On Tuesday, Zynga appeased investors by beating its already lowered expectations for the period and exceeding analysts’ expectations.

It also showed critical progress on mobile, where one-quarter of the company’s monthly active users are now playing its games — that’s 72 million people out of 298 million monthly average users in total, making for a very large market across both Facebook and smartphones.

Just yesterday, there was some additional good news for the struggling games company.

New Jersey Governor Chris Christie gave conditional support to in-state Internet gambling, a market that will benefit Zynga as it looks for potential new revenue sources.

To date, most of Zynga’s real-money gaming efforts have been focused in the U.K., where online gambling has been legal for a while. Zynga confirmed on Tuesday that it still plans to launch games there during the first half of the year. Additionally, it said its real-money games would also be available on Facebook in the U.K., where the social network has only conducted a few minor tests to date.

Zynga’s stock soared 11 percent today, or 34 cents, to $3.43 a share. The stock has not traded that high — at least consistently – since July. While today’s rise is encouraging, shares are still down more than 75 percent from a high of $15.91.

Other gambling stocks also jumped following the news out of New Jersey, including Caesars Entertainment, which saw its shares rise 38 percent, or $3.84 a share, to close at $13.91.

What’s particularly important to note about the measure that Christie has endorsed is that it would permit a kind of reciprocity with other states where online gambling is legal. Zynga has already begun the long process of getting licenses in Nevada, so conceivably it would not have to jump through as many hoops to begin operating in New Jersey. And reciprocity would be essential to making a big enough market.

While many investors are obviously thrilled about the prospects of online gambling, it’s hard to know how much revenue it will produce. Dennis Farrell, a gambling-industry analyst for Wells Fargo, told The Wall Street Journal that online gambling could generate between $650 million and $850 million in annual revenue for the industry in the near term, assuming around 5.8 million people gamble on the sites.

As evidence of the impending launch, two websites have already gone live in the U.K. to start spreading the word. One is dedicated to poker, and the other features a variety of casino games, like slots, bingo and roulette.

But during Zynga’s fourth-quarter conference call yesterday, the company disclosed a new piece of information: Its real-money casino efforts will not be limited to standalone websites. In fact, Zynga will also be leveraging the Facebook platform.

Zynga Chief Revenue Officer Barry Cottle confirmed to AllThingsD: “We’ve been working with Bwin to expand the platform to ultimately be able to offer real-money gaming across the Web, PC download, Facebook, and then hopefully mobile, as well.”

Enabling Zynga to conduct real-money gaming in the U.K. is significant for both parties.

Zynga is by far the largest game maker on the social network, and its poker game is the third-most-popular game on the platform. By allowing Zynga to take and pay out real money in the U.K., Facebook is opening the floodgates to gambling. Likewise, by being allowed to operate poker or other casino games on Facebook, Zynga will be able to tap into its existing network of players more easily than it could from a third-party site.

“Poker on a global basis is a very successful franchise, with 37 million [monthly active users],” Cottle said, although he did not know the specific number of players in the U.K.

This will not be Facebook’s first foray into real-money gaming in Britain, where online gambling is legal for adults over the age of 18. In August, it allowed Gamesys to launch bingo, marking the first and only game on the network, but now that seems like a very small test. At the time, Reuters reported that Facebook had no plans to offer gambling in any other countries or with any other partners.

But a Facebook spokeswoman confirmed yesterday that things have changed, and that more rollouts were coming: “Real-money gaming is a popular and well-regulated activity in the U.K., and we are allowing a few developers to offer games there to adult users on Facebook Platform in a safe and controlled manner.”

Online gambling continues to be unregulated in the U.S., except for in a small number of states, including Nevada. Zynga has begun the arduous process of getting licensed there, but it will likely take months, if not more than a year. Even if it gets approved, it will only be able to operate in that state, so it’s unlikely that Zynga or Facebook will roll out gambling in the U.S. anytime soon.

During Zynga’s conference call, the company confirmed that its two websites — ZyngaPlusPoker and ZyngaPlusCasino games — will launch by the end of June. The additional platforms, including PC download and Facebook, are also expected to launch during the first half of the year, but not necessarily at the same time.

As a reminder of why Zynga is getting into the real-money space, Cottle said, “It was in response to our players. We did some research, and a subset of our players were either already playing or wanted to play [real-money games], and trusted the Zynga brand. Given that we have the largest online poker game in the world, it seems natural to offer that as an extension.”

Earlier today Yahoo reported fourth-quarter earnings that beat analyst estimates, on still-flattish revenue.

Still, up is up, even if it is not really that much up, so Wall Steet bid up shares of the Silicon Valley Internet giant in after-hours trading.

Now it’s onto the conference call with investors for CEO Marissa Mayer:

2:02 pm: Before the call, you can hear Mayer complaining about the goofy music played during the pre-conference call waiting time.

“We have to get better music,” she says to some minion. “This is not good music.”

Music to my ears! I say we get Beyoncé, lipsyncing or not.

The call starts quickly after that, with the ever-eager Mayer leaping right in with the fourth-quarter news, which is not all that bad.

It’s the first full year of growth in a while — though not the first quarter-to-quarter increase — even if it is only a very modest two percent increase.

