Digital Media

Video game developer Electronic Arts announced on Monday that it has acquired social-gaming company Playfish, paying $275 million in cash and $25 million in "equity-retention arrangements." Playfish also is entitled to up to $100 million if it meets performance milestones by December 31, 2011.

EA also announced later Monday that it planned to eliminate 1,500 jobs, or about 17 percent of its workforce, as part of a plan to reduce annual costs by about $100 million.

The acquisition of Playfish falls in line with EA's desire to be more than just a developer for traditional gaming platforms, like consoles and the PC. The company said in a statement that the acquisition "strengthens its focus on the transition to digital and social gaming."

Thanks to the explosive growth of social networks and games made for those platforms, Playfish is enjoying strong performance in the social-gaming space. The company has more than 150 million games installed on several platforms, including Facebook, MySpace, the iPhone, and Android-based devices. According to Playfish, more than 60 million active players per month are playing titles. Its Facebook titles include Pet Society, Restaurant City, and Country Story--all three are among the most-popular games on the social network.

The EA Interactive division, which Playfish will join, has done a fine job of capitalizing on the trend of online and mobile gaming. That division includes Pogo, one of the top casual-gaming sites on the Web. The Mobile side of EA Interactive has captured 34 percent market share in the U.S. with the help of Madden NFL 10, The Sims, and Tetris.

Updated at 10:20 p.m. with details of job cuts.

Although technology and the Internet have taken a beating in the past for potentially limiting people's social interaction, a new study from the Pew Research Center has found that the opposite might be true.

According to a Pew Internet Personal Networks and Community survey, which polled 2,512 adults, the dawn of new technology and the Internet has not caused people to withdraw from society. In fact, the study found that "the extent of social isolation has hardly changed since 1985, contrary to concerns that the prevalence of severe isolation has tripled since then." Pew said that 6 percent of the entire U.S. adult population currently has "no one with whom they can discuss important matters or who they consider to be 'especially significant' in their life."

That said, Pew did find that Americans' "discussion networks"--a measure of people's "most important social ties"--have shrunk "by about a third since 1985" from three people to two. However, Pew found no evidence to suggest that it had anything to do with mobile phones or the Internet. In fact, the organization's study found that mobile-phone use and active Web participation yields "larger and more diverse core discussion networks."

Social media is also helping people expand their social interaction. According to Pew, those who use the Internet frequently "are much more likely to confide in someone who is of another race." Users who share photos online are more likely to discuss political topics with someone of a different party, the organization found.

Do you know your neighbor?
Frequent Web users are more likely to communicate with neighbors in person than those who don't use the Web as often, Pew found. In fact, 61 percent of respondents said that they talk to a neighbor at least once per month. The study also found that bloggers are 72 percent "more likely to belong to a local voluntary association" than those who don't blog.

Perhaps most important, Pew found that just because someone is a heavy Web user, that doesn't mean they remove themselves from traditional social activities like visiting a restaurant or hanging out at a bar on a Friday night. According to the study, Web users are "45 percent more likely to visit a cafe, 52 percent more likely to visit a library, 34 percent more likely to visit a fast-food restaurant, 69 percent more likely to visit other restaurants, and 42 percent more likely to visit a public park." Later on, the study reported that social-networking users "are 40 percent more likely to visit a bar, but 36 percent less likely to visit a religious institution."

So, next time your grandmother tells you that the Web is ruining the world, you might want to tell her to check out Pew's study. For more on these figures and many more, click here.

Apple's iPhone and Android-based smartphones have both seen solid growth throughout the world this year, says a report released Wednesday by AdMob.

The iPhone's worldwide market share jumped from 33 percent to 40 percent over February to August, according to AdMob's "August Mobile Metrics Report," which tracked smartphone usage for that six-month period. AdMob, which serves ads for mobile Web sites and apps, bases its numbers on data from ad requests, impressions, and clicks.

Phones running Google's Android OS picked up a 7 percent market share by August versus only 2 percent in February, thanks to rapid gains in North America and Western Europe, said AdMob. Since its debut this summer, T-Mobile's Android-powered MyTouch has been a top seller in both of those regions.

(Credit: AdMob)

With the launch of the Pre, Palm's WebOS has also taken off, grabbing a 4 percent slice of the smartphone market in August.

Top smartphones across the world

(Credit: AdMob)

On the downside, older smartphone systems have witnessed a drop in market share, according to AdMob.

The global share for Nokia's Symbian OS fell from 43 percent in February to 34 percent in August. However, Nokia smartphones remain hot sellers, accounting for 12 of the top 20 smartphones tracked by AdMob. Nokia's N97 and 5800 XpressMusic units were the fourth and fifth most popular smartphones in the U.K. for August.

Research In Motion's slice of the market dropped slightly from 10 percent in February to 8 percent in August. Still, RIM's Blackberry devices accounted for three of the top 20 smartphones around the world. The Palm OS, running on older units such as the Centro, declined in share from 3 percent in February to 1 percent in August.

