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Offerpal Media, a company that helps social-network app creators make money from offers and surveys, on Tuesday announced that it had replaced its CEO in the wake of a high-profile onstage argument at a conference and subsequent press over whether it's scamming consumers who fill out offers in order to earn virtual goods in social games.

Anu Shukla, who founded the company and had been serving as CEO since its 2007 launch, will be replaced by George Garrick, who has served as the CEO of Flycast Communications, Wine.com, Jingle Networks, and Mochi Media. Shukla "will still be involved and help guide the company," an Offerpal representative told CNET News.

A statement from Shukla makes it sound like the company's been CEO-hunting for months ("I have known George for a long time...After many months of searching, I believe that George is the best CEO to scale the company to new heights. I am looking forward to working with him closely"). But the timing is a little too good to be coincidental: a firestorm erupted over Offerpal and other companies in its niche after TechCrunch's Michael Arrington confronted Shukla while she was on a panel at the Virtual Goods Summit in San Francisco last month. Arrington accused Shukla of running a scam operation that tricks consumers into unwittingly spending money--and of course, he then blogged about it.

Shukla's response to Arrington was "sh*t, double sh*t, and bullsh*t."

But the industry has taken the controversy seriously. Social game makers like the massive Zynga have come out and said that they would ban potentially shady and misleading offers, even though those might make up a sizeable chunk of revenue, and on Tuesday social network MySpace joined the debate and said that it had modified its terms of service to outlaw "app scams."

Shukla was interviewed by VentureBeat's Dean Takahashi in a lengthy article published on Tuesday.

This post was expanded at 4:55 p.m. PT.

It's been said that information technology is a fashion industry--that we just keep following the latest hype and fads. Oracle CEO Larry Ellison last year referred to cloud computing this way.

Ellison loves this dig, and he uses it least once every technology generation. He's not alone. I, however, disagree with the entire curmudgeon corps' "It's just hype!" attitude.

While it's true that we in IT have our fashions, just like any field of human endeavor, we're generally pretty practical. It's hard to see either IT's executives or its technicians as highly subject to the whims of style or flights of fancy. The truth is closer to the notion that we're an evolving industry--one constantly struggling to find better ways.

It's not easy to grapple with the fantastic, relentless progress afforded by Moore's Law (on the supply side), nor the constant demand for more capacity, capability, and integration (on the demand side).

In a few short decades, IT has undergone a massive shift from an engineering-oriented support role to driving the beating heart of the global economy. IT is now central to large swaths of all human activity.

As new technologies and strategies come online--whether network computing, open source, agile development, service-oriented architecture (SOA), cloud computing, virtualization, or whatever--we seek to employ them to improve our outcomes.

There's always a bit of experimentation and a bit of hype involved in the early days. Indeed, without that willingness to "try it out" and a strong shot of enthusiasm on the side, we wouldn't be advancing as well as we are. That's not just hype you're hearing; it's also the will to progress. And for the most part, the recipe works.

Most of the major new approaches touted over the past few decades have become workaday parts of the IT landscape. Most apps, for example, are now "client-server" in design. Linux and other open-source engines run much of the Internet. SOA is how enterprise IT is designed.

The same Web services that Ellison derided years ago now underpin much of e-commerce, as well as high-interactivity Web 2.0 services such as Google Maps. And virtualization and orchestration--frequently discounted at the top of this decade--are now fundamentally changing how data centers are operated.

Indeed, when one of these previously experimental, previously hyped approaches recede from view, it's usually not because they've failed but because they've succeeded so well that we don't need to talk about them anymore. They've been burned into the way we do IT.

Each wave of technology builds on the last, incorporating its best parts, weeding out what didn't work, and often re-emphasizing themes that had appeared years before but weren't quite workable at that time--though often using different names. The utility computing, grid, and application service providers of years past, for example, have become the software as a service (SaaS, or more generally, ITaaS) and cloud computing of today.

So when something new comes your way--a new approach, a new strategy, a new way of looking at or doing IT--by all means, be skeptical. Try it out in careful, measured ways. But do try it out--and have enthusiasm for those new things. That's how we advance.

The heated mobile-payment wars are expanding...beyond mobile. Zong, one of the start-ups hoping to capture the market for online micropayments billed to a mobile phone, announced Thursday the debut of "Zong Plus," which lets members link credit or debit cards to their Zong accounts.

It's another move that pits Zong against Boku, a competitor that launched right around the same time with broader global reach--last month, it announced its expansion to subscription-based services in addition to on-demand micropayments.

At launch, Zong Plus is compatible with Visa, MasterCard, Discover, and American Express accounts,

"Today you've got a variety of products for different kinds of payments and services," vice president of product management Hill Ferguson told CNET News. "You've got PayPal. You've got several of us in this mobile payment arena. What Zong Plus does is just elevates us into a different mobile payment type."