That compares to industry-wide gains in revenue of many, many, many times that, but for Yahoo this is cause for a parade. A small parade, with good music, but a parade nonetheless.

“It’s hard to believe this is only my first full quarter here at Yahoo,” says Mayer in an upbeat tone.

She notes that her focus on product excellence and user experience was continuing, with some “early positive trends” in both products and people.

Mayer then list a series of moves, from the free food and better smartphones for employees to the addition of well-regarded entrepreneur Max Levchin to the board to the refreshes of Yahoo Mail and Flickr to the acquisition of some sassy new mobile startups.

Mayer also notes that the company under her purview had removed “385 of highest priority obstacles,” although she did not name any specifics.

I imagine what No. 332 is: Switching out the iceberg lettuce at the URL cafeteria on Yahoo’s Sunnyvale, Calif. HQ campus with some tasty organic mesclun as they have at Google, from whence Mayer came.

Better roughage means better returns!

2:14 pm: Mayer turns the call over to CFO Ken Goldman, also a newbie. As usual, he runs through the numbers that are already in all the releases already. But I am enjoying his New England accent, hoping he will say the slight increase in revenue was “wicked” good.

Goldman, in fact, calls the revenue increase “modest,” which is true, although it sounds like “mah-dist.”

What’s not mah-dist is how much stock Yahoo has bought back, using its windfall from the recent sale of assets in China. It’s $1.45 billion, with more that that left to use for more share buybacks. That should keep Yahoo’s stock up nicely.

Goldman also talks about increases in the company’s search business, although notes that the Microsoft relationship is still not the most fantastic.

He speaks more effusively of Yahoo’s Asian partners, including Yahoo! Japan and China’s Alibaba Group. It’s deserved, since they have been the company’s treasure trove against its meh core performance in recent years.

Not so tasty is the problem Yahoo has with a big-money contract dispute in Mexico, which Goldman reiterates is “without merit.”

2:28 pm: Goldman moves onto Yahoo’s cash position, which is strong and which he says is going to be used to make the company better.

Mayer is back on board, talking about key focuses over multiple years.

She says Yahoo needs a “chain reaction of growth,” which needs to be fueled by a dozen new products that become a daily habits for consumers to increase usage and other metrics.

A nuclear bomb explosion is not exactly the best metaphor for a company’s turnaround, but in Yahoo’s case it is probably a pretty good one, given how stubborn its decline has been.

Mayer then switches the metaphor to one she recently used about “returning to the roots” of Yahoo.

Actually, mixing the metaphors, Yahoo has to blast some significant roots that have gotten in the way of its innovation over the years.

“The best is yet to come,” promises Mayer, in what she says will be a multi-year effort.

Now onto questions from the analysts!

2:40 pm: The first question is about commercialization of its products. Mayer answers she is both pro-advertising and anti-ad — meaning they are good when they add to user experience and bad when they do not.

There will be slight margin declines due to this, which is the real point of the query, which Goldman says will not be too impacted.

The next question is on the weaker performance in display ads and whether mobile ads can ramp up quick enough or not.

Yahoo is not breaking out mobile revenue numbers as yet — it’s not impressive as yet, so that’s what’s going on there — although Mayer points to the number of mobile users increasing to 200 million now.

As to the declines in display, Mayer gives a non-answer, but it is likely due to big changes that new Yahoo COO Henrique De Castro has put into place in the way it sells ads and which AllThingsD.com previously reported on. Mayer earlier in the call had confirmed those changes.

The fact of the matter — which is just what the analyst was asking about — is that Mayer simply has to improve display revenue, which is Yahoo’s core business.

Mayer then addresses the issue of not providing usage metrics anymore. Yahoo has withheld a lot of them since she has taken over, and she says it is because they are not indicative of metrics that, well, she thinks you need to know.

Instead, Mayer points to other metrics that she feels are better, such as number of ads sold and price per click on search.

Speaking of search, the next question is about that. What can Mayer say — and she does — but that Yahoo must also improve in that area. Indeed, it is lucrative low-hanging fruit for the company.

Here comes an interesting observation she makes based on a question of mobile versus desktop, which Mayer says should not be separated as two areas as consumers don’t think that way.

Yahoo is tuning up a dozen products, she says, having started with Yahoo Mail and its Flickr photo-sharing app.

2:54 pm: Mayer is not saying which of this dirty dozen is next to get a makeover.

“We’re investing in small, nimble, excellent teams,” says Mayer, who then tries to reference a famous Margaret Mead quote, but ends up mangling it a bit.

It is, for the record: “Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”

This is true, which might make some Yahoo staffers nervous, since Mayer’s recent stack ranking of them means she can start on employee layoffs anytime she likes to separate the wheat from the chaff.

3:01 pm: Whoo-whee, this is going long and I am getting weary. Mayer has to be some kind of digital Energizer Bunny — she just flew in from the World Economic Forum in Davos, Switzerland and moved right into the prep for the Q4 earnings.

Tomorrow, she is presumably off to Las Vegas, where Yahoo’s global sales conference will start and she will doubtlessly be making an appearance.

I am exhausted simply by walking up and down the stairs at my house.

The next question is about third-party publishers and ad tech on mobile.

