly to Patch’s business with passion and dedication. We sincerely thank them for all they have done to make Patch what it is today. Their impact will always be felt here. We wish all affected employees continued success. They are truly Patchers for life.

This is an important time for Patch. We have many great opportunities in front of us, and we continue to make decisions to ensure Patch’s success. AOL’s Board of Directors and I remain firmly supportive of Patch and our mission. Together we are building a company for the long term, one that can grow and thrive — now and far into the future.

We will be having team calls today and a Patch All-Company call this afternoon at 6pm ET, to discuss these changes in more detail. I encourage you to join these calls. Keep an eye out for invitations to follow.

I want to thank you for your continued commitment to Patch and to serving your communities, and for staying focused on our goals. Patch is one of the fastest growing sites and brands on the Internet. We have the right plan, we have a great team, and I’m confident we can win together.

Keep going — TA

If you’ve never heard of Animoca, it’s probably because — like nearly every company in the mobile games industry — the Hong Kong-based studio has never had a huge hit on the scale of Temple Run or Candy Crush Saga.

And Animoca couldn’t be happier about that.

Co-founder Yat Siu calls them “fast food apps.” The 150-person company, a conglomerate of 12 smaller studios, has developed and published more than 350 apps, he said, currently at the rate of about four every week. Its goal is to one day crank out a new app every day as it expands its reach further into Asia and beyond.

Siu, who is also the CEO of Animoca’s parent company, Outblaze Ventures, said as much in a recent interview with AllThingsD. But he also had a lot more to say about the advantages of working outside of Silicon Valley, the maturation of Google’s Android ecosystem and why quantity is sometimes better than quality.

AllThingsD: What’s the difference between being based in Hong Kong vs. being based in Silicon Valley?

Yat Siu: In terms of our [Android] ecosystem, it is the dominant marketplace, whereas in the Valley, there’s a lot of focus on Apple. We don’t have that much venture capital available to us, so we have to focus on profitability and the bottom line very, very quickly. Our games aren’t are all profitable, but our business is. And we’re just a small island city, so we do not have a domestic market. It’s go global or die.

How do your games fare in different regions?

When we first started [in 2011], the U.S. was our biggest market, but just because it had a larger ecosystem. That’s changing today. North America as a continent is now in second place to Asia because Japan and Korea are driving a lot of the revenues. … The people who are buying iPhones or Android phones in the U.S. today are not the first movers, whereas in Asia, a lot of the marketplace still has way under 50 percent smartphone penetration rates. In Japan, at the start of this year, it was under 30 percent.

Is Android fragmentation a problem for you? Putting most of your eggs in that basket means you’re dealing with phones that range from the very low end to the very high end, right?

Two years ago, we had a testing rack of 600 devices. Now, Samsung is outselling basically everyone else, except in China and Japan. The second thing that’s different now is that “low end” is no longer really “low end.” You used to have really poor devices with poor resolution and processing power. Even the so-called “cheap” devices that are sold in China today are quad-core or dual-core devices; they just cost $100 is all. And they’re all standardizing around Jelly Bean [the most recent version of the Android OS]. The whole Android philosophy was, “Here, take the operating system. Do what you want. Good luck!” We had weird memory issues because people would be coding stuff on top. Now, with Jelly Bean, most of the stuff that’s going on in the operating system is going on in the application side.

Pretty Pet Salon is one of the more popular games Animoca has published, and started a “Pretty Pet” franchise.

Tell me about your games and how they perform. How do you evaluate success?

We look at every product as a gateway to another product. The key driver is popularity. Monetization will come, we think, once people are in there, but the ability to cross-promote to other games becomes important. We want to make sure that the user always has at least a few of our games to play, because we don’t believe that there is such a thing as a person who can play a game for years and years and years. It’s “fast-food apps.” People just want to consume quickly, move quickly and go on to the next thing. It doesn’t mean that they won’t come back to it, but they’re not prepared to invest console-style, sitting down and playing for four hours.

And plus, if you spent $60 on a game, you’re probably going to invest a lot more time than if you spent nothing or spent 99 cents.

That’s true, too, definitely. But also, with mobile, whether it’s in trains or one-handed game time, sometimes it’s just when you’re lying in bed, the behavior that we’re seeing now is that a person is playing a game, and then after five minutes, he wants to move on to another game. He’s not necessarily playing the same game for an hour. He’s like, “I feel like something else.” It’s no different than people switching TV channels every once in a while, except they’re switching games.

