There's been a complaint to the Federal Trade Commission, after all, as True/Slant's Kashmir Hill has written. Facebook altered its Privacy Policy to strip protections from data like friends lists and profile pictures. But it turns out you're not allowed to do that by fiat, you need to explicitly get permission from users, something Facebook's "transition tool" failed to do, even as it allowed users to keep other types of data private. Writes Hill, a sometime legal blogger:

In 2004, Gateway did something similar, changing its privacy policy to make it okay to sell information it had gathered for Hooked On Phonics users to third parties. It got into trouble for that. It had to revert to its old privacy policy, and pay a fine. (A little one, just $4,000.)

And then there are the private lawsuits. They're inevitable, right? Facebook is already on the hook for $9.5 million it agreed to pay to settle a class-action suit over its Beacon advertising system. The lawyer who prosecuted that case is busily milking this new legal field; he's now suing Netflix for upwards of $2.5 billion for allegedly violating its privacy policy.

Facebook's last payment of $9.5 million is not a huge dent in a company that will make more than $500 million this year. It looks like the next payout one should be bigger — or it's just a cost of doing business (as usual).

1. Hide group and page memberships

Facebook changed its formal Privacy Policy to say that "pages you are a fan of... and networks" are now totally public information (along with many other things). There's apparently no setting to shield page and network data, which leads to terrible situation like this one, sent in as a reader plea:

All of a sudden my grandmother can see that I belong to the Queer Graduate Student Union and Open Relationships Networking Group. Please help. I can't bring myself to de-friend my grandmother!

UPDATE Dec. 17: We're not sure if this is new, but this can now be changed by going, confusingly, to "Application Settings." Go to the "Settings" menu at the top right of your profile page, then select "Application Settings," then scroll down to "Groups" and select "Edit settings." Set to "Only me" (click to enlarge):

Thanks to the tipster who walked us through this. Sadly, even as one privacy mystery was resolved, we were made aware of another. See below.

2. Block Facebook activity from appearing on your wall

There used to be a setting that allowed users to prevent Facebook activity from automatically showing up on their Facebook wall, thus blocking updates like "John commented on Jane's picture," "John is now friends with Bob," "John is attending Uber Gay Circuit Party 2010," etc. This setting is apparently gone, and you have to remove such notices one at a time.

Writes one tipster:

It is extremely annoying not to mention a complete tell of how often I use Facebook during work hours:)

3. Prevent strangers from friending you

It used to be you could keep non-friends from sending you a Facebook friend requests, although they could confirm. That's not the most, well, social way to use a social network, but judging from our email, it was a frequently used and valued feature. Wrote one Gawker regular:

Before the changes I wasn't searchable on FB and hence friended only those I wanted to friend, in essence, I would initiate the request. But... I am now getting friend requests from people I don't know, or worse, from people I know but I don't want to befriend on FB...

Facebook now makes you offer the "Add friend" option to all friends of friends — you can't restrict any tighter than that, so strangers can still send you friend requests. Screenshot (click to enlarge):

4. Completely hide friends list

Your friends list, too, is considered public information. Though you can remove it from your profile, you can't keep friends of friends from seeing it. They just have to pull up one of your friends' friend list, click you name, and view your friends list.

Writes one reader: "Many of us are concerned, seeing as how there are thousands of people faced with the threat of stalkers." Another, right on cue:

I have been dealing with a deranged, threatening stalker... There is no way of keeping your Friend list private... I have been obsessively reading about this topic [overall Facebook privacy]... To say I'm outraged is an understatement.

We thought Facebook might be improving this, but we continue to receive emails like these, and Facebooks written Privacy Policy still states that friends lists are now public information.

5. Block Wall announcements that you've been tagged in a photo

You can keep photos of yourself out of the "Photos" tab on your profile, even if they've been uploaded by other people. But it seems you can't block from your Wall announcements that you've been tagged in someone else's photo , which sort of defeats the purpose: It leaves your profile as a very convenient central location for any incriminating pictures of yourself.

You can remove each notification manually, but that becomes a game of whack-a-mole.

Wrote one Facebooker:

I've already blocked everyone from viewing photos that I'm tagged in, but I'd prefer that my friends not even see that I've been tagged in the small preview photo that gets posted to my wall every time someone tags me.