“Mobile monetization is new for everyone,” she says correctly, making the point that no one knows what is going to shake out.

She uses — as she has used — the example of when people thought search was not a moneymaker until Google proved otherwise.

The problem is, of course, that Google is Yahoo’s biggest rival in this new mobile ad arena, along with Facebook and many others. And Google, as its recent results showed, does know how to make money compared to Yahoo.

The next question is about mobile monetization eating into desktop revenue.

Mayer notes that Yahoo has hired 120 people with computer science degrees in the quarter to work on that area.

In other words, get ready for a symphony of geeks to return Yahoo to relevance.

Would they can pull it off, as that would be a tune worth listening to.

Speaking of something worth listening to, here is a video of Diana Ross’ song, “Chain Reaction,” to enjoy:

I get “native ads.” Those are ads that give Web publishers a chance to say they’re not selling ads, because they’re selling stuff that people want to look at, at least theoretically. I think that can work in some formats — especially with video.

But these things never seem to work when it comes to print, or print-like Web publications. Not because they fool readers into thinking they’re reading “real” content. But because they seem like lousy imitations of “real” content.

I can’t figure out why that is. Making “real” content, that readers would find inherently interesting, is a specific skill, but not a rarefied one. For whatever reason, though, these things just don’t work as ads, or as anything else.

That held true for magazines and newspapers in the olden days, and it holds true now. For instance: Check out the “sponsor content” that the Atlantic is still running, after apologizing for its Scientology blunder — this stuff from IBM is unreadable. Ditto for Huffpo’s work for Prilosec (I think? The URL seems to be the only hint on this one).

Even the sharp minds at BuzzFeed, blessed with a spooky ability to make click-worthy stuff, end up falling flat when asked to create fake content for clients like the Nevada Commission on Tourism.

Still, I’m all for ad revenue, because it helps foot the bill for typers like me. And we’re still in frontier times when it comes to Web ad rules, so we’re going to see lots of experiments for a long time.

So here’s one easy ground rule for Web publishers and advertisers to keep in mind as they draft their next advertorial campaign: If the fake article you’re going to write can be easily, mercilessly parodied with a couple keystrokes and some nifty Photoshop work, try something else.

This week in Las Vegas, the new management team running Yahoo — including CEO Marissa Mayer — is at International CES to schmooze with big advertisers and convince them that Yahoo is the place to put large chunks of their marketing budgets.

One of the longtime selling points of the company is the sheer size of its audience, especially for the key money-making parts of the site — the homepage, Yahoo Mail and search.

But private stats from comScore show that those three areas have continued their longtime decline over the last year, in some cases dropping significantly. In November and December, for example, compared to the same two months a year ago, U.S. search was down 28 percent and 24 percent respectively, while mail was down 16 percent and 12 percent.

This matters a great deal, since the troika of homepage, mail and search have been the critical driver of the Yahoo value ecosystem for advertisers.

The impact of those drops is felt all over Yahoo, whose music, movie, games and travel site have also seen massive drop-offs in traffic year over year in those same months.

Stopping the decline is critical for Yahoo, since Mayer herself has underscored the need for size in her pushing for new businesses at Yahoo that are 100 million users in size and/or have revenue prospects of at least $100 million.

While this is a lofty vision, the reality of traffic falloffs on key properties is a vexing issue, especially since they remain its main source of revenue and also an important element in launching future products Mayer is promising will turbocharge the company.

It’s not that Yahoo is not huge, especially compared to most sites on the Web.

As one of the top Internet brands, according to a recent Nielsen report, the average number of total monthly unique visitors for the longtime Silicon Valley Internet company in 2012 was 141.6 million, No. 3 behind Google and Facebook in the U.S. market. Similar rankings were reported by comScore, which placed Yahoo at the No. 2 spot after Google, with 171.4 million monthly visitors in November.

But, for many years, traffic to those important consumer destinations of Yahoo has been on a clear and unstopping decline, statistics (usually from comScore) that the company nonetheless always dutifully puts in its earnings slides — see below — for investors to get some idea of the major and vexing issues facing the company.

That was suddenly ended in the last quarter with the engagement slide removed from Yahoo’s public deck entirely. Not all companies include such stats, so when I inquired as to why the company had made the change, Yahoo PR never returned my phone call.

But it’s not hard to guess the reason for the shift — the numbers were not good and they called more attention to Yahoo’s glaring challenge, which is getting users reengaged with its products by creating what Mayer has dubbed several times “delightful” experiences.

According to numerous sources, that has also been the case within the company too, with the new regime restricting an internal transparency initiative pushed by former Chief Product Officer Blake Irving that shared product performance numbers with the top 100 leaders at Yahoo.

And while it’s an interesting strategic choice, several sources inside the company this week urged me to get ahold of increasingly worrisome numbers from comScore — available to its private clients — comparing November 2011 to November 2012 and also December 2011 to December 2012 at home and work in the U.S.

So I did, getting the same stats from numerous sources — numbers that a spokesman for comScore confirmed were correct.

And, as promised, they are worrisome indeed.

In November 2012, compared to November 2011, the monthly unique visitors to the homepage declined 17 percent to 91.8 million from 110.9 million; Yahoo Mail dropped 16 percent (from 92 million to 77.7 million); and Yahoo search dropped 28 percent (from 93.3 million to 66.9 million).