Finally, Microsoft's Windows Mobile also lost share, falling from 7 percent in February to 4 percent in August, according to the report.

AdMob sells and tracks ads on mobile Web pages and applications to more than 7,000 publishers. The company compiled the data for this report based on its analysis of more than 10 billion monthly ad requests from over 160 different countries.

Could Intel's new Moblin 2.1 OS make a dent against Windows in the mobile and desktop markets?

At this week's Intel Developer Forum in San Francisco, the chipmaker debuted a beta version of its Moblin 2.1 open-source operating system targeted to run on a variety of devices, including smartphones, Netbooks, nettops, Mobile Internet Devices (MIDs), and in-car systems.

Moblin 2.1 will compete with other open-source operating systems like Google's Android and bump up against Microsoft in the burgeoning nettop arena.

Originally developed for Netbooks, Moblin 2.1 (short for mobile Linux) will come in three flavors--one for handhelds, another for Netbooks, and a third for nettops.

In the market for handheld gadgets such as smartphones and MIDs, Moblin 2.1 will run on Atom chip-based devices. The beta demoed by Intel at IDF showed off capabilities for touch-screen and gesture input. The new interface will also let users switch among different open applications and will provide shortcuts to social-networking apps.

The Moblin 2.1 Web browser will also support Flash and Microsoft's Silverlight 3 technology to run interactive Web-based apps.

After inking a deal with Samsung last month to deliver movies directly to your home, Blockbuster announced on Tuesday that its OnDemand service is also coming to your mobile phone.

Blockbuster OnDemand, to be available on "select" Motorola mobile phones, will provide users with access to "thousands" of films, the company said in a statement. Users of the upcoming application, whose release date is yet to be announced, will also be able to choose films for home delivery or reserve titles for in-store pickup.

According to Blockbuster, the Motorola deal is yet another element in its strategy of providing consumers with options to get its movies anywhere, at any time.

For its part, Motorola believes that offering Blockbuster movies on its handsets will help it regain some of its appeal. The company once sat atop the mobile-phone industry. Today, it's a shadow of its former self. And it's trying desperately to regain some market share.

That might be coming through Android-based devices. Motorola has already signed on to deliver Android phones. Blockbuster's app might become a component in that strategy. But by competing with the iPhone and its many multimedia capabilities, Motorola and Blockbuster will be facing an uphill battle.

(Credit: Meraki)

Meraki, a known mesh network provider, released Tuesday its first Wireless Census for North America and the results, though dramatic, seem nothing of a surprise. Basically, there has been a huge increase in the number of wireless-capable devices, among which Apple's handheld devices had the biggest jump.

The Meraki Wireless Census surveyed 10,000 randomly selected Meraki access points deployed in North America for two 24-hour periods: June 2, 2008, and June 1, 2009. The study measured the number of distinct client devices that sent probe requests in each 24-hour period. The purpose of the survey was to identify macro-level traffic and end-user device trends.

In details, the number of mobile devices including laptops and handheld devices grew from some 149,000 in 2008 to more than 211,000 in 2009, a 41 percent increase.

Apple's devices played a huge role in this increase. The company's Internet-enabled devices now account for 32 percent of all devices, represented in the survey, in 2009, compared with only 14 percent in 2008. The survey also showed that the popularity of Apple laptops, iPhones and iPods increase an impressive 221 percent just in one year.

Other than Apple's products, there have been an increasing amount of Wi-Fi-enabled handheld devices from other well-known vendors. According to the Meraki's census, the number of Research In Motion (RIM) devices, best known for the BlackBerry smartphones, observed in North America grew by 419 percent from 2008 to 2009, while Nokia devices grew by 114 percent.

In 2008, RIM devices represented just two percent of all devices observed, but grew dramatically to 8 percent for 2009. In 2008 and 2009, Nokia represented one percent and two percent of all devices, respectively.

These shifts in types and numbers of wireless devices are to be expected. In the past few years, more and more highly Internet-capable smartphones have been introduced and more and more Web services are tailored for mobile users.

Personally, while I wish the survey was done in larger than 24-hour periods, the trends seem right and definitely represent the way I access the Internet. Apart from sitting at work writing on my desktop, when on the go, my almost exclusive way to access the Internet is via my iPhone.

How about you? How often do you access the Internet via your phone? Please share your thoughts in the comments section.

Those of us who pay to watch online video on our mobile devices are about to be joined by a lot more people.

The number of users globally paying for mobile video and TV services is expected to jump to 534 million by 2014, a five-fold increase from 2008, says a report released Thursday by market researcher Pyramid Research. Much of the recent growth has been fueled by increased bandwidth, lower data costs, and more advanced handheld devices, and that trend will continue.

(Credit: Pyramid Research)

In the report, mobile video includes paid video clips, music videos, TV episodes, TV programming, and online movies that are delivered directly to a mobile device.

In the U.S. alone, Pyramid estimates that revenue from mobile video services will reach $16 billion by 2014. However, much of the demand will come from Europe and Asia/Pacific.