UPDATE: According to a helpful tipster, this can be disabled by going to the Settings menu at the top right of your Facebook home page, then to "Application Settings," then the "Photos" application, then click "Edit settings." Then click the "Additional Permissions tab," and there is an option to "Publish to streams." Uncheck this. Like so (click to enlarge):

UPDATE: 6. Profile photo

While it's possible to restrict your profile photo album, your main profile photo is one of the pieces of personal data that was forcibly made public by Facebook when it updated its formal Privacy Policy. The best you can do is upload a fake pic, or remove your profile photo entirely; there's no way to have a profile photo that only your friends see.

And more, we're sure

We'd love to be wrong about any of these privacy rollbacks, so if you know of settings or workarounds we've overlooked, do email us at tips@gawker.com. Conversely, if we've left out a lost privacy option you feel strongly about, let us know about that, too.

Facebook CEO Mark Zuckerberg (pictured) originally said his social network's privacy changes were intended simplify and enhance the privacy experience on the site. Judging from our inbox, it would seem he's achieved neither.

Past coverage:
The Valleywag Guide to Restoring Your Privacy on Facebook, Dec. 15
Facebook's Great Betrayal, Dec. 14
Facebook CEO's Private Photos Exposed by the New 'Open' Facebook, Dec. 11

The investment firm, Russia's Digital Sky Technologies, led a broader group of investors in putting money into San Francisco-based Zynga, according to the New York Times. It's DST's second Silicon Valley conquest, following two investments in Facebook earlier this year that totaled $300 million and that allowed the social network to cash out employee equity.

Usmanov (pictured), who reportedly owns 32 percent of DST, comes with the sort of unsavory press clippings worthy of a long-survivng oligarch in anarchic, organized-crime-ridden Russia: He's been accused by a former British ambassador of being a "gangster and racketeer" and of close ties to mafia drug trafficking and, as we've reported previously, controversially tried to censor bloggers who linked to news of the accusations.

Then there was this, last year: After Usmanov bought a chunk of mobile phone operator Megafon through a holding company and from a fund called IPOC, a former Megafon shareholder said he had been physically coerced into selling his Megafon holdings to IPOC; he later disappeared from his bloodstained vacation home in Latvia.

Zynga is used to dealing in the dark fringes of the markets; it made loads of ad revenue off scammers who deceptively sold "learning CD" and SMS subscriptions to gamers trying to earn virtual currency and now faces a class action lawsuit. Now, despite all the company's talk about reforming its way back into the light, it is, in a way, going deeper into the shadows. Zynga CEO Mark Pincus once bragged about "doing every horrible thing just to get revenues right away." Let's hope, for his sake, he's not making such a recklessly calculated move now.

Ideally, we'd all be allowed to just accept Facebook's recommended settings. But the social network is defaulting most people to share their private content widely with strangers, in an obvious bid to grow traffic and to compete more directly with Twitter. Then there's the content the company is trying to take from you and make entirely public.

And, to borrow a phrase, what can't be attributed to Facebook's greed can be chalked up to ineptitude. Highly complex privacy schemes are bound to fail, as others have written, because most users don't have the patience to sit and learn intricate details of various options. That would seemingly include Facebook co-founder Zuckerberg, who initially accepted the default options, according to published reports. But he soon altered these defaults to make them more private, hiding his photos from friends of friends.

And now it's emerged in True/Slant that the CEO has also roped off his friends list and events calendar from strangers he has no friends in common with. (At least, he's removed them from his profile page; Facebook's official Privacy Policy still states that all friends lists are irrevocably public, and it's not clear whether that's been changed.)

If the CEO of Facebook is changing his default privacy settings, shouldn't you? Here are some things you can do (click any image to enlarge):

Hide your photos (as much as possible).

Most people don't seem to realize their old profile photos and albums are available to strangers The profile photos usually default to being shared widely, e.g. to "Everyone," while the photo albums are often only slightly more restricted, e.g. "Friends of Friends."

You can't hide your current profile photos, but you can hide the others that you've uploaded. (UPDATE 1: The wording of this part was updated to make it clear that you can't ever hide your main profile pic. So do, like, a picture of your cat or something. Or a building!)

From your Facebook home page, go to the Settings menu in the upper right corner, and select "Privacy Settings." Then select "Profile Information." Then scroll down to Photo Albums and click "Edit Settings"...