Also off significantly for all three areas, often by one-third, were a plethora of other stats: Percentage of reach, total minutes, total page views, total visits and more.

One of the only bright spots for Yahoo was the relatively small Flickr sites, which were up 37 percent — 26.7 million versus 19.4 million — in unique monthly visitors year over year. The photo-sharing site — which has been getting a much-needed refresh — was also up in all other stats.

But Flickr — which Mayer (pictured here) has laudably touted and supported after years of inexplicable neglect — is not a money-maker for Yahoo, even if its return does burnish the company’s tech and innovation cred.

In December 2011 to December 2012, the homepage was more stable, gaining four percent in monthly uniques from 109.4 million to 114.2 million, but with other key stats both rising and falling. Total visits were up 14 percent, for example, while average minutes per visit was down 13.6 percent.

But the trouble for mail or search continued, off 12 percent (89.9 million to 78.7 million) and 24 percent (88.7 million to 67.4 million) respectively in monthly uniques, with similarly major declines in all other stats.

Mail recently got a refresh too under Mayer, despite some recent security glitches, so new stats will show if that will help stem the declines. Search is another story all together, with Yahoo in what can only be described as a dysfunctional partnership with Microsoft that numerous sources tell me Mayer is seeking to end.

The homepage, too, is undergoing a redo, with a design that has a decidedly more mobile and social feel, and pushing an ethos of Yahoo becoming a hub for content discovery. It is hoped the new look will boost traffic relatively quickly from its current downward trajectory.

To be fair, there can be lots and lots of reasons for these declines, although most of Yahoo’s competitors are, at worse, seeing a flattening of growth and not outright declines.

And sometimes Internet sites complain that services like comScore undercount, although Yahoo had previously used the firm in its public documents. More to the point, as multiple sources within the company note, the stats are directionally correct in that they closely track with internal Yahoo numbers.

Which is to say, traffic is going down rather than growing. That is clearly why Mayer has loudly stressed mobile since arriving at Yahoo, an area not included in these numbers that many sources said has strong growth to about 70 million monthly unique visitors via its apps and mobile-enabled Web offerings.

But unlike the homepage, mail and search — which push and pull traffic all over Yahoo and are responsible for most of its current monetization — mobile also makes very little money now. And Yahoo — unlike Facebook, which recently did — does not break out mobile results.

So, it will be interesting to see if the company does so when it reports fourth-quarter earnings on January 28 and also if it says anything about continued traffic declines of its traditional Web business in the period and the impact on revenue.

Still, there are lots of ways to counter declining or flat revenues, even with declining traffic — via cost cuts, efficiencies, charging more and selling assets (as Yahoo did in the last quarter). And Yahoo has ably managed to keep its operating margins growing over the years, despite both the declines in traffic and moribund growth in its revenue.

But the real and only fix is the drastic fix to existing tentpoles Yahoo has and the creation or acquisition of products that excite consumers and, therefore, advertisers.

It’s not an easy thing, of course, as well-known venture capitalist Ben Horowitz recently wrote in his blog about the need to focus on products over building and improving culture — one of Mayer’s other big initiatives at Yahoo.

Wrote Horowitz in what I consider one of the clearest articulations of what it takes to win for startups, as well as big companies like Yahoo:

“The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing. Two or three times better will not be good enough to get people to switch to the new thing fast enough or in large enough volume to matter. The second thing that any technology startup must do is to take the market. If it’s possible to do something 10X better, it’s also possible that you won’t be the only company to figure that out. Therefore, you must take the market before somebody else does.”

If you want to take a gander, here are some more of those old Yahoo quarterly engagement slides, which were recently eliminated from its presentations:

(Note: I reached out to Yahoo’s outside PR firm — since they do respond to queries — and also some company execs to get a comment on this story, but so far there has been none.)

As I had previously reported, Yahoo’s key business unit — its advertising sales force — is now getting details of a reorganization by its new leader, COO Henrique De Castro.

In making the changes, just weeks ahead of Yahoo’s annual sales conference in Las Vegas on Jan. 21, De Castro is borrowing rather heavily from the set-up of the powerful ad business at Google, from whence he came.

By shifting the sales organization to a “category” model, sales reps at the Silicon Valley Internet giant will sell all of Yahoo’s ad products, as well as its search offerings, across channels in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search, designed to avoid vertical conflict. Thus, the sales staff have built up advertiser relationships across many areas, which will not work in the new system.

Sources inside the company said regional leaders will now be shifted to running various verticals. There will be support specialists for those areas, too.

Mark Ellis, who was most recently VP of North American sales and global partnerships, will pay a key role in the new org, said sources. It is not clear, though, what role Peter Foster, who has headed audience advertising, will play. Another high-ranking exec, Keith Kaplan, has apparently been shifted to focus on agency relationships.

As I had previously written, there are many different ways to organize sales, but making such major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

According to numerous sources inside Yahoo, the changes are causing some measure of worry and confusion across the salesforce at the company, since it comes after a lot of wrenching changes over the last year.

That includes the departure of well-regarded Chief Revenue Officer Michael Barrett in mid-October, after De Castro got the COO job. He has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in its sales organization.