On the surface, adding traditional credit card payments seems to defeat the purpose of Zong, which inherently tries to offer a simpler and more universal alternative for small payments (cell phone carriers put a cap on how much can be spent). But Ferguson said that Zong Plus, which is free for participating merchants to upgrade to, "is an optional feature for consumers who have payments cards and feel that the incentive that we offer is powerful enough for them to open up their wallet and type in the information."

What's that incentive? Part of Zong Plus is a loyalty program that will rack up points much like airline miles. In a participating game or other micropayments-linked application, this means that when enough points have been accrued, the member may be alerted that their next purchase is "on the house."

Whether it will work is still unclear. Zong has deals with social gaming and virtual-world companies like OMGPOP, IMVU, and Gaia Online, but there are still enough rivals offering similar packages as well as the off chance that a big e-commerce player like PayPal could launch a service of its own and snuff out the competition.

The announcement comes in advance of the Virtual Goods Summit in San Francisco, where pretty much any start-up involved in the latest generation of e-commerce (read: magic swords and Mafia dons) will be showing off its wares. Plenty of other companies will be making announcements, too, presumably some in the payments space.

The revamped Facebook gift shop.

(Credit: Facebook)

It's not just music as rumored: Facebook announced on Wednesday a major overhaul to its "gift shop" feature, meaning that the social network just became an even bigger player in the burgeoning virtual-goods industry.

"We now are unveiling a newly stocked and redesigned Gift Shop, with new categories of gifts and additional gifts for charity, music, and sports from developers," a post on the company blog by Facebook's Will Chen read. With so many gifts available, we also introduced a new design to make it easier for you to browse and purchase gifts with different gift categories." It'll be rolling out over the next few weeks, he added.

Needless to say, this is a huge deal for the virtual-goods industry, which some estimate is now a billion-dollar business.

It also beefs up one of Facebook's few non-advertising revenue streams (though many of the virtual goods in the "gift shop" are licensed or sponsored)--even though in a talk on Wednesday at the Web 2.0 Summit in San Francisco, Chief Operating Officer Sheryl Sandberg downplayed rumors that the company would be making big moves into bringing commerce and payment transactions to its developer platform.

Music files, as rumored, will be sold through a partnership with Lala. Right now, they are only available to Facebook users in the U.S.--less than a quarter of its total membership. For one Facebook "credit" (10 cents U.S., and currently available for purchase in 15 currencies from around the world), members can buy one another songs that can be played online. For 10 credits (a dollar), they can gift downloadable MP3 files. "Other people who are able to see the music gift (in that member's profile) will only be able to play the song in full once, after which they will be able to play a 30-second clip," Chen's post added.

This is a big move on Facebook's part for another reason: iLike, which powers the extremely popular "Music" app on the social network, and which allowed members to gift songs to one another through the third-party application, was acquired by Facebook rival MySpace this summer.

Instead, it's partnered with Lala--which is also one of the partners in the music initiative that Google is slated to launch next week.

But music isn't all that's new in Facebook's revamped Gift Shop. There are also sports gifts officially licensed by teams--branded virtual goods from a number of college sports teams as well as the National Basketball Association and U.S. Major League Soccer. Also rolled in have been the non-profit gifts that Facebook first debuted this summer. In addition to existing partners like Kiva and Project Red, virtual charity gifts will also be sold by popular third-party Facebook app Causes.

And images posted to the Facebook blog show additional categories--e-cards, which are pretty self-explanatory, and "real gifts," which bundle a physical gift sent in the mail along with the virtual gift. These have all been tested in a limited scope by Facebook over the past few months.

Leaked screenshots of a document that Facebook distributed to advertisers earlier this month revealed that an upcoming design modification to Facebook's home page will make birthday alerts--which also encourage members to buy gifts for one another--more prominent.

Facebook hasn't disclosed any financials related to how much advertisers pay for sponsored gifts, or how any revenue-sharing logistics pan out.

Other social-networking services are trying to get in on the action, too. Social-site creator Ning, for one, launched a gifts platform earlier this week.

More to come...last updated at 4:01 p.m. PT.

Facebook COO Sheryl Sandberg speaks with John Battelle at the Web 2.0 Summit about features we can expect from the social-networking site.

(Credit: James Martin/CNET)

SAN FRANCISCO--Two of the biggest rumors about big, upcoming Facebook products--an ad network and a payment transaction platform--won't be making a big splash anytime soon, chief operating officer Sheryl Sandberg said in a talk on Wednesday afternoon at the Web 2.0 Summit.

"We're asked it all the time," Sandberg said on the question of whether Facebook would be launching an ad network for external Web sites using the Facebook Connect universal-login product. "We focus on building products for users and we think about the monetization later. And I'm not saying that in a cute way, because we are very focused on monetization."

