The Social

It looks like the brouhaha surrounding social-app moneymaker Offerpal Media is bigger than founder Anu Shukla's "sh*t, double sh*t, and bullsh*t" response to the accusation that its business is built on scamming consumers. It's got upcoming developments in two lawsuits, one in which it's the plaintiff and one in which Shukla is a defendant.

VentureBeat's Dean Takahashi reported Thursday that a lawsuit was filed in an Alameda County, Calif., superior court against Shukla and co-founder Michael Liu on behalf of Kevin Halpern, who alleges that he helped found the company and was then shut out. In a court complaint, Halpert says that in exchange for offering his social-networking expertise to what would become Offerpal, Shukla promised him a 15 to 20 percent stake in the company that never came to fruition.

The defendant's motion to dismiss the breach-of-contract suit is scheduled for November 24, according to public court documents. On Wednesday, Offerpal had announced that Shukla would be leaving her post as CEO and would be replaced by digital-ad veteran George Garrick.

But that's not the only legal dispute that Offerpal is in. There's a judicial settlement conference scheduled for Friday in the trademark infringement lawsuit that Offerpal filed against Kickflip, a former customer that went on to create a competing business, called Gambit, according to a person familiar with the court details. The suit was originally filed in April, and the status of a potential settlement is currently unclear because most of the events thus far, as well as Friday's scheduled meeting, have been behind closed doors.

But the reason why Offerpal has been in the news so much as of late has been because of Shukla's public altercation with TechCrunch's Michael Arrington at last month's Virtual Goods Summit in San Francisco. In response to Arrington's allegations that Offerpal's profitable business, used by many social-gaming companies as a way for users to earn virtual goods in-game, actually misleads players into signing up for paid offers and subscriptions.

Following the Arrington-Shukla spat, a number of high-profile names in the gaming and social-networking world came out against developer-app scams and misleading ads. Offerpal maintains that it runs a legitimate business. But it's clear that this company's issues run quite a bit deeper than a single PR fiasco.

What's former MySpace CEO Chris DeWolfe up to these days? He wants to be the next big name in the social-gaming craze, we hear.

In late July, TechCrunch floated a report that DeWolfe was hitting up big private equity outlets to amass cash, at least $100 million, for a new venture that would involve "a roll-up of an Internet industry vertical," but TechCrunch didn't specify what that sector was. Three months prior, DeWolfe had been ousted from the troubled MySpace and replaced by former Facebook executive Owen Van Natta.

Former MySpace CEO Chris DeWolfe

(Credit: Michelle Meyers/CNET)

Now, several well-placed sources have told CNET News that DeWolfe intends to make a move in social gaming, a red-hot space currently dominated by the Mark Pincus-headed Zynga, and that his "roll-up" plans involve buying up a number of smaller social gaming companies so that he and Pincus can go directly head-to-head.

Multiple sources have indicated that DeWolfe is working on this new venture with Aber Whitcomb, who left his role as the News Corp.-owned MySpace's chief technology officer in late September.

We don't know what kind of progress DeWolfe, who did not reply to a request for comment, has made in securing that private equity money he was reported to be hunting for this summer. We don't know what the company's name will be--if he's settled on one yet. Nor do we know which smaller companies he wants to agglomerate.

But social games are on the brains of multiple ex-MySpace bigwigs, who were able to witness from the front lines the explosion of the industry when game developers started tapping into the viral channels on big social networks. Another MySpace executive, Jason Oberfest, left the company after just over a year to join social gaming start-up Ngmoco.

One source said that Ngmoco's valuation may already be too high for DeWolfe to consider it for his roll-up plans. Rather, DeWolfe is likely looking at very small gaming companies run by a handful of stellar developers but that lack the legal, business development, and dealmaking resources to make any kind of a dent in the current social-gaming market. He also may be looking at companies that had some initial buzz but have since seen their growth plateau or drop off.

We hear that in the months before DeWolfe's departure from MySpace, there was a lot of talk of gaming as the social site, rapidly losing ground to Facebook, attempted to refocus itself as an entertainment destination. When DeWolfe was in charge, MySpace inked a deal with casual-games maker Oberon to power a gaming platform, but that deal is no longer in place. (We've contacted Oberon for comment.)

Now, under the direction of Van Natta and several former MTV execs like Courtney Holt and Jason Hirschhorn, MySpace's "entertainment" direction is much more focused on music, and gaming has taken a back burner for the time being even though there are some hugely popular games on MySpace's developer platform.