...and adjust to the level of privacy you are comfortable with ("Only Friends" was probably your setup before):

Hide other people's photos of you (partly)

If someone "tags" one of their Facebook photos with your profile, it can show up on your profile. If you don't want strangers (including "Friends of friends") to get to conveniently peruse these often candid shots from your profile, go to Settings/Privacy Settings, then "Profile Information" and adjust "Photos and Videos of me." We'd recommend "Only friends:"

UPDATE 1: To clarify, you can never remove pictures in which you are tagged from other people's accounts, as we implied before. But by removing them from your profile, you make it a lot harder for strangers to find pictures of you that you might not want them to see.

Hide your birthday

It's insane that Facebook recommended that many people share their birthday with "Friends of friends" in its defaults for the new "privacy" scheme. This personal information can be used by financial fraudsters to help impersonate you to your bank, credit card company, email provider and others. We'd recommend showing it to as few people as possible. Or, even better, set it to a false date.

Under Settings/Privacy Settings/Profile Information:

Hide your posts

Facebook is defaulting people to share their posts with "friends of friends," i.e. strangers. You may want to revert this to share only with your friends. Under Settings/Privacy Settings/Profile Information:

Remove your friends list from your profile page

Facebook has updated its privacy policy to say that you can never permanently hide your friends list, and last week it was impossible to hide the list from friends of friends (see Felix Salmon's second update here). This might be changing; on Monday, we couldn't find a way to view the friends list of certain "friends of friends."

In any case, it's definitely possible to make your friends list harder for strangers to view, by removing it from your profile. Go to your Facebook home page, then click on "Profile" in the top right corner to view your profile.

Then scroll down to the section of the profile that shows your friends (titled "Friends"), and click the pencil symbol in the upper left corner. This will reveal a checkbox to hide your friend list from some strangers, at least on your profile page:

UPDATE: We're getting "corrections" on this telling us exactly what we already said above, so we'll repeat it in bold: this does not completely shield your friends list. Friends of friends can reportedly still see it, for example, and as we said above Facebook considers it public information.

Hide your profile from search engines

Facebook is touchy about this one, because it's always displayed some data for search engines, by default, and suddenly people are noticing. That's why when you go to change your settings under Settings/Privacy Settings/Search, Facebook now pops up this ultra-defensive dialog:

What Facebook doesn't tell you is that it now offers a link to "View Such and Such's Friends" from the public, search-engine-indexable profile page. At least, that's what ours does. At the very least, you should look at your search engine page using the preview link under "Public Search Results" and see if you want to continue to make it available:

Hide your info from friends' apps (UPDATE 1)

This is a big one we missed the first time around — by default, your friends can share huge amounts of your personal information with applications they authorize, like quizzes and games. It would be a good idea to restrict this even if Facebook weren't sloppy about policing its apps and partners; as things stand, we'd recommend unsharing most if not all types of data from your friends' apps. (Thanks to the commenter and tipsters who sent this in.)

Go to Settings/Privacy Settings, then "Applications and Websites," then "What your friends can share about you - Edit Settings:"

Did we forget or mis-state something?

Email us and let us know; tips@gakwer.com.

UPDATE: Our other coverage of this topic:

The Facebook Privacy Settings You've Lost Forever, Dec. 16
Facebook's Great Betrayal, Dec. 14
Facebook CEO's Private Photos Exposed by the New 'Open' Facebook, Dec. 11

(Top pic: Zuckerberg, via Getty Images.)

Take Angelina Jolie, for example: Did you know the sought-after actress has just 27 Facebook friends, and they're almost all A-listers? Talk about a meticulously curated list:

Then there are the surprising affiliations. Will Smith, for example, is a member of the Facebook page "Jesus Daily," which posts bible quotes from Jesus each morning, even though the actor has made repeated donations to groups affiliated with the Church of Scientology; echoes the cult's "spiritual physics" rhetoric; has set up a middle school staffed with Scientologists; and has said Scientology is filled "brilliant and revolutionary" ideas. Smith was raised Baptist and has insisted he takes ideas from multiple religions. A look at his page (click to enlarge):

And you can send direct Facebook messages to a surprising number of celebrities, right from the "Send message" command in the upper left corner of their profiles, though it's not clear to what extent, if any, this has been affected by the new privacy framework, since some celebrities, like Tobey Maguire, still have messaging turned off. Some who have it enabled:

• Angelina Jolie
• Brad Pitt (aka Bradpitt Bp, via Angelina's profile)
  
• Orlando Bloom
  
• Tom Hanks
• Robert DeNiro
  
• Sean Connery
  
• Julia Roberts

More, we're sure, to come.