Then there are the reports that Facebook will be launching a PayPal-like transaction system or large-scale virtual currency, a rumor that's been floating around literally for years. "There's a lot of speculation on payments, and (we) don't want to fuel the speculation," Sandberg said in her talk on Wednesday. She did say that Facebook processes payments internally for advertisers buying up inventory ("We needed people to be able to buy ads internationally," she explained) and that it's playing around with the "credits" system that it uses in its "gift shop" feature.

"We are doing some testing with a couple of developers to see if they can use credits in apps they have," Sandberg said. "That's all we're talking about right now. We're in a learning phase."

Some potential customers have hinted that Facebook may have already gotten too big to deploy such a product. When asked about the idea of a Facebook payment system, John Cahill, the CEO of teen virtual-world Meez, told CNET News earlier this week that he's skeptical about its potential.

"The bigger the social network, the harder it is for a currency," Cahill said. "I've spent some time in the payments space and the real-world currency space, and rolling out a payment system that can be used by millions of people is very, very difficult. If you get it wrong, you can destroy your community."

But Facebook is dipping one toe after another into the virtual-goods pool. Earlier on Wednesday, the New York Times broke the story that Facebook would be letting members gift songs to one another through a partnership with music service Lala. This would be the first concrete result of yet another longstanding rumor of a "Facebook music service."

Additionally, Facebook has partnered with a number of nonprofits for charity-focused virtual gifts.

Gartner analyst David Cearley

(Credit: Stephen Shankland/CNET)

ORLANDO, Fla.--Cloud computing isn't going to be vapor much longer, Gartner said Tuesday.

The general idea--shared computing services accessible over the Internet that can expand or contract on demand--topped Gartner's list of the 10 top technologies that information technology personnel need to plan for. It's complicated, poses security risks, and computing technology companies are latching onto the buzzword in droves, but the phenomenon should be taken seriously, said analyst Dave Cearley here at the Gartner Symposium.

Gartner's top trends to watch.

(Credit: Gartner)

Specifically, companies should figure out what cloud services might give them value, how to write applications that run on cloud services, and whether they should build their own private clouds that use Internet-style networking technology within a company's firewall.

Cloud computing takes several forms, from the nuts and bolts of Amazon Web Services to the more finished foundation of Google App Engine to the full-on application of Salesforce.com. Companies should figure out what if any of those approaches are most suited to their challenges, Gartner said.

Gartner analyst Carl Claunch

(Credit: Stephen Shankland/CNET)

The advice came as part of a talk on top trends coming in 2010 that companies should incorporate into their strategic planning, if not necessarily their own computer systems. The full list of 10: 1. cloud computing; 2. advanced analytics; 3. client computing; 4. IT for green; 5. reshaping the data center; 6. social computing; 7. security--activity monitoring; 8. flash memory; 9. virtualization for availability; and 10. mobile applications.

Second on the list is virtualization--not just in the broad sense of technology that lets a single computer run multiple operating systems simultaneously, where it's become a fixture in data centers, but as a means to keep computing services up and running despite computer failures, said analyst Carl Claunch.

Virtual machines can be moved from one physical machine to another today. Later, by keeping two machines tightly synchronized, a failure in a primary machine can be eased over rapidly by moving the active service to the backup machine, Claunch said.

"We should start seeing this roll out in the next year or two from vendors," he said.

The Gartner hype cycle takes on the PC.

(Credit: Gartner)

For PCs, virtualization is arriving, too.

"Think of applications in bubbles," Cearley said. "They can run on client devices or up on a server," with virtualization providing the encapsulation technology to move the work around. The official corporate computing environment can run side by side with employees' home computing environment.

That, along with cloud computing, enables more freedom for people using PCs.

"We're looking at a time when the specific operating system and device options matter a lot less," Cearley said. "You could use a home PC or a Macintosh with a managed corporate image running on that particular device...We see more companies providing a stipend (for) employee-owned PCs."

Make your data center modular.

(Credit: Screenshot by Stephen Shankland/CNET)

Another idea: modular data centers. You don't have set up your IT gear in storage containers, but do divide them into pods that each have their own computing, power, and cooling, Claunch said. That makes it easier to pay as you go, to adapt to new technologies, and to increase energy efficiency by partitioning hot hardware from cooler hardware.

Green IT is important--and changing in its nature. It's not just a matter of buying efficient computers, but also of using computers to increase the efficiency of other parts of the business, Cearley said. For example, analytics can improve the efficiency of transportation of goods.

Next comes applications for mobile devices. "That has great potential for creating different experience or stickiness for your customers," Cearley said.

And mobile x86 processors from Intel and AMD could make software development easier, too, he added.

Social networking will happen internally and externally.

