Panasonic recorded a net loss of ¥438.4 billion ($5.49 billion) in the three months ended March 31 compared with a loss of ¥40.7 billion in the same period a year earlier. Sales fell 8 percent to ¥1.880 trillion in the quarter, hurt by soft demand for flat-panel televisions and mobile phones.

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Yesterday, Nintendo reported an annual loss — its first in more than three decades — after revenues fell 36 percent. Hours later, five-year-old upstart Zynga reported nearly the opposite results, saying that first-quarter revenues jumped 32 percent year over year.

“Social, accessible and free are changing things,” said Zynga’s COO John Schappert in an interview. “We were built for this market; we live on free and in-app purchases. We never grew up on $60 games and consoles. It’s a different world, and it’s hard for some companies as they make the transition.”

For more than a year, the game industry has worried about the shift toward social and mobile from more traditional platforms like the home console. And now, after yesterday’s two drastically different financial reports, there is more than anecdotal evidence for concern.

Zynga continues to gain momentum and attract larger audiences with titles like FarmVille and CastleVille on Facebook and Words With Friends on mobile. On the flipside, Nintendo is facing yet another hardware cycle, with consumers waiting for its newest console, the Wii U, coming later this year.

Generally, experts believe that social and mobile games are expanding the overall games market. But yesterday it was hard not to see Nintendo’s first loss in three decades — totaling $531.1 million — as a hint of where things are headed.

Michael Pachter, an analyst with Wedbush Securities, is bullish on Zynga’s prospects but is not optimistic about the future of console games.

“Nintendo is living in the past, repeating what got them to where they are, and hoping that the recent downturn is a fad,” he said. “They aren’t adapting to the times, and it’s hurting them.”

To be fair, the companies approach the market completely differently, so it’s hard to compare the two.

Nintendo sells proprietary portable and home gaming units as well as the games that work on top of them. Meanwhile, Zynga gives away its games for free and lets them work across most computers and mobile phones. It makes money on advertising and microtransactions.

The two approaches lead to drastically different audience sizes.

Zynga said the number of monthly active users playing its games increased to 292 million in the first quarter, up 24 percent. The game company, which got its start on Facebook, is also expanding rapidly to mobile, reporting that it had 22 million monthly users on mobile, up from only 12 million one quarter ago.

Nintendo does not break out quarterly figures, but the number of new customers it reached during its fiscal year pales in comparison. Over the past year, it sold 13.53 million 3DS units, and expects to sell 18.5 million this year. Nintendo sold 9.84 million Wiis over the past year, down 35 percent.

This year, Nintendo is banking on the Wii U to revive the company and to better position itself against mobile devices like the iPad. The new console will come with a 6.2-inch touchscreen that will allow users to interact in a new way with games on TV screens. It plans to sell 10.5 million Wii units this year, including the Wii U.

Last year, Nintendo Global President Satoru Iwata told AllThingsD in an interview that he is not willing to gamble on free-to-play games, because consumers are willing to pay for Nintendo’s superior experiences and brands.

“If we were simply going to say okay, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future, and the entire industry will fold,” he said.

His point is not entirely lost.

Zynga makes far less money per user than Nintendo. In fact, the gap between them is enormous.

Each console or portable game unit Nintendo sells has the opportunity to generate hundreds of dollars in income, since console games cost $60 and portable games cost around $40 (not to mention the initial cost of the hardware).

Meanwhile, Zynga makes very little on each player. It reports a metric called average daily bookings per average daily active users (ABPU). Yesterday, Zynga said ABPU increased to $0.055 in the first quarter from $0.051 in the same period a year earlier.

For Nintendo to switch from one model to the other would be like giving up the farm.

And to be entirely fair, Zynga wasn’t profitable, either. In the first quarter it lost $85 million, primarily due to stock-based compensation.

The company has weathered a series of problems lately, particularly chip shortages stemming from manufacturing problems at Globalfoundries, the company formed by the spinoff of AMD’s manufacturing operations. AMD last month restructured its relationship with Globalfoundries, triggering a $703 million charge for AMD but giving it more freedom to make some of its products elsewhere. AMD also agreed to give up its remaining 8.8 percent stake in the manufacturer.

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The projected loss, more than double the ¥220 billion loss forecast in Sony’s previous outlook in February, would be the deepest so far in the electronics conglomerate’s 65-year history.