(Top pic: Jolie, giving an interview to NBC's Matt Lauer in 2008, via INF)

Under Facebook's highly suspicious new "privacy" system, users are typically encouraged to share their photos widely, a move that helps Facebook become more like its fast-growing frenemy Twitter. In what seemed like a savvy PR move, CEO Mark Zuckerberg opened his own photos to the public last night. But after we ran some of the more interesting shots, he appears to have partially yanked them back.

Friends of friends can still see the photos. But one tipster and one Gawker staffer who share no friends in common with the Facebook CEO were able to see his photo cache last night and are no longer able to as of this afternoon; the pictures are definitely now shielded from such strangers. You can check for yourself by clicking here.

It's a dumb move, PR-wise: On the one hand, Facebook' own chief executive is illustrating that his privacy settings are so baffling that even he himself doesn't grasp their full implications. And, on the other, we already published the most embarrassing stuff! Sigh.

We can't think of what else Zuckerberg is trying to shield from public view; maybe it's one of these pictures we haven't run yet, but we doubt it. Oh, and the last two aren't of Zuckerberg, but of two different flacks for the social network, Brandee Barker ("you have a choice") and Barry Schnitt ("Facebook is changing, and so is the world changing and we are going to innovate to meet user requests"). We figure, if they didn't want these candid personal shots published to the world, they would have configured their oh-so-simple privacy settings accordingly.

UPDATE: Zuckerberg has updated his wall with the following message about an hour ago:

For those wondering, I set most of my content to be open so people could see it. I set some of my content to be more private, but I didn't see a need to limit visibility of pics with my friends, family or my teddy bear :)

This is baffling, since most of the strangers who can read this wall messageabout how the CEO "didn't see a need to limit visibility of pics with my... teddy bear" now cannot see said pics, with his teddy bear.

UPDATE 2: Spokesman Schnitt tells True/Slant, "[Zuckerberg] went through the transition tool like other users, evaluated the recommendations, and ended up accepting them."

"Now girls, only the most special ladies at Facebook get this t-shirt with my face on it... remember that it is a sacred honor and if I see so much as a single wine stain on there, you're out of Zuck's Angels for good..."

"Priscilla, I swear to God, I agreed to pose for a picture and a split-second later she was somehow under my arm..."

You might call this "the Twitter shirt," accompanied by the "Twitter money" cheer.

There are thousands and thousands of reasons Brandee Barker loves being Facebook's spokeswoman.

Barry Schnitt, meanwhile, can't even afford a proper t-shirt. On the bright side, he was the only one at his brother's bachelor party in Austin, Texas with a proper cowboy hat (that's Schnitt on the far left). Maybe it was the money he saved by using those company-issued shorts.

That's because the social network has codified this new state of affairs right there into its written "Privacy Policy." A comparison of the new and old policies reveals this addition:

Certain categories of information such as your name, profile photo, list of friends and pages you are a fan of, gender, geographic region, and networks you belong to are considered publicly available to everyone, including Facebook-enhanced applications, and therefore do not have privacy settings. You can, however, limit the ability of others to find this information through search using your search privacy settings.

Facebook users have just begun to realize this is happening. Reuters' aggressive financial columnist Felix Salmon took note of this exciting new "privacy" feature when his critics on an investor website published a list of his Facebook friends, presumably for hate-mailing. Former Gawker editor Doree Shafrir blogged this morning about how her once-hidden friends, network and fan-page subscriptions have suddenly been published.

I've now set my privacy settings so that only friends can search me [and find out you're a fan of Howard Kurtz! Oy! -Ed.]…which seems sort of counterproductive to the whole enterprise, doesn't it?

Indeed it does, and it's scant protection: Shafrir's friends are still listed to strangers on her profile page, if you can find it. There's a way to turn this off, too, according to Salmon (see update to his column), but anyone who shares a friend with you will still be able to see all your friends (I'm looking at Salmon's now, and we're not friends).

Really, as gossip bloggers, we at Gawker should be happy about all this; it certainly makes it easier to hunt down people willing to confirm gossip about their acquaintances. And it's satisfying to have our conspiracy theories confirmed — and quoted by civil libertarians at the Electronic Frontier Foundation who, along with the ACLU, have raised serious objections these "privacy" changes.