He will likely have a more high-profile next week at the International CES, the huge annual consumer electronics show taking place in Las Vegas, along with new Yahoo CEO Marissa Mayer, who was a top product exec at Google. The pair is planning on meeting with major ad clients while there, which is their first significant outreach to marketers since taking their new roles at Yahoo.

De Castro had outlined the new ad reorg plan immediately after a multiday offsite with top sales leaders several weeks ago, and said the changes would come at the very beginning of 2013.

The ad staff at Yahoo begin to hear of the changes on Friday, so it looks like De Castro has met his deadline.

So far in the six-month reign of Yahoo CEO Marissa Mayer, there has been a pile of attention paid to the flashy cultural changes (free food!), much-needed rehauls of key mainstays (Flickr, Yahoo! Mail, homepage), a focus on attracting entrepreneurial talent (Hey, we got Max Levchin to join the board!) and, of course, the frequent mention of mobilemobilemobile by the former Google product exec.

But on the topic of where the Silicon Valley Internet giant’s search and display advertising business is headed — which is, of course, its key revenue and profit generator — it’s pretty much been crickets.

No longer, it seems, according to multiple sources inside and outside Yahoo. Mayer is planning a series of appearances at the upcoming Consumer Electronics Show — which is taking place in Las Vegas in less than two weeks.

That includes sitting for a high-profile fireside chat with Starcom MediaVest Group Global CEO Laura Desmond in front of several hundred ad clients on Wednesday, January 9; organizing a plethora of one-on-one meetings; and throwing a Yahoo dinner party, as well as angling for invites to key parties thrown by others, such as MediaLink’s power player dinner on Tuesday, January 8.

As I previously reported, the company is planning on having this much more prominent presence there in order to reset its sometime rocky relationship with advertisers.

And, not surprisingly, its big weapon at the giant annual confab will apparently be Mayer, who has not yet interfaced significantly with the company’s big ad clients since taking the top job in July. At CES, sources said, Yahoo is hoping the “Marissa Halo” — i.e. the excitement around the decidedly telegenic exec — will help boost its business.

It’s important, since big agencies and advertisers have privately been grumbling about the lack of outreach by Yahoo and also how much more active execs at rivals such as Facebook, Google and AOL have been.

More than one source close to Yahoo said the dissatisfaction was being heard loud and clear at the company. “[Everyone will] take it as an opportunity to vent (again), while Yahoo promises a new beginning,” said one exec.

New beginnings will again be the case, though, with new COO Henrique De Castro also in place. He’s been making a series of moves to rejigger the ad business at Yahoo since he got there earlier in the fall, also from Google, including shifting its sales process to a category model.

In addition, Yahoo execs have continued their noodling on whether or not to make significant ad tech purchases — with no major deals in place yet — along with improving the creaky performance of the company’s own owned-and-operated offerings.

It’s all in the hope that advertisers and agencies will reconnect with Yahoo after the nearly consistent CEO changes over the last year. For those keeping score, after Carol Bartz was fired in the fall of 2011, CEO Scott Thompson made his debut at CES in early 2012, touting Yahoo’s data prowess before being ousted only months later. He was followed by renewed efforts toward marketers by interim CEO Ross Levinsohn.

And now there’s Mayer.

Interestingly, while many major ad players are looking for more specifics about how Yahoo will improve its mobile, search and data products to give better insights to advertisers, they also are simply wanting to hear Mayer’s plans for Yahoo.

“What I don’t see yet is what the vision for Yahoo is, articulating the bigger ideas than just presenting an assemblage of products,” said Rob Norman, chief digital officer of GroupM Global. “And what everyone would still like to see is what is the escape route from being a portal or even reemerging from what that means, so I am really interested in what she has to say.”

Added another top ad exec: “She really has not said anything yet about how she plans to capitalize on Yahoo’s strengths over the next year in the ad space. People are genuinely excited about Mayer, but the stakes are still high for her since everyone feels as if they have already given Yahoo a lot of extra chances.”

High stakes, indeed. But, then again, it is Vegas.

Zynga Plus Poker and Zynga Plus Casino are both viewable in the U.S., but once it goes live, players will have to be located in the U.K. and over the age of 18 to legally play.

Right now, the sites are being used primarily as a marketing tool to get the word out and to start collecting email addresses ahead of the official launch.

A Zynga spokeswoman declined to comment.

One thing that’s noticeable is how much social is being emphasized. The tag lines for the respective sites are “Casino For The People” and “Poker For The People.”

Today’s launch shows that Zynga is making at least some progress on its promise of expanding into online games where players can win and lose real money, from its core business of selling virtual goods on Facebook. Both sites say that the games will go live in early 2013, which lines up with what Zynga’s CEO Mark Pincus had previously promised.

In October, the San Francisco company announced an exclusive partnership with bwin.party, which enables it to launch a real-money gaming site in the U.K. The casino site is expected to launch with 180 games, including slots, roulette and blackjack. Additionally, Zynga’s FarmVille brand is expected to be used for one of the slot games.

For now, Zynga’s casino ambitions will have to be limited to markets where gambling has been legalized. It has filed an “Application for a Preliminary Finding of Suitability” in Nevada, but the process could take up to 18 months. If Zynga is found suitable, a license could take another two to three months. Even then, it still would only be allowed to operate online in one state.