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A little more than a week ago, Morgan Stanley kneecapped Demand Media’s stock by downgrading the Santa Monica, Calif., online content company’s prospects.

Some worries: Pressure from algorithm-tweaking Google, upon which Demand relies heavily for traffic; worrisome drops in said traffic due to said tweaking; and not enough uptake on higher-quality, premium stories the company had promised in the fall.

Demand shares fell 6.5 percent that day, to close at $5.93.

It has recovered a bit to $6.13 today, but is still off almost 8 percent since the beginning of the year, and 71 percent from a year ago.

One irony to the tough call by Scott Devitt, of course, was that Morgan Stanley was the investment bank that had taken Demand public in January of 2011, at $17 a share.

In addition, the recent departure of three of the company’s six founders has also worried investors.

All this will presumably be on display today when Demand reports its fourth-quarter earnings. Wall Street analysts are expecting Demand to earn seven cents a share on an adjusted basis on an expected $81.95 million in revenue.

We’ll see after the market closes, as well as what its execs have to say about the key metrics of costs and traffic.

If the company’s revised net-loss forecast of ¥780 billion — its previous projection, in October, was ¥420 billion — proves accurate, it would be the second-largest ever for a Japanese manufacturing company. Hitachi Ltd. lost ¥787.34 billion in the fiscal year ended March 2009, as the financial crisis struck.

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The Japanese entertainment and electronics conglomerate reported a net loss of ¥159 billion ($2.09 billion) for the quarter ended Dec. 31, compared with a net profit of ¥72.3 billion in the year-earlier period. Revenue fell 17% to ¥1.822 trillion during the quarter.

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The company’s stronger-than-expected core earnings come about a year after predecessor Motorola Inc. split its smartphone and set-top box businesses from its mobile and networks operations. Tech giant Google is now in the process of taking over Motorola Mobility after it made a roughly $12.5 billion bid for the smartphone maker and its extensive patent portfolio.

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The company swung to a crushing €1.07 billion ($1.4 billion) loss for the three months ended Dec. 31st, down from a €745 million profit in the same period last year. Group sales dropped 21 percent to €10 billion from €12.65 billion.

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The Kyoto-based videogame maker also offered an even bleaker outlook for its full-year earnings for the year to March, saying Thursday that net losses will be three times greater than its projections in October as valuation losses on foreign-currency holdings from the strong yen continued to swell.

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“We do not take changes to our release schedule lightly, and this short delay will ensure that Max Payne 3 delivers the highest quality, groundbreaking entertainment experience that is expected from our company,” said Chief Executive Strauss Zelnick.

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Shares rose 4 percent to $9.95 after hours on the stronger-than-expected results. The stock had climbed 11 percent this year through the close.

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Excluding charges for compensation and other items, Salesforce reported earnings of 34 cents on sales of $584 million, up 36 percent. The problem was the quarter’s billings — the sum of revenue plus the change in deferred revenue was $567 million; 3 percent, or nearly $20 million, off the consensus.

But never fear, says CEO Marc Benioff. The company is well on its way to breaking the $2.3 billion revenue barrier, and it would be the first cloud software company to do so. The company also said it expects fourth-quarter sales in the range of $620 million to $624 million, which would be ahead of the consensus of $610 million. And it said that its expects earnings of 39 to 40 cents, which is lower than analysts had expected by a penny. One the brighter side, guidance for the 2013 fiscal year, which starts in February, was ahead of the consensus by 4 percent.

The larger question is the size of the cloud opportunity, for which Benioff is the ultimate salesman, spokesman and advocate. As successful as Salesforce has been in disrupting the traditional software model and giving companies like Oracle and SAP the occasional headache, what remains unclear is how much new services like Chatter.com — the social enterprise and collaboration features that Benioff can’t seem to stop talking about — are contributing to the top line, and whether they will justify the cost to build them.

Then there’s the valuation. Salesforce finished the regular session trading at a valuation of 615 times its trailing earnings, and it has been in sky-high territory for some time. Last month, Salesforce stock nose-dived after comments from hedge fund manager Whitney Tilson on CNBC that Salesforce might be due for a 75 percent drop, a la Netflix. Salesforce shares fell nearly 5 percent that day, to $123.