But there's something maddening about watching Facebook bumble its way into another privacy debacle, one approaching in its disastrousness the launch of the Beacon advertising/stalking system a few years back. If only Facebook's investors agreed. But then they're not exactly a pack of civil liberties advocates, now are they?

(Top pic: Facebook CEO Mark Zuckerberg, by Simon Doggett)

Facebook's 350 million+ users are being greeted by the dialog below, an "Important... Privacy Announcement" that "simplifies" and "adds" privacy controls:

But like Mark Zuckerberg's "Open Letter" last week, this is just the smiley pro-"privacy" wrapper around the real agenda, which, as Peter Kafka at All Things D wrote, is quite plainly to get you to abandon your privacy. Rival startup Twitter has taught Facebook that there's big growth in public internet sharing.

Thus — Ta Da! — these new default settings, which suggest users share their posts and information with the whole world. From Kafka (click to enlarge):

Inside Facebook's Eric Eldon got similarly liberal suggestions:

To make this scheme a bit more defensible, Facebook will now allow users to set their privacy level — i.e. to reverse the default choices — on a post-by-post basis, a feature long requested by users. Thus, Facebook will become an endless series of privacy decisions and dilemmas. It's enough to make you rush into the open arms of Twitter. Because while microblogging about your lunch might be narcissistic and pointless, it's definitely less narcissistic and pointless than deciding who should get to see the post about what you had for lunch.

Facebook: Asking you questions you don't want to have to answer about content no one cares about. Isn't social networking a joy ride?

The local reviews portal uploaded a cache of party pics to Flickr, a trove duly uncovered by Nicholas Carlson over at Silicon Alley Insider. It comes complete with the requisite provocatively posed women, mostly-naked men and naughty company icon (Santa). Those are the sort of party props that have become Yelp's PR calling card, lending the company a "let the good times roll" vibe that helps keep unpaid contributors supplying the company with free content.

In fact, this particular gathering, trampy as it may have been, looks reasonably tame compared to the debaucheries of years past; our last picture in the gallery below is a compilation distilling the positively fleshy feel of parties past (also documented here, here, here, here, here and here.)

UPDATE: It should be noted that this particular party was in San Diego; San Francisco-based Yelp will no doubt throw something similar in the Bay Area if it hasn't already (we hear it hasn't, yet, this year).

"That would be a lump of coal you're feeling, young lady, for your, uh, untoward extreme naughtiness. You're a very, uh, baaad girl."

Don't you wish you'd had the chance to sign this little angel, too??

Girl on far left rocking about 8x harder than everyone else in the picture.

"I can't speak for Mr. Leprechaun here, but I'm totally looking you in the eyes, lady."

Yelp photographers can literally smell the female tongue leaving the mouth.

"So many bad girls at this party, so little time to admonish them..."

Come, now, sir, you can do several buttons better than this. Several flies, even.

Ooops, we did it again, and, what do you know, at another Yelp party.

Santa presumably has his own private collection of these "girls on my lap" shots.

Everyone looks equally buzzed/sober. Nice pacing!

History teaches us what a truly wild Yelp party looks like.

Lawless, teen-heavy MySpace used to be considered the online place for pervs — Saturday Night Live even made a funny skit about it (embedded below). No more: Numbers published in the New York Daily News reveal that Facebook is the favored destination, attracting 79 percent of the registered sex offenders who declared accounts at the big social networks, versus 51 percent for MySpace. The numbers don't add up to 100 because many offenders had accounts on both networks; see the chart we made above for a different slice, or look at the precise the numerical breakdown in the image below.

The migration of these unsavories onto Facebook was inevitabe, particularly after Facebook relaxed its requirement that its members be in college or be college alumni. People want to join the social network everyone else is joining. Sex offenders are definitely no exception.

[via Wired Epicenter]

The spring makeover, an awkward attempt to ape Twitter, overwhelmed Facebook users with excess information. Over the summer, Facebook tested a stripped-down "LIte" interface that pulled back much of the clutter. Now, there's a new design previewed in PCinpact.com that, as noted by Business Insider's Alaska Miller, consolidates the chat-and-notification-toolbar at the bottom of the current Facebook homepage with the search bar and account links at the top. In other words, continues the quest for the sort of simplicity Facebook used to have.