During its last conference call, Zynga declined to say how much revenue the real-money gaming sites could generate, but based on the company’s current stock price, it seems investors are being cautious. Zynga’s shares fell 5 cents, or two percent, today to $2.33 a share.

In what will be a major shift in how the Silicon Valley Internet giant sells online advertising, Yahoo’s new COO Henrique De Castro has briefed employees on a plan to move its sales organization to a “category” model, according to numerous sources close to the situation.

Simply put, that means its sales reps will sell all of Yahoo’s ad products, as well as its search offerings, in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

This is how Google, where both De Castro and CEO Marissa Mayer recently worked, conducts its ad sales efforts. (After copying free food and smartphones, staff evaluation efforts and more, What Would Google Do seems to be strategery at Yahoo these days.)

In contrast, Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search.

The move from regional to vertical is a “seismic shift,” said one source quite accurately. That’s because Yahoo’s go-to-market efforts have been designed to avoid vertical conflict and its sales staff have built up advertiser relations across many areas. In a vertical organization, those reps will be forced to give up these long-term relationships with marketers, some of which have been built over years.

There are, of course, many different ways to organize sales — and each has its fans and detractors. But one thing is clear: Making such a major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

The change might also result in some attrition among the sales staff, said sources, although many at Yahoo are expecting that De Castro will bring in his own execs from outside to help with the transition. (One interesting name I heard floated was former Googler Penry Price, who was close to De Castro when they both worked there. He is currently president of Media6Degrees, an ad targeting start-up.)

De Castro (pictured here) will need all the help he can get as he overhauls Yahoo’s sales efforts. Well-regarded Chief Revenue Officer Michael Barrett left Yahoo in mid-October after De Castro got the COO job.

His departure has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in sales (more on that to come).

Currently, the key ad execs at Yahoo under De Castro are Peter Foster, who heads audience advertising, and Mark Ellis, VP of North American sales and global partnerships.

De Castro outlined the new ad org plan to staff immediately after a multi-day offsite with top sales leaders last week, at which Yahoo’s acquisition options in the ad tech market were also discussed.

Sources said De Castro noted that the changes could take place as early as January 1.

De Castro is also planning to have Yahoo’s annual global sales meeting for the end of January in Las Vegas. Last March, the gathering — then set for about 1,300 advertising staffers in Florida — was cancelled due to a restructuring under ousted CEO Scott Thompson.

In addition, sources said, Yahoo is planning on having a much more prominent presence at the upcoming Consumer Electronics Show — also taking place in Las Vegas in January — in order to solidify its relationships with advertisers.

Its big weapon at the giant annual confab will apparently be Mayer, who has not yet interfaced significantly with the company’s big ad clients since taking the top job in July. At CES, sources said, Yahoo is hoping the “Marissa Halo” — i.e. excitement around the telegenic exec — will help boost its business.

The San Francisco social games company said today that it has filed an “Application for a Preliminary Finding of Suitability” in Nevada. The process, conducted by the state’s gaming control board, could take up to 18 months. If Zynga is found suitable, it could apply for a license, which could take another two to three months.

“Zynga has filed its Application for a Preliminary Finding of Suitability from the Nevada Gaming Control Board. This filing continues our strategic effort to enter regulated RMG (real-money gaming) markets in a prudent way,” said the company’s Chief Revenue Officer Barry Cottle, in a statement. “As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market.”

The company, which has been clear for awhile about its intention to enter the real-money gaming space, also recently partnered with bwin.party in the U.K. to roll out its first real-money gaming experiences in the first half of 2013.

Online gambling in the U.S. is still very much in the air. Last year, the Department of Justice ruled that online gambling is legal under federal law, but now it’s up to every state to pass legislation outlining operating procedures. Nevada and the District of Columbia moved quickly to enact laws, but clearly it will take time for every state to get a law passed, unless the federal government steps in with a national policy.

As was announced earlier this week, Qualcomm CEO and Chairman Paul Jacobs has nabbed the keynote spot at the 2013 Consumer Electronics Show in Las Vegas.

He’ll kick off the massive tech event, taking over the pre-show speech slot that has been the property of Microsoft since the beginning of geek time.

Until this coming year, that is. The selection of the head of the wireless chip giant says a lot about just how much mobile has taken over the scene at CES, and the title of Jacob’s speech expresses just that: “Born Mobile.”

Said Qualcomm about the keynote: “Thanks to anywhere, anytime communication, mobile technology brings people together and is enabling a powerfully connected future, a future that is now. Mobile has become an integral part of consumers daily lives, and it will continue to transform the way individuals and communities interact with one another and the world around them.”

Ya think?

In any case, in releasing the news, the company also added a painfully cute video, titled “Baby’s First Text,” of a little girl using a wide range of mobile devices, (and, no, as home video as it looks, I doubt she is really doing those things).

Enjoy:

Burning Man — the annual week-long art and geeks-running-around-naked festival — begins tomorrow in the Black Rock Desert, but with a decidedly down-to-earth lawsuit hanging over its ethereal head.

The organizers of the Nevada event sued Pershing County last week in federal court over what it characterized as a “drastic increase in fees.”