So it’s not as much of a “hits-driven” business for you as it might be for others?

It’s all relative. What is a hit? Because it’s a global audience, a niche segment is pretty large. And yet, if you have a five million-user niche, is that a hit? It’s probably a hit for an indie studio, but it’s not a hit for us because of the scale we operate in. Typically, we call anything a hit if it has over 15 million downloads, but as a franchise, as a series. We might have one app, and then if it does well and has a few million downloads and reasonable revenues, then we put sequels and additions on top of it. Out of the series, we may wind up having something like 20 or 25 apps.

For those games that aren’t sequels to existing games, how do your studios come up with new things to publish?

We have studios that are as small as six people. The producer is empowered to have his own budget and his own creative vision. There’s a weekly meeting where all the producers come together and talk about what they’re doing, and then go off and do their own thing. The advantage for the business is, if you start off with a studio of six people and it bombs, who cares? It’s not great for them, but the business can afford to do it. If they do well, they have a platform.

The independence of our studio is also attractive to our staff. They have the chance to be a startup without the startup risk. They don’t have to worry about payroll or finance, they can focus on the product and build their own team. The additional unintended advantage is that, in Hong Kong, we’re unique. So, if you want to do games and you want to publish your games, then frankly, there’s nowhere else to go. People come to us because the other option is banking or finance — which is a good career, just not if you don’t like it. If we were in the Valley, we might end up getting slaughtered by the amount of recruitment and loss of staff. Who knows?

But it’s worth noting that you do also maintain an office here in San Francisco for non-game development roles like partnerships and PR.

In the past, the meccas of the global gaming space used to be different. They used to be Sony, Nintendo, and at one point Sega. But it was never centered around Silicon Valley. That changed with the smartphone. Now the new mecca is the Bay Area because Google Play is here and Apple is here. We have an office here because we have to pay homage to the new temples. Even though we’re not in the Valley, it’s absolutely required for us to go in. Every other app company that’s international that wants to succeed must do the same.

Almost all of your revenue, about 95 percent, comes from in-app purchases. Are you looking at other business models?

Advertising will come, but it is not dominant yet. Primarily, the buyers for that now are other app companies, and we’ve got our own network. If we focus more on our cross-promotion, we get more out of that than necessarily opening up inventory to everyone else. Right now, ads are generally low quality, and they’re also spammy, so it’s a bad user experience. But that will change. The experience is there already — think about how much time you’re spending on mobile vs. PC — but [ads] have to deliver value to the user. Facebook has the right idea. People who like casual games, you should really only show them other casual games. Today, the targeting doesn’t exist.

What does your conversion rate of non-paying to paying players look like? The typical curve has a lot of people at the bottom paying nothing or almost nothing, then a long tail with a bump at the end, composed of a small number of players who pay a lot.

That is the hardcore type of model, where basically you have a very low conversion rate, something like 2 percent, and a very high consumable model where people can spend thousands of dollars. That’s not our model. If you look at games like Pretty Pet Salon, you’d be hard-pressed to spend more than 20 bucks, just because of the gameplay. We are expecting to have more volume of titles with a larger frequency of players coming in from outside. So, for instance, Pretty Pet Salon has an 8 percent conversion rate. Now, when we start working with Forgame [Animoca recently accepted a "strategic minority investment" from the Chinese hardcore game maker], that is different. We will listen to their suggestions, and it does appear that that will be the strategy because people are prepared to spend that kind of money. It’ll be a learning experience for us.

Here’s an interesting development in the ongoing data-privacy imbroglio over at Bloomberg LP. The company just named former IBM CEO Sam Palmisano as an independent adviser with the task of reviewing and recommending changes on privacy and data policies.

The move is meant to regain the trust of Bloomberg’s terminal clients, like J.P. Morgan and Goldman Sachs. They’re understandably perturbed by revelations that reporters at Bloomberg News used a function that tracks how recently a client has logged in as a way of generating story leads about personnel changes.

Palmisano, Bloomberg said in a statement, will “immediately undertake a review of the company’s current practices and policies for client data and end user information, including a review of access issues recently raised by the company’s clients.” He’ll report directly to the company’s board of directors. Helping him will be the Hogan Lovells law firm and the Promontory Financial Group.