As I write these words, it’s trading six dollars lower than that, at $117. Tough day.

The Japanese entertainment and electronics conglomerate reported a net loss of ¥27 billion ($345.7 million) in its fiscal second quarter, compared with a year-earlier profit of ¥31.1 billion. Revenue was down 9.1% to ¥1.575 trillion.

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The Taiwan personal-computer maker had previously said that it expected a profit in 2011, but Acer Chief Executive J.T. Wang said Wednesday that inventory adjustments, falling demand for notebook PCs and a weakening global economy led to a change in outlook.

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Today, Demand Media beat Wall Street expectations in its second-quarter earning, growing revenue and lessening losses.

The Santa Monica, Calif., online content maker also announced that it had re-upped and expanded its advertising partnership with Google and also bought two start-ups in social media and advertising.

Now, it’s time for the inevitable conference call to explain it all to Wall Street analysts and the media.

2:02 pm PT: The call starts off with an unusually jaunty CEO Richard Rosenblatt, who quickly got to the real deal: Exactly how badly did Google’s changes to its search algorithm, under a program code-named Panda, hurt Demand’s content business?

Not much, says Rosenblatt, who reels off a list of things the company has done to improve its offerings, which have been dinged by many as, well, spam.

Rosenblatt was not having any of that, talking about removing 300,000 pieces of crappy content and also “quality improvements” with partners such as cheerily demented cooking goddess Rachael Ray. She might cook with spam — here is a delightful Spam Hawaiian recipe — but she ain’t spam!

2:13 pm: Now it is on to the acquisition of IndieClick. Essentially: It’s for the young people.

Then, international. Latin America Demand editorial via eHow en español! (Actually, the acquisition of Emergincast.com, an Argentine start-up. Coming soon to a blog site near you: ¿Cómo se hierve el agua?

Last, social media. Demand will be doing a lot more of it, like everyone else in the world, including more recommendations. I would really like it if some Internet company said it was going anti-social.

2:18 pm: The finance guy comes on, covering everything already in the press releases. Which is why I am cutting out here and getting a gluten-free doughnut at the Whole Foods store where I am writing this post.

It is as delicious as you might imagine a gluten-free doughnut can be. Which is to say: Not very!

2:32 pm: Q&A time from the Wall Street dudes — and, let it be said, they are all dudes.

The first question is about the “cleansing” of its cruddy content and if it is all flushed out.

It might be baked-on sludge, but Rosenblatt assures that Demand has it all figured out.

Then, a query about international and how the company decides what to pick. Algo, of course! And local content writers.

Back to the spam content: Does the need to have better content mean less of it? Kind of, since there is a lot more video. But still a lot of content churning out of Demand!

A question about Facebook and how to program Demand content into it. Good lord, it’s hyper-poking!

“It’s not clear the best way of how you expand into all these properties,” said Rosenblatt, specifically referring to its acquisition today of both IndieClick and RSS Graffiti.

The next question is how successful Demand is in the display and brand business, and how IndieClick, a premium ad company aimed at niche blogs, will be integrated in.

More on social media advertising’s future. Aaaghh, this is as obvious as a store-bought-crust apple pie baked by Rachael Ray.

Rosenblatt notes that its flagship site, eHow, is but one means of distribution, but Demand content is going all over the place and winging by people when they least expect it.

“Social is more effective … to try to find stuff you didn’t know that you needed,” says Rosenblatt, who also would not dis search as a means of discovery.

That’s important, since Google is a major traffic driver and advertising partner, when it is not terrorizing Demand and others with its search algo version of Defence Against the Dark Arts Professor Snape.

And presto, here comes a question about Demand’s Google ad relationship, which Rosenblatt touts nicely.

Of course he does. It’s tastier than spam, after all.

After the markets close tomorrow, Demand Media will report its second-quarter earnings.

Wall Street is expecting a solid performance from the Santa Monica, Calif.-based online content maker compared to last year.

The consensus of estimates by analysts is for Demand to lose one cent a share, which is much smaller than the 55 cents a share loss from the same period a year ago. It is also an improvement on a previous loss of five cents a share for this quarter that investors had been predicting.

Nonetheless, the company’s stock hit its all-time low yesterday, after a strong IPO in January. Since the summer, it’s been all downhill, with Demand shares off 50.4 percent since early May.