Before:

After (click to enlarge) (via):

(Top pic: Facebook CEO Mark Zuckerberg, by Mathieu Thouvenin)

The suit was probably inevitable. As we first reported, the Sacramento-based firm of Kershaw, Cutter & Ratinoff has been looking for victims of scammy ads in games like Mafia Wars and Farmville to potentially file a class action suit. Less than a week later, the firm's suit has hit federal district court in Northern California.

You can read the initial complaint in full here.

Neither gaming startup Zynga nor social network Facebook actually originates the advertisements in question; instead, other companies take out ads in Zynga's games, which run on Facebook's network, and the two companies make reportedly large sums of money from the offers. Some of the ads trick users into signing up for unauthorized cell phone charges or expensive mail-order products like educational CDs, typically by disguising them as "free" offers or "free trials," or as part of an "online quiz." TechCrunch has run an aggressive series of articles, cataloged at the bottom of this post.

Zynga reportedly takes in close to one-third of its revenue from "commercial offers" like those, and Facebook does well too, as KC&R lawyers point out in their complaint. An excerpt (click to enlarge):

Swift's attorneys also point to Zynga CEO Mark Pincus' damning video confession that "I did every horrible thing in the book just to get revenues" in their complaint, indicating it will be a significant piece of courtroom evidence, just as we predicted.

The prospect of being on the hook for massive damages has to make both Zynga and Facebook's investors sweat. Facebook is the darling of Silicon Valley, with VCs having valued it in the billions of dollars, while Zynga counts the elite firm of Kleiner Perkins Caufield & Byers among its major investors. Yet both companies have come to rely on greasy advertisers for much of their revenue; in addition to the game-ad scammers, Facebook is also sells ad to marketers who resort to tactics like using stolen pictures of apparent underaged girls to promote their products. If the company's are found to be liable of helping con customers by working with these sorts of slimeballs, it's hard to say where the payouts might end.

Below, an excerpt of the scams allegedly perpetrated on the lead plaintiff in the case, Rebecca Swift.

(Top pic: Facebook CEO Mark Zuckerberg, by Raphaël Labbé)

[Full court filing]

TechCrunch publisher Mike Arrington began writing his high-profile posts exposing the misleading ads carried by Zynga on October 31. Four days later, according to documents filed with the SEC yesterday, Zynga began issuing shares as part of its latest $15 million round of financing that included firms like the gold-standard Silicon Valley shop Kleiner Perkins Caufield & Byers (past investments: Google, Amazon, Netscape, etc.), as PaidContent points out.

Of course, it took until Nov. 6 for video to emerge of Zynga CEO Mark Pincus admitting that some of the ads his company ran were "horrible." But we'd venture to guess that Zynga's investors, now into the startup for at least $54 million, would still have gone forward with their investment even that video emerged earlier. They care no more about Zynga's murky origins than they did about those of Zynga's chief clients like MySpace (born from a spam and spyware operation) and Facebook (which paid $65 million to settle claims it was founded on stolen technology). In Silicon Valley, the sins of the past are regularly washed away by infinite promise of the all-important future.

(Pic: Zynga CEO Mark Pincus, by Joi Ito)

Amid withering press from TechCrunch and other outlets, the Zynga CEO has finally removed scammy commercial offers from his company's online games, like Mafia Wars and Farmville. That's nice. But maybe the whole scandal could have been avoided if he'd taken a less skeptical take on his Harvard Business School ethics class. From his 2006 blog post about the class:

The school had this bullshit 3 week class called 'ethics' which we all took together at the outset of the program - guess it was to make sure we all had at least heard the term a few times and might feel more comfortable even using it...

Pincus goes on to tell how his amoral, investment-banker classmates defended a banker who left a sick Indian man behind to die in order to finish climbing a Himalayan mountain the banker had long wanted to conquer. Pincus accused his classmates of moral bankruptcy and became a black sheep, he says.

He was also aghast when a fellow student got off with a slap on the wrist after he was caught stuffing the ballot box in an election to head the school's Finance Club. Pincus thought he would be expelled or at least suspended for a year.

I'd soo love to know where that kid's career went and what he's doing today. He must be a major leader as he soo gets our system.

Pincus ended his blog post on an optimistic, pro-ethics note, saying that "this century's newest success stories" like Google, Bill Gates and eBay "are about authentic people taking responsibility and serving all stakeholders," i.e. acting ethically, donating money to charity, etc. Despite this conclusion, Pincus soon found himself on a darker path; he was soon doing "every horrible thing in the book to... get revenues right away" at Zynga, he told fellow entrepreneurs at a mixer earlier this year.