One wonders if part of the job will be to conduct a full audit of how many reporters used the controversial “Z-function” to view client activity, how often it was used, and what the result was, specifically if its use led to stories that were published. As I wrote earlier this week, that data probably exists, because Bloomberg has always been a big data company with a knack for keeping track of what its reporters do. And if there is an audit, will its results be publicly disclosed?

The function in question showed two bits of data that have made Bloomberg clients — essentially the who’s who of Wall Street and the financial industry in general — a little queasy. First, it reveals the last time a person logged in to his or her terminal. Reporters would sometimes use that to start asking questions about whether or not someone had left a given firm, and if they had, write a story about it.

The other thing it was said to show is how often a client used a given function, though not in such granular detail that you could see what stocks or bonds were being researched. But again, it’s the sort of thing that might lead to questions that wouldn’t otherwise be asked, and eventually to stories that wouldn’t otherwise have been written.

Bloomberg also named its editor at large, Clark Hoyt, a former public editor at the New York Times, to review the relationship between Bloomberg’s commercial operations and its news operations.

(Of course, in the interest of full disclosure, I should remind you that for about a year during 2009-2010, I was an employee of Bloomberg News after the company bought BusinessWeek magazine from the McGraw-Hill Companies and relaunched it as Bloomberg Businessweek.)

Just a couple years ago, nobody thought much about wearing computers on their faces. But soon there will be actual differentiation among the competition: Google Glass offers an interface for searching and taking photos without pulling out a smartphone; Oculus Rift is much more immersive, blocking out reality to allow users to see themselves inside a game; Recon Instruments makes goggles (and coming soon, sunglasses) to help skiers and bikers track their activities.

For now, there’s no reason to worry about surreptitious Meta usage in bars and locker rooms.

The latest is Meta, an immersive 3-D headset layered on top of the real world. Meta wearers can interact with virtual games, architectural renderings and other 3-D objects by using their hands. The device captures gestures with an outward-facing camera (similar to Kinect or Leap Motion).

Meta launches on Kickstarter today, and is also announcing that it will be participating in the next Y Combinator batch out in Mountain View, Calif. Backers who commit $750 will be promised an early version to be shipped in September of this year.

Meta is a young company developed primarily by a Columbia University undergrad student and his adviser, with 12 more employees recently hired. But it already has a software partnership with widely used 3-D game-engine maker Unity Technology, and a hardware partnership with Epson, and it aims to get devices to buyers this year.

Meta will support the popular Unity 3-D software, so other developers will be able to build applications in an environment where they’re already comfortable. A developer kit is available today.

A Meta rendering shows a wearer adjusting 3-D landscaping in front of a virtual building.

If Google Glass brings your phone to your face, Meta aims to bring the computing power of a PC to your face, said Meta founder and CEO Meron Gribetz. “Before you can have the phone, you should have the PC,” he argued.

The “meta1” is not pretty; it definitely looks like a camera mounted to giant wraparound stereoscopic glasses. But it does seem like it’s at least close to working. Yesterday, I briefly tried a demo version that was tethered to Gribetz’s laptop, and there seemed to be minimal latency between me wiggling my fingers and moving my hands farther and closer to interact with the virtual spaceships and hovering balls I was seeing.

Gribetz said he is launching the Kickstarter campaign primarily to build awareness of the device, so he set his goal at a relatively low $100,000 in order to sell a few hundred or a thousand of them.

For weeks, Anne-Marie Baiynd kept a close eye on shares of Tesla Motors Inc.

On May 9, a day after the company posted its first-ever quarterly profit, the stock exploded higher in heavy trading. Ms. Baiynd, a full-time short-term trader since 2006, pounced. From her home office in Charlotte, N.C., the 48-year-old says she scooped up shares at $67.15 and sold them on Monday for a 31 percent gain.

The very next day, Ms. Baiynd changed tack, she says, successfully betting Tesla would head lower on a day when the shares finished down 14 percent from their intraday high.

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The U.S. Department of Defense has officially approved Apple’s iPhones and iPads for use on its networks, as expected. In an announcement issued Friday morning, the agency said it has certified iOS devices running iOS 6, granting them the same security approvals it issued to BlackBerry and Samsung last week. A crucial endorsement, and one that should open the door to lucrative contracts from customers in highly regulated industries like health care and finance.