“For more than 20 years, the Burning Man community has proudly made northern Nevada its home, providing millions of dollars annually to the local economy,” said Larry Harvey of San Francisco-based Black Rock City LLC, which runs the more than 20-year-old event, in a statement. “We love Nevada. Unfortunately, Pershing County is making it difficult to continue doing business here. We intend to resolve this matter through reasonable means and work collaboratively with Nevadans to keep our business in the state.”

The county’s lawyers disagreed, noting in a statement: “Without giving an overall context to the information provided, Black Rock City LLC attempts to portray motivations that simply did not and do not exist. … The residents of Pershing County should not be required to flip the bill for the business conducted by a ($20 million plus) business.”

Burning Man is now held on public land, managed by the U.S. government’s Bureau of Land Management, to which it pays a $1.5 million fee. But, no surprise, Burning Man requires a lot of local help.

Organizers said they have paid their dues to Pershing County over the years and have also give even more to local charities, while the influx of an expected 60,000 people adds $15 million in spending to the rural community’s economy.

After paying a higher fee for 2011, though, BRC said that Pershing County wanted more this year — $400,000, compared to last year’s $175,000 payment to the county, largely for additional law enforcement costs.

BRC is taking issue with a new ordinance that will boost the expected 2013 fee to upward of $600,000 and more than $1 million after that.

“It is wrong for the county to bully us in an attempt to balance its books,” said Harvey about the lawsuit, which will not impact this year’s event. “We are being treated like a piggy bank. We do not think that this government or any government has the right to do this.”

Countered the county last week: “While Black Rock City, LLC wants to portray the event as a fairytale land in their public relations, they fail to mention serious crimes that have occurred in the past and are expected to occur in the future.”

Sounds messy, but the show will still go on — Burning Man’s art theme this year is Fertility 2.0.

The Nevada Board of Economic Development endorsed the state-sponsored deal, which will see Apple granted $89 million in tax breaks to set up shop in the Biggest Little City in the World and invest $1 billion in the region over the next decade. Apple’s current plan is to build a data center similar in the size to the one it operates in Maiden, N.C., and use it to support its iTunes Store and new iCloud services. Along with it, the company will build a business and purchasing facility.

And what does Nevada get in exchange for the $89 million in tax breaks it’s doling out? For starters, 235 brand-new tax-paying jobs, plus a $400 million investment from Apple in the first four years of the facility’s operation, and up to $2 billion over 30 years; $16 million to $20 million over the first 10 years in taxes; and the endorsement of a marquee tech company that could entice other companies to do business in the state.

Apple today confirmed it is considering Reno as the site of its next data center.

“We hope to build Apple’s next data center in Reno to support Apple’s iTunes Store, App Store and incredibly popular iCloud services,” Apple spokeswoman Kristin Huguet told AllThingsD. “If approved, this project would expand our presence in Nevada and create hundreds of construction jobs over the next year, plus permanent jobs at the data center which will add to our existing total of nearly 400 employees in the state.”

According to the Reno Gazette-Journal, which first reported Apple’s interest in Reno, the company is mulling a $1 billion investment in the region over 10 years that would include not just the data center, but a business and purchasing facility as well.

If the deal is approved, Apple could break ground on a new data center as soon as August. Once it’s finished and online, the company will have major data facilities in Newark, Calif.; Maiden, N.C., and soon Prineville, Ore., as well.

As expected, activist shareholder Daniel Loeb of Third Point released a new letter on the bio controversy he set off at Yahoo, again calling for the firing of its CEO, Scott Thompson.

“It seems farcical to us that the Board will most likely spend more time deliberating over whether Mr. Thompson should be fired than it did properly vetting whether he should have been hired,” read the letter in part. “The necessary investigation into whether certain senior executives and Board Members knew of Mr. Thompson’s deceptions before hiring him should not delay decisive action over his ethical breaches.”

Loeb, who is waging a proxy fight with Yahoo over board seats he wants, also offered to work with the Yahoo board to find a new CEO if it accepted his slate of directors. In the interim, he suggested Yahoo put either CFO Tim Morse or media head Ross Levinsohn in the job. Morse had taken that position temporarily after Yahoo fired its last CEO Carol Bartz last fall.

Confused yet?

Loeb set off a management crisis there last week with the revelation that Thompson had added a fake computer science degree to his bio.

The first casualty came yesterday with the stepping down of Yahoo director Patti Hart, who was charged with vetting Thompson for the job.

The Yahoo board also announced yesterday that it would be conducting a probe of the circumstances around the hiring, as well as how the faux academic credentials got in Thompson’s bio and also the company’s regulatory filings.

The new letter was a reaction to Thompson’s apology on Monday for the borked bio becoming a “distraction” (but not, oddly, for the mistake itself). Loeb had previously called for Thompson’s firing over the bio fibbing.

Loeb will be appearing at an investor conference in Las Vegas later today, where he will surely be asked about the situation.

In related news, eBay CEO John Donahoe, Thompson’s former boss, lent words of support, but also underscored that the online commerce company’s legal filings of his bio were always correct, even if its Web site and other PR documents handed out were not. Thompson came to Yahoo from a stint as president of eBay’s PayPal payments unit.