Things couldn't be more different in the social-media industry at large, where gaming is currently front and center. While there was early on a close rivalry between two companies, SGN and Zynga, the far and away leader right now is Zynga--which is pulling in between $100 and $250 million in revenues depending on which industry blog you read, and spends tens of millions of dollars each year just buying up Facebook ads for marketing.

A few companies, like Playfish and Playdom, have also grown big (though still smaller than Zynga), and there are persistent rumors that one of them may be sold to an established gaming-industry player like Electronic Arts.

Most other companies in the space are easily several orders of magnitude smaller. Trying to make inroads when there's already a clear, formidable leader is difficult, and the economic climate means the private equity sector might be skeptical about handing a blank check to someone because he happens to have CEO experience.

What we have heard, though, is that DeWolfe already has someone to model himself on: Rupert Murdoch, the News Corp. CEO whom DeWolfe was reportedly very close to during his tenure at MySpace. With a roll-up of acquisitions, he would plan to do for the gaming industry what Murdoch did for newspapers: pluck them up across the industry, and build an empire.

Ambitious, yes.

We've been hearing a few sneaky tips from folks within earshot of the Boston, Mass., set of "The Social Network," the Columbia Pictures movie about the contested origins of Facebook. This week, the film crew has been on the Charles River working on scenes in which Cameron and Tyler Winklevoss, the identical twins who had a lawsuit against Facebook founder Mark Zuckerberg, are depicted at a Harvard crew practice.

That Boston Globe report about the Harvard heavyweight crew team getting cast in the background? Not quite.

Ivy League athletic restrictions bar current athletes from being film extras, and filming has been an all-day operation while classes are still in session, so an open casting call was held at the new Community Rowing Inc. boathouse on the Charles River in Newton, Mass.--and former Harvard and Northeastern University rowers are among those in front of the cameras. The CRI boathouse, tipsters tell us, has also been the filming HQ for the crew scenes.

The rowers are serving as body doubles for the actors and extras, as well as the actual muscle to power the boats in team scenes. And a few of them indeed have their faces marked up for the CGI superimposing of actor Armie Hammer's visage--he's playing both of the Winklevoss twins.

One thing we've heard is that one of the characters in the scenes is Harry Parker, Harvard's longtime varsity heavyweight crew coach. He's not playing himself, nor does it appear that a well-known actor has been cast to play him (because this would be a great cameo role), but rather a lookalike actor has the role instead.

Most interestingly, a tipster also tells us that while filming of the crew scenes is expected to wrap up this week, that it'll be headed to the iconic Henley Royal Regatta in the U.K. this June. There is indeed a scene in the "Social Network" that takes place at Henley, and it sounds like they're hoping to film it on-site--though we haven't been able to confirm that the formal, buttoned-up annual regatta will allow a movie crew on the grounds.

Other confirmed filming locations for "The Social Network" are Los Angeles and Johns Hopkins University in Maryland, which will be standing in for Harvard's campus. Will the cast, which includes "Zombieland" star Jesse Eisenberg (as Mark Zuckerberg) and pop star Justin Timberlake, actually do any filming in Silicon Valley? No word on that yet.

"The Social Network," directed by David Fincher ("Fight Club"), is based on Ben Mezrich's recent book, "The Accidental Billionaires." Facebook has maintained a stance that it stretches the truth.

A boat rows on the Charles River in Boston in the fall of 2006.

(Credit: Caroline McCarthy/CNET)

Now, these are some guys you don't see at the average Silicon Valley hackathon: The Harvard heavyweight crew team is filming scenes for "The Social Network," according to a Boston Globe gossip column on Tuesday. Film crews have been on the Charles River in Boston recently, the column reports.

That's because two of the main characters in the juicy, David Fincher-directed tell-all about the origins of Facebook are Cameron and Tyler Winklevoss, would-be social-network entrepreneurs who claimed that Facebook founder Mark Zuckerberg stole the code and business plan for their project, ConnectU. The identical twin Winklevosses were also members of Harvard's crew team, they and ultimately wound up on the U.S. Olympic squad last summer in Beijing.

The Globe column also notes that one of the rowers had some red dots painted on his face so that ultimately, the face of an actor could be superimposed on it--which, though it sounds technologically complicated, is probably easier than trying to teach an actor how to row. Besides, "The Social Network" already has some smoke and mirrors to deal with: the Winklevoss twins are being played by a single actor, Armie Hammer.

(The Globe assumes that the face to be superimposed is that of pop star Justin Timberlake, who plays Napster co-founder Sean Parker in "The Social Network." But Parker, we're pretty sure, never rowed on Harvard's heavyweight crew team.)