Said mixer wasn't the first time Pincus gave up a sleazy vibe; check out the tweets below from entrepreneur and former Valleywagger Alaska Miller. Apparently Pincus' ethics were derailed some time after he wrote that "authentic people" are the bright future of American business. It's hard to know whether to the blame that stumble on Pincus' obvious cynicism toward his Harvard ethics class — or on his failure to cling to his cynical conclusions more tightly through the years.

(Top pic: Pincus, by Joi Ito)

Sacramento-based Kershaw, Cutter & Ratinoff, LLP is looking for people who faced "unauthorized charges imposed on Facebook and MySpace users who participate in social games like 'Farmville' and 'Mafia Wars.'" The firm, which said it has launched an investigation into such scams, specializes in class action suits, among other areas.

Mike Arrington's TechCrunch has posted a series of articles on the issue of sleazy revenue models for online games, exposing the practice of sneaking mobile data subscriptions and pricey "learning CD" packages past players trying to earn online "points." Mafia Wars and Farmville creator Zynga gets a third of its revenue from such "commercial offers," while Facebook in turn gets 10-20 percent of its money from Zynga, according to Arrington.

Zynga has yanked some of its ads; Facebook, in turn, has suspended one of Zynga's smaller games. But there's evidence this issue could have been addressed much sooner. TechCrunch found video (below) shot this past spring in which Zynga's CEO said he "did every horrible thing in the book to, just to get revenues right away."

That sounded bad enough when it was reprinted on a tech blog; imagine how it's going to sound in court.

(Top pic: Zynga CEO Mark Pincus, possibly calling his lawyer, by Joi Ito.)

Ocean Ave. Books proprietor Diane Goodman visited Yelp to try and get her private Yelp messages removed from a Yelp discussion forum. She had sent them to a reviewer named "Sean C.," calling him a "coward" and "pussy boy" over a review that called her shop a "TOTAL MESS." She quickly apologized for the messages, she has said, but was irked that they remained on Yelp's message boards (see Google's cache).

Last Friday, Oct. 30, after an unsuccessful phone call, Goodman obtained Yelp's SOMA address through the Better Business Bureau and went there to ask them to remove her messages. She found an office with no Yelp signage and with an apathetic staff:

After going over there and telling my sad story to a bunch of people sitting at a picnic table who were all talking about the parties and concerts they were about to attend that weekend, none of them offered to help me. I attempted to convey the seriousness of what was about to happen to me, but know[ing] I'm not a Yelp sponsor they only gave me blank looks and turned away.



I asked the security guard if I could go upstairs to talk to someone and she said No. She said I would have to leave now and I said OK peacefully and then she locked the security gate and I left.

Having gotten nowhere with Yelp, Goodman two days later tracked down Sean C. through some clues on his profile (being apparently quite good at finding "unlisted" addresses) and visited his house, sparking the violent confrontation. Sean C says Goodman tried to force his way in; Goodman has said she was initially invited in but that the reviewer freaked out and pushed her when she said she was visiting him about the Yelp review.

Goodman told us yesterday she visited the house to apologize — and perhaps to get Sean C. to remove her angry messages. "The real thing that upset me about the whole thing was that he made an irate message out of my emails and put them on Yelp," she said.

Yelp might have diffused the situation by offering Goodman more than blank stares and a cold shoulder during her visit. After all, the discussion thread Goodman wanted removed from Yelp's server was, in fact, eventually removed "as inappropriate." A five or ten minute conversation with a business owner (and potential advertiser) who had gone to the trouble of finding the company's address might have calmed Goodman down, and sped up a deletion that happened later anyway.

Look at the situation from Goodman's perspective: She's a bricks-and-mortar, face-to-face neighborhood merchant being pelted by faceless, nameless online entities (and one remote customer service rep on the phone), and no one will have an actual face to face conversation with her.

Goodman is also an aggressive business owner who has now been cited for battery, so Yelp has a ready-made excuse for not engaging with her. But our impression is that the company only likes getting face to face with the "local" market it purports to serve when it means collecting advertising money or guzzling free food and drink at one of its "Yelp Elite" bacchanals.

Speaking of which: We asked Yelp PR for comment on this incident two days ago and have yet to hear back.