As reported by Bloomberg, Donahoe said:

“When Scott was hired at EBay Inc., all of EBay’s filings had the accurate information. Some of EBay’s PR materials had that bio. Our legal filings were taken care of by our legal department. Some of the PR materials had that info,” he said while in Tokyo of the correct bio versus the incorrect one.

Donahoe added: “I think Scott Thompson did a great job at PayPal. I think he’s a very talented leader and I believe he can help Yahoo. I hope they get through this and he can continue to do the very challenging job he’s got of helping to turn Yahoo around. I’m Scott’s biggest fan.”

This has been the first public support of Thompson by a prominent Internet figure, which might help lagging morale at the company.

Here’s the full version of the latest Loeb letter:

Third Point May 9 Letter Release

RELATED POSTS:

• Yahoo’s Parting With Thompson Will Be for “Cause” (a.k.a. CSLie)
• Ross Levinsohn’s Yahoo Plan: Back to the Future
• Here’s New Yahoo CEO’s First Note to Troops! (The Leaking-Internal-Memos-to-ATD Policy Remains in Effect As Usual)
• Yahoo Officially Confirms ATD Report on CEO Changes and Proxy Settlement
• Meet the Man I Call “The Hair”: The Video Stylings of Yahoo’s Newest CEO Ross Levinsohn
• Will Thompson’s Ouster Mean a Yahoo-Facebook Patent Settlement Too?
• Exclusive: Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
• Heidrick & Struggles Slaps Back at Thompson’s Yahoo in Blame Game Over ResuMess
• Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.
• Not So Scott Free? Yahoo’s Other Big Shareholder — Cap Re — Leaning Toward Supporting Loeb Over Thompson ResuMess.
• Tech Nation’s Gunn Says She and Yahoo CEO Discussed Their CS Degrees Before 2009 Show (Video and Audio)
• Loeb Calls Again for Thompson Firing From Yahoo, as Former eBay Boss Supports Him
• Place Your Bets: Will Loeb Drop Another Bomb on Yahoo at Vegas Confab Later Today?
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• Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”
• Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess
• As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)
• Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring
• They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.
• Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him
• In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)
• Yahoo’s Board Will “Review” Resume Discrepancy of CEO
• How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
• Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”
• Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Daniel Loeb of Third Point — the activist shareholder who set off a management crisis at Yahoo last week with the revelation that new CEO Scott Thompson had added a fake computer science degree to his bio — will be onstage at a high-profile investor confab in Las Vegas this afternoon.

It’s Loeb’s first public appearance since he scored a direct hit on Yahoo in his ongoing proxy fight against the company — a first casualty yesterday, with the stepping-down of Yahoo director Patti Hart, who was charged with vetting Thompson for the job.

With one win like that, can Loeb resist using the panel — titled “Titans of Wall Street: Insight & Strategies for Capitalizing on Today’s Markets” — to strafe Yahoo a bit?

Sources said Loeb is prepping some reaction to Thompson’s apology on Monday for the borked bio becoming a “distraction” (but not, oddly, for the mistake itself), as well as an offer to work with the Yahoo board on a new CEO choice. Loeb has called for Thompson’s firing over the bio fibbing.

But the pugnacious investor will likely also be asked to opine on the situation so far at the off-the-record SkyBridge Alternatives Conference, which describes itself as “committed to facilitating balanced discussions and debates on macro-economic trends, geo-political events and alternative investment opportunities within the context of a dynamic global economy.”

What will be more interesting to see in the days ahead — even as the Yahoo board investigates how the false information about Thompson’s academic credentials got on that bio, as well as in regulatory filings — is if Loeb can be more than just a bomb-thrower and put forth a more specific and substantive plan for the long-troubled company than he has so far.

It’s not a requirement, of course, since Loeb is only seeking board seats and is not lobbying to be CEO, whose job it is to formulate a cogent strategy. But other Yahoo shareholders he is seeking to convince to join him in his proxy battle probably want more than “Yahoo stinks” from him at some point.

Still, for today at about 1:35 pm PT, when Loeb is scheduled to speak, it’s probably a good bet to expect some less-than-pretty noise from Sin City.

Update: In related news, eBay CEO John Donahoe, Thompson’s former boss, lent words of support but also underscored that the commerce company’s legal filings of his bio were always correct, even if its Web site was not. Thompson came to Yahoo from a stint as president of eBay’s PayPal payments unit.

As reported by Bloomberg, Donahoe said:

“When Scott was hired at EBay Inc., all of EBay’s filings had the accurate information. Some of EBay’s PR materials had that bio. Our legal filings were taken care of by our legal department. Some of the PR materials had that info,” he said while in Tokyo, of the correct bio versus the incorrect one.

Donahoe added: “I think Scott Thompson did a great job at PayPal. I think he’s a very talented leader and I believe he can help Yahoo. I hope they get through this and he can continue to do the very challenging job he’s got of helping to turn Yahoo around. I’m Scott’s biggest fan.”

This has been the first public support of Thompson by a prominent Internet figure, which might help lagging morale at the company.

RELATED POSTS:

• Yahoo’s Parting With Thompson Will Be for “Cause” (a.k.a. CSLie)
• Ross Levinsohn’s Yahoo Plan