Meanwhile, though the Charles River is apparently fair game, it looks like Harvard didn't let the film crew on campus: Johns Hopkins University in Maryland put out a release on Tuesday saying it will be standing in for Harvard, in some scenes shot in early November.

SAN FRANCISCO--Tim Armstrong is such a tease.

The AOL CEO, speaking at the Web 2.0 Summit on Thursday, didn't have any high-profile announcements like many of the other speakers at the conference. But instead, he hinted that one might be on the way.

"We have been working on something for the last three months that I think is a fairly substantial shift in our technology," he said. "When that's ready to announce, maybe we'll come back and talk to you about it."

Interviewer and conference organizer John Battelle tried to pry more information out of him, to little avail. But it sounds like it has something to do with the framework that powers AOL's network of blogs and content properties.

"It's a broader platform with more information around content and the creation of content," he said. "We see that platform evolving to a much higher scale."

Armstrong, who joined AOL in March after a stint as head of sales at Google, said that recently the company has increased its roster of journalists from 500 to over 3,000, and that over 3,000 pieces of content are posted every day to AOL properties. It's also now creating three to four times as much video as it was several months ago.

"We've hired people from places like The Wall Street Journal and ESPN," Armstrong said. "You're not just hiring a person, you're hiring the community they come with, and I think that has been an important part when you look at the network effects of that."

It's still not clear how AOL, currently in the process of being spun out from parent company Time Warner, will rake in profits from this huge investment in media content. Armstrong seemed unfazed.

"If you're not going to take risks and you don't think the future is bright," he said, "the Internet is probably not the right place for you."

Microsoft executive Qi Lu will reportedly make a big announcement onstage at the Web 2.0 Summit in San Francisco later on Wednesday morning: that its search engine, Bing, has inked deals with both Twitter and Facebook to bring real-time status updates and tweets into search results. That's something you can't find on Google.

According to AllThingsD's Kara Swisher, neither partnership will actually turn into a product for "weeks, if not months," and that both Twitter and Facebook have also been talking to Google about similar deals.

When asked about the deal announcement earlier on Wednesday at Web 2.0 Summit, Microsoft director of search Stefan Weitz declined to comment, saying, "I have no idea."

Facebook's mum, too. "We don't comment on speculation," a statement e-mailed on Wednesday morning by Facebook spokeswoman Kathleen Loughlin read. "Later today, COO Sheryl Sandberg and VP of Engineering Mike Schroepfer will be speaking at Web 2.0 at which time they will be available to answer questions regarding Facebook."

Rumors started swirling earlier this month that Twitter was looking to make big search-results partnerships with Google and Microsoft.

Microsoft already has a stake in Facebook, which it obtained when it invested $240 million in the social network--allegedly beating Google to the punch then, too--two years ago.

While Twitter is far smaller than Facebook, it's already a step ahead in searchability: it acquired third-party Twitter search app Summize last year and built it into the powerful, real-time Twitter Search. Facebook used to keep all of its data behind a log-in wall, but two years ago started to make the first steps toward becoming more accessible to search engines when it gave members the option to let their profiles show up in "people search" queries on the likes of Google.

More recently, it's been making additional small moves toward opening profile content to the Web, like redefining its privacy controls so that members can specify which of their information and updates can be made public.

This post was updated at 9:53 a.m. PT.

Guess what? Facebook is tweaking its home page design yet again--something that invariably seems to tick off members at first before they realize they actually don't mind that much. The company seems to have been previewing the new look to advertisers, one of whom forwarded the details along to industry blog Mashable.

It doesn't look too different. The biggest change is that Facebook's home page news feed will now be divided up into "top news" and a more real-time "recent activity" view.

The explanation:

"Facebook is simplifying the user experience on the home page by introducing Top News and Recent Activity streams. Now, when users log on to Facebook for the first time in a while, they will see the most important stories that they missed while they were away. From there, users can navigate to the real-time stream and toggle between both views throughout their sessions. In addition to making it easier for users to view content that is most relevant to them, this change also speeds up the time it takes for the home page to load and makes birthday reminders more prominent."

A screenshot from a document that Facebook sent to brand advertisers about an impending redesign.

(Credit: Facebook)

Note the mention of birthday reminders. On a given member's birthday, a pop-up version of Facebook's "gifts" application appears on that user's profile so that friends can purchase virtual gifts to display. The "gifts" feature is also currently the center of the fledgling e-commerce plans that Facebook has been bouncing around for quite some time now: It's currently the hub of its "credits" virtual currency, and advertisers can purchase sponsored gifts that members can give to one another. These have also been tested out with a select number of nonprofits.