Since it went public, the stock is off 63.1 percent.

Sony, a consumer electronics bellwether for Japan and maker of iconic products like the Walkman music player, recorded a net loss of ¥15.5 billion ($198.7 million) in the quarter ended June. That compared with a net profit of ¥25.7 billion in the same period a year earlier.

Operating profit for the quarter was sliced by more than half to ¥27.5 billion from ¥67.02 billion a year earlier. Revenue declined about 10% to ¥1.49 trillion from ¥1.66 trillion.

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But it didn’t go on for long in the case of David Einhorn’s high-profile hedge fund Greenlight Capital, which today dumped an investment it made earlier this year in Yahoo on high hopes of the value of the Internet giant’s stake in China’s Alibaba Group.

That was before the ugly public fight Yahoo got into with Alibaba over its Alipay payment unit and especially with its voluble CEO Jack Ma.

In a letter to investors, Einhorn (pictured right) said the kerfuffle, which has hit Yahoo’s stock hard, “wasn’t what we signed up for.”

Yahoo shares are down just below two percent today and are now at $15.52 each.

Einhorn said in the letter that his fund had “a modest loss” in Yahoo, which sources said was about $20 million.

Einhorn had bought less than .65 percent of Yahoo, or about 8.5 million shares in March, which he said was due to his feeling that the company was undervalued with regard to its Asian assets.

Said Einhorn at the time: “We would not be surprised if YHOO’s 40 percent stake in Alibaba Group alone was ultimately worth YHOO’s entire current market value.”

Fast forward to today:

“The Partnership bought Yahoo! (YHOO) earlier this year based on a sum of the parts analysis, which included putting substantial value on its Chinese assets. Shortly after the purchase, the value of the Chinese assets came into doubt as the CEO of the Chinese unit hived-off a valuable subsidiary into a corporation that he personally controls. From there, the finger pointing started in every direction. This wasn’t what we signed up for. We exited with a modest loss.”

Here’s the full Einhorn letter, which appeared on zerohedge.com:

Qlet2011-02

Groupon’s S-1 filing for an IPO last month certainly got a lot of ink.

Unfortunately, much of it was negative, focused on several controversial parts of the document. Most scrutinized were large slugs of money taken out of the social buying site by its founders, as well as aggressive accounting terminology to make large losses look less, well, large.

Rattled by the intense media and analyst reaction to the filing, sources said the Chicago-based company commissioned a poll of its consumers and merchants to gauge the impact.

One source familiar with the survey said that top execs and its board wanted concrete reaction from key constituencies, instead of relying on “noise from the echo chamber” of Wall Street and Silicon Valley.

And, said several people who had seen the poll, it should probably come as no surprise that the impact of the drumbeat of Groupon-is-doomed news on merchants and consumers was low, with only one percent saying that they had formed a negative opinion of the company from the filing.

That, of course, does not mean that those important groups for Groupon aren’t disgruntled about a whole laundry list of other issues.

But — for now, at least — an S-1 with some warts isn’t one of them.

Whatever the case, Groupon will continue to face scrutiny as it moves to amend the filing after comments from government regulators, and also when it reports its latest financial results soon for the three months ended June 30, 2011.

And those are numbers that everyone will surely be paying attention to.

The Japanese electronics giant said it posted a net loss of ¥388.80 billion ($4.74 billion) during the January-March period, from a loss of ¥56.57 billion in the year-earlier period.

The tax asset writeoff that translated into the hefty net loss is an indication of how the March 11 earthquake and tsunami has shattered Sony’s expectations for a robust current fiscal year.

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The Japanese entertainment and electronics conglomerate cut its net-profit outlook for the fiscal year that ended in March to a ¥260 billion ($3.19 billion) loss from the ¥70 billion profit it forecast in February.

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The Wall Street Journal reported earlier tonight that Microsoft–in what would be its most aggressive acquisition in the digital space–was zeroing in on buying Skype for $8.5 billion all in with an assumption of the Luxembourg-based company’s debt.

Sources told BoomTown tonight that the deal for the online telephony and video communications giant is actually done and will be announced early tomorrow morning.

The purchase–which has been spearheaded in closely held negotiations by Microsoft CEO Steve Ballmer, with an assist from Business Division CFO Amy Hood and top dealmaker Charles Songhurst–is a bold move for the software giant and its biggest acquisition in more than three decades.

