Zynga, Facebook Not the Only Scam Pushers Online

Facebook game developer says it has cut scammy offers out of its ad equation

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    NEWSLETTERS

    TK
    Justin W. Davis
    Zynga's out of the offer scam game, but congress is investigating similarly scammy business practices.

    Zynga, the maker of popular Facebook games like FarmVille, now says that it receives 90 percent of revenue directly from users -- after the company came under pressure to stop promoting "offer scams" that tricked users into signing up for expensive subscriptions.

    The numbers were released to clear up any confusion about the company's business model, and with the company possibly valued at $1 billion after Electronic Arts acquisition of Playfish for $400 million, the details could also be revealed to reassure potential purchasers of the company -- and investors eager to cash in on that possible payday.

    But Zynga, which along with Facebook and other players is facing a class-action lawsuit over the once-lucrative ads, isn't the only company that is under scrutiny for shady business practices.

    The federal government is looking into a similar scheme to defraud Web surfers that's popped up on sites like Orbitz, Priceline, FTD and Classmates.com.

    Affinion, Vertrue, Webloyalty offer signups from payment pages on other Web sites that may look like a free discount on purchases, but actually sign people up for "loyalty programs" -- and monthly charges.

    The take? $1.4 billion.

    And while Continental Airlines has since stopped participating, some of the Web sites that profit from the practice have less remorse than Zynga, essentially blaming the victims for not reading the fine print.

    Jackson West wonders if we shouldn't change the name to "misinformation economy."