For users, it sounds like Facebook is correcting some of the changes that members seemed to complain about the most with its last redesign. "Facebook has also put information back into the stream that people have asked for, including photo tags, friend acceptances, relationships, event RSVPs and group memberships," the explanation obtained by Mashable read. Also in there will be information about what a user's friends do on brands' "fan" pages, potentially increasing the exposure for advertisers and marketers looking to jump on the social-ads bandwagon.

Why so much redesigning? Facebook's executive team likes to pitch the company as a living, evolving product. At an event last week in Palo Alto, Calif., Chief Operating Officer Sheryl Sandberg underscored Facebook's belief in constant "iteration," a term you'll also often hear CEO Mark Zuckerberg using.

"The great thing about Facebook is (that) we are constantly evolving the site and constantly evolving the usage," she said. "People protested the new home page redesign, but engagement went way up and users continued to grow."

A test 'Square' in action, and a screenshot of the geo-tagged receipt.

(Credit: Engadget)

Well, we finally have a glimpse at "Square," the new mobile payments venture coming from Twitter co-founder and chairman Jack Dorsey. As expected, it's a little hardware add-on that can turn an iPhone into a credit card reader.

The funny part: Details about the small-business-oriented project have been on the Web for months. It was just that nobody had put two and two together until some eagle-eyed folks at Engadget realized that a URL on a screenshot of the "Square iPhone Payments Venture" first reported by Coolhunting matched a domain registered to Dorsey.

Dorsey, who stepped down as Twitter CEO almost exactly a year ago, is headquartering the company in New York, though we hear he already has employees in both Gotham and San Francisco. Its Web site will likely be located at SquareUp.com. Currently, that site is a collection of links to a smattering of businesses, including Sightglass Coffee, a new San Francisco coffee shop in which Dorsey has invested. (Wanna bet they're testing Square out there?)

From Coolhunting:

The innovation is in a small, plastic card reader that fits in to the headphone jack of an iPhone (or iPod Touch) and transfers the credit card's swipe data to the app. After the employee enters the amount to charge, the customer confirms by scrawling their signature with their finger and then either one enters the customer's email address to send the receipt to. The payment is processed by Square for a small percentage plus a fixed fee; the funds are transferred directly to the store's bank account, cutting both time and complexity on the processing side. The customer's receipt includes a map showing the location of the transaction which is handy for those who record, sort and file such things.

We heard that the venture is being called Square rather than "Squirrel," its originally reported name (according to TechCrunch's MG Siegler, this is because it looks kind of like an acorn) due to some unclear legal-copyright-licensing-whatnot issue. CNET News first reported the name change along with the news that Dorsey had been an angel investor in location-based mobile navigation start-up Foursquare.

Funding a hardware venture is typically more expensive than a Web-based one for obvious reasons: the up-front cost of production and manufacturing.

But two sources with knowledge of Square's logistics said that Dorsey believes he can keep production costs extremely low, possibly manufacturing a "square" at a cost of about 40 cents apiece. The company may then even give the devices away for free, making money instead on transaction fees. That's the old Gillette razor business model--make the razors cheap or even free, but replacement blades more expensive.

Regardless, we hear Dorsey has been working on a funding round.

The crew of "The Social Network," the David Fincher-directed retelling of Facebook's earliest days, is headed to film in the Boston area soon with a widely reported start date of October 19.

Rumors on Web forums indicate that the Harvard Square neighborhood of Cambridge, Mass.--the eponymous university's epicenter--will be the backdrop for some scenes involving actor Jesse Eisenberg, who plays Facebook founder Mark Zuckerberg. Eisenberg himself has been quoted as saying that the movie will actually be filming on Harvard's campus, something that the university would not confirm.

Facebook was founded in a dorm at Harvard when Zuckerberg was a sophomore there; he later dropped out to run the site full-time. "The Social Network" script was based on writer Ben Mezrich's "The Accidental Billionaires," an unauthorized tale of Facebook's origins that doesn't portray Zuckerberg in the most positive manner.

Boston.com reported Thursday that a Somerville pub called the Thirsty Scholar has confirmed that it'll be used as a filming location, but couldn't confirm what everybody wants to know--whether pop star Justin Timberlake, who plays early Facebook exec Sean Parker, will be on-set.

Here's the catch. I've read the Aaron Sorkin-penned script for "The Social Network"--granted, it's a draft with a May 2009 date on it, so who knows what has changed--and Sean Parker doesn't even appear in any Boston scenes. Sorry, Boston.