(Pic: Yelp HQ, 2007, by evadedave on Flickr)

The Valley fad of social network games like Mafia Wars and Farmville disguise old-school scams, Mike Arrington has been demonstrating over at TechCrunch this weekend. High-revenue don of social networking games Zynga, which makes the aforementioned Mafia Wars and Farmville, gets one-third of its revenue from various shady "commercial offers" and lead-generation systems, Arrington reports. Here's how HotOrNot founder James Hong described the social networking cash scene in a TechCrunch comment:

The offers that monetize the best are the ones that scam/trick users.... i'm pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff.

Examples, via TechCrunch:

• "Users are offered in-game currency in exchange for filling out an IQ survey... They are told their results will be text messaged to them... 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."
  
• "Users are offered in game currency if they sign up to receive a free learning CD... 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."

There's an entire thriving "ecosystem" devoted to these sort of "deals," the sort of thing that in a different context might just be called a "crime ring." It's a profitable network, at least for the people at the top: Arrington estimates Facebook might be taking in $50 million per year from Zygna alone.

So, social networks are basically turning in to just another snakeoil sales channel in the mold of late-night 1-800 number commercials. Which sucks not only for the marks who've been duped but, ultimately, for Facebook's investors, since taking this sort of easy cash reduces internal pressure to come up with some sort of truly innovative revenue stream.

Not to mention what it does to user trust: Who's going to want to hand over their credit card information or even cell phone number to the likes of Facebook amid all these scams? (Answer: People who passed their "IQ test" with flying colors and a useless $10/month subscription.)

Yahoo had a shot at acquiring or investing in Google before purchasing Geocities; according to John Batelle's The Search, Google's co-founders Larry Page and Sergey Brin approached Yahoo in 1997 or 1998, but Yahoo passed. Page and Brin were becoming desperate for resources — they had scrounged far more than their fair share of excess servers, hard drives and bandwidth belonging to Stanford University — so on the advice of a professor they turned to Sun co-founder Andy Bechtolsheim:

Brin sent Bechtolsheim an e-mail late one night requesting a sit-down, and Bechtolsheim answered immediately. He suggested meeting the next morning at eight o'clock... They agreed to meet, on the porch of [a mutual friend's] Palo Alto home...



[Page:] "We did a demo, and Andy asked a lot of questions. [Then] he said: 'Well, I don't want to waste time. I'm sure it'll help you guys if I just write a check.'"



...When Bechtolsheim went out to his car to get his checkbook, they pondered how much to ask for and at what valuation... "We told him our valuation and he said, 'Oh, I don't think that's enough, I think it should be twice that much...'"



Minutes later, Page and Brin had a check for $100,000.

This happened in late 1998, right around the time Yahoo would have been negotiating its Geocities boondoggle, which was consummated in January 1999. To think the company could have had Google for a song. Google users should be glad Yahoo didn't — Yahoo's bumbling managers probably would have run Google.com into the ground. Twitter investor Fred Wilson should be glad, too: the Geocities deal earned his venture capital firm a hundredfold return.

MySpace CEO and would-be savior Owen Van Natta, the studmuffin hired away from Facebook, told the Financial Times he's not gunning for his ex employer any more:

"Facebook is not our competition," he said. "We're very focused on a different space."

Van Natta added that MySpace it will focus on its strength: Music. MySpace has become the default Web host for independent rock bands, and recently purchased music software company iLike.

MySpace wasn't always so blasé about social networking, the company used to have Facebook in its sights. It was barely two years ago that Van Natta's predecessor Chris DeWolfe got an urgent phone call from Peter Chernin at MySpace's parent company saying, "I need a plan for dealing with Facebook in two weeks." This led, according Julia Angwin's book Stealing Myspace, to a strategy for dealing with "the Facebook challenge head on," presented at a Merrill Lynch conference.

"I realize every person in tis room wants to ask me about Facebook, and, frankly, I want to talk about Facebook," [Fox Interactive Media president Peter] Levinsohn said.

But these days MySpace has just one third of Facebook's users. No wonder the company is singing a different tune.

It's just not a well advised one. Instead of competing with a money-losing internet company headed by a twentysomething college dropout, MySpace will now be taking on Apple (cash hoard: $30 billion) and Google (annual profits: $5 billion, operator of YouTube and soon to be a retailer of MP3s). Sounds like a great plan.