The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.

With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype preferred to highlight, were $264 million.

And–let us not forget–Skype’s debt is $686 million. Silver lining: That’s slightly less than Microsoft’s Online Services division losses in its most recent quarter!

But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype, which had been headed bumpily toward an IPO until now, will apparently be integrated into Microsoft’s Windows Live and other online communications efforts in both the consumer and enterprise arenas, sources said.

Think Kinect connecting.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

A 70 percent stake in Skype was sold in 2009 to investors such as Silver Lake Partners, Andreessen Horowitz, and the Canada Pension Plan Investment Board. It then valued Skype at $2.75 billion.

So, obviously, the deal is a big win for them. In addition, at the time they made their investments, Skype was a huge legal mess with lawsuits flying.

Skype has since gotten cleaned up enough to attract Microsoft.

Other suitors have looked at Skype, including Google, although acquisition interest by Facebook was very much overblown, said several sources.

Interestingly, Microsoft’s new smartphone partner Nokia also held meetings with Skype’s CEO Tony Bates, a former Cisco exec who arrived at the company last fall.

Interest in Skype by Microsoft was first reported by GigaOm’s Om Malik on Sunday.

Tune in at 5 am PT for the official press release, apparently, and lots and lots and lots of analysis of whether Microsoft paid too much for Skype.

Yahoo has lost another one of its top advertising sales execs, Mitch Spolan, to a hot start-up of the moment–this time to LivingSocial.

The move by Yahoo’s head of North American field sales is the second major loss by the Silicon Valley Internet portal to a social buying site. Another Yahoo sales lead, Lee Brown, left Yahoo late last year to head sales at Groupon.

Spolan–who is a long time Yahoo sales exec, having survived a myriad of new bosses and management turmoil over his dozen years there–will become SVP of national sales at the Washington, D.C.-based LivingSocial.

In an interesting irony, he will be competing directly with Brown, who used to work for Spolan at Yahoo, in the red-hot online local discounting space.

Another irony: For the first time in 12 years, Spolan will be missing Yahoo’s national sales meeting, which is next week and where his latest boss, U.S. head Ross Levinsohn, will be selling the troops on the changes he will be making to revitalize the company’s advertising business.

Here’s the official press release:

LivingSocial Expands Executive Team Appointing Former Yahoo! Executive to Senior Vice President of National Sales

Local Commerce Leader Appoints Mitch Spolan to Build Out Team, Helping Merchants Nationwide Leverage the Powerful LivingSocial Platform

Washington D.C., March 8, 2011–LivingSocial, the online source for people to find handpicked experiences at a great value, today announces the continued expansion of its executive team with the appointment of Mitch Spolan to senior vice president of national sales. Spolan will lead development of LivingSocial’s national accounts and will expand the nationwide team to work with advertisers and marketers to better leverage LivingSocial’s powerful marketing platform. Additionally, he will focus on creating new opportunities to monetize LivingSocial’s assets through innovative, consumer-friendly advertising models.

“We are very excited to have Mitch join the senior executive team. Mitch’s extensive experience developing new online advertising opportunities and working with top marketers will help accelerate national brands’ adoption of the powerful LivingSocial platform,” said Eric Eichmann, chief operating officer of LivingSocial. “His hands-on approach, creativity and technological know-how will play an integral role in helping LivingSocial build upon its leadership position in the local commerce space. “

Spolan brings more than a decade of media sales experience to his position as LivingSocial’s senior vice president of national sales with the majority of his professional tenure residing with Yahoo!. Most recently he served as Yahoo!’s vice president of North American field sales, where he led his team to grow revenue and share with Fortune 500 clients by redefining creative opportunities. Spolan began his career as an architect and moonlighted as CEO of Innovation Solutions, an interactive advertising agency he founded specializing in creative design, media buying and planning for small businesses across the country.

“I’ve been following the group buying space from its beginning, both from an industry perspective and as a consumer myself. It’s rare that you get the opportunity to see a new industry born,” said Spolan. “LivingSocial has created a new medium where both marketers and consumers are big winners. I look forward to continuing to innovate on this incredibly powerful marketing platform as LivingSocial continues to dominate the local commerce space.”