"The availability of improved devices and networks are contributing to a higher level of adoption and spending on mobile video services," says Derek Medlin, senior analyst at Pyramid Research and author of the report. "Pyramid Research believes that a substantial proportion of mobile Net additions in the next five years will come from emerging markets, especially in Asia/Pacific, and will drive a 37 percent growth in total mobile subscriptions from 2009 to 2014."

In the Asia/Pacific region, countries such as Japan, Hong Kong, and South Korea already lead the way in the number of mobile video subscriptions. However, Pyramid also forecasts higher growth from India and the LATAM region over the next five years.

"Looking ahead, Asia/Pacific will remain in the top spot, attaining more than 281 million subscriptions by 2014," says Medlin in the report, "although we expect Latin America to grow at the fastest pace, increasing at a CAGR (compounded annual growth rate) of 39 percent from 2009 to 2014."

Social music start-up iLike has come a long way from its early days as the way to "dedicate a song" to your friends on Facebook.

On Wednesday, the Seattle-based company plans to unveil some fresh new features for the set of tools it offers to artists who want to connect with current and potential fans. It's hooked up the application program interfaces (APIs) of Twitter, YouTube, and MySpace to allow for more extensive content syndication from artists' iLike pages, and has released an iPhone app-creation product to boost their mobile presences.

"Marketing and communication are the primary things that artists are still in need of a third party's help in," CEO Ali Partovi told CNET News. "Music production and distribution, I think, there are pretty successful and well-established services right now that essentially let you do it yourself."

The Twitter, YouTube, and MySpace add-ons are understandable supplements to the existing "artist pages" feature that iLike says more than 300,000 bands and artists now use. With Twitter's API, artists using iLike will be able to embed a Twitter widget on their iLike pages as well as syndicate iLike updates out to their Twitter feeds. They'll also be able to automatically publish a video to YouTube when they publish it to iLike, and vice versa; with the News Corp.-owned MySpace, they can add iLike "RSVP" links to MySpace concert listings and cross-post blogs and videos to both services.

For iLike, which got its start as an iTunes plug-in and now specializes in developer applications for social networks like Facebook, Bebo, and Hi5, this move is another step toward making it a more flexible, distributed alternative to simply running a MySpace band page. iLike, in addition, recently rebranded its Facebook app to simply "Music."

As part of the new feature package, it's also selling artist analytics about where fans are located, how much they interact with iLike pages, and how well individual pieces of content like videos and blog posts perform. That'll cost $99 per year, Partovi said.

But the center of the new iLike offering is the "turnkey system" for creating custom iPhone apps. Basically, this is a relatively quick way for an artist to create an iPhone app that gives fans access to tour dates, iTunes Store purchasing, videos on YouTube, blog entries, and related content.

It's also a new revenue stream for iLike, which will take a cut of the sale of each iPhone app if an artist chooses to charge for it, and will charge an activation fee if the artist chooses to offer the app in the iTunes Store for free. As a launch promotion, that activation fee is currently $99; a formal price will be announced next week.

There might be some advertising down the road, too, though Partovi declined to say when or how. "Our plan in terms of the business model, like everything else we've done, is (to) put it out there and develop adoption, and over time to figure out the best way to monetize it."

Not everyone's going to want to download iPhone apps to keep tabs on every single one of their favorite artists, and while Partovi said that a sort of universal iLike "favorite artists" app isn't yet on the company's iPhone roadmap, he expects there are enough artists with rabid fan bases for the apps to be a success.

"I don't anticipate a whole lot of fans downloading a hundred different apps for their favorite artists," Partovi said, "but for a fan that has a small group of artists that they're really passionate about, there are fans who will want everything that they can get their hands on from that artist."

And what happens if one of the artists pulls a Nine Inch Nails and gets rejected by Apple due to "objectionable" content? iLike is responsible for the submission process, and hence also responsible for what happens in the event of rejection, but Partovi implied that he's keeping his fingers crossed that there won't be an issue. "We're going to take care of the submission," he said. "We can't guarantee approval, per se, but there's common elements from app to app. We're hoping that once we get some traction that it'll be generally easier."

E-marketing firm SmartReply has acquired mobile-advertising specialist MSnap in an effort to increase its presence on wireless devices.

SmartReply, which distributes advertisements via voice messages, e-mail, and text messages, is seeking to create the largest U.S. mobile-messaging ad network through the acquisition, according to a post on MSnap's Web site.

Terms of the deal were not disclosed, and MSnap and SmartReply were not immediately available for comment, but according to a report in The Wall Street Journal, MSnap's shareholders will receive a minority stake in SmartReply.

MSnap, founded in 2006, has received investments from Partech International and First Round Capital.

The Journal, citing figures from investment bank Partech, noted that approximately 80 mobile-marketing companies have collectively raised more than $1.2 billion in venture funding since January 2006. During the same period, the Journal noted that 20 companies in the sector have been acquired for a total of roughly $900 million.

The advertising sector has seen a large pullback in the weakened economy, and industry analysts have pointed to small companies and nontraditional media companies as being the likely targets of mergers and acquisitions.