(Credit: Gartner)

Social-networking applications, broadly defined, also should be on company radar screens. The technology can take the form of internal corporate social networks, interactions with customers, and use of public services such as Facebook and Twitter.

Companies need to get a handle on what's going on--and potentially business purposes such as understanding how the corporate brand is perceived.

"Social network analysis will be moving from a somewhat arcane discipline to a much more mainstream component of your social computing strategy," Cearley said.

Are Web users going to get tired of paying for kitschy virtual items to pimp out each others' profiles? Social-site creator Ning sure doesn't think so. On Tuesday, it announced the debut of its virtual goods platform, so that network owners can offer virtual profile items for sale (much like Facebook does) and pull in half the revenue generated.

"From giving each other bloody chainsaws to shock troop dog tags, our members are having a blast recognizing each other for their contributions to the Lost Zombies Ning Network," said Scot Leach, founder of the "Lost Zombies" network on Ning, in a release provided by the company. "Creating custom gifts around our shared love of everything zombie adds a new level of fun and excitement for our members."

Some analysts have estimated that the virtual goods market will hit $1 billion this year.

Participating networks' members can buy the gifts for one another and they'll be displayed on the recipient's profiles. Payments are processed with PayPal, and then revenues are split 50-50 between Ning and the site owner after PayPal's transaction fees are taken into account. But while Ning site owners can design the gifts themselves, they won't be able to price them--all will cost 75 "credits," or approximately $1.50--something that might not go over so well with site owners who want to sell really expensive bloody chainsaws.

Ning, which says that a total of 1.6 million "networks" have been created with its technology and counts 36 million active users overall, launched a third-party applications platform last month.

The company was co-founded by Netscape creator Marc Andreessen, who justified a $60 million funding round last year by saying that the company was preparing for an economic "nuclear winter." Or maybe a zombie attack.

This post was expanded at 1:07 p.m. PDT.

Meez, a start-up that expanded last year from an avatar creation service into a full-out virtual world for teens, is touting some good news: it's been profitable since April and "every month is better than the last month," CEO John Cahill told CNET News.

Right now, Meez has about 13 million registered users, 3 million unique hits per month, and only 20 full-time employees plus about 10 contractors.

Where's the money coming from? Premium subscriptions, ads on the free version of the site, and virtual goods bought and sold with its internal "Coinz" currency--which includes a mobile virtual-gift deal with Verizon.

The company is making this announcement in conjunction with the debut of its MySpace application, which should be live on the News Corp.-owned social network shortly. It's Meez's first integration with a big social network.

"The MySpace app is designed to allow people from MySpace to use the Meez virtual world, and people using the virtual world on Meez.com will be able to integrate with the MySpace users," Cahill explained.

So why is the company's first social-network platform product built on MySpace, which has had well-documented drops in traffic? The demographic and culture are a better fit, Cahill said, pointing to MySpace's younger-skewing user base as well as a culture that encourages meeting new people online.

"We are working on a Facebook app as well, but every time we surveyed our audience, our audience was very much more MySpace-based than Facebook," Cahill said. "It's about discovery. It's about finding new friends. On Facebook, your friends actually tend to be your (real-life) friends."

Getting onto social platforms will mean that Meez is starting to compete for attention (and that other buzzword, "engagement") with social gaming behemoths like Zynga and Playfish. Brushing elbows with the companies that already have come to dominate entertainment on social networks is par for the course, Cahill insisted.

"We're all competing for Internet time," he said.

If you're running a business that has a presence in a virtual world, market research firm Gartner thinks you might want to make sure your employees' avatars aren't dressed like Lady Gaga at the VMAs.

"Companies with codes of conduct for other Web activities, such as blogging, should be able to extend those policies into virtual environments," a release Wednesday from Gartner announcing its new report "Avatars in the Enterprise: Six Guidelines to Enable Success" explained. "However, because 3-D environments add the visual dimension, they will need to make sure that their policies also cover dress codes."

That means your avatar might want to lose the sparkly pink torpedo bra, metallic leggings, and giant bat wings. When it's representing your company, that is.

The presence of businesses in virtual worlds like Second Life is nothing new--and has been much derided in recent years. But according to Gartner, it's still on the rise, particularly when it comes to training and virtual meetings. "Avatars are creeping into business environments and will have far reaching implications for enterprises, from policy to dress code, behavior, and computing platform requirements," the release explained. Gartner estimates that 70 percent of enterprises will be regulating the avatars of employees who use virtual worlds for business.

Two years ago, Gartner put out a study detailing the risks and pratfalls of doing business in virtual worlds, among them the difficulty of brand and reputation management. Now it's getting more specific: Gartner now says that employees ought to know how to operate their avatars properly, use the same degrees of discretion and professionalism that they do on social-networking sites, and even keep separate avatars for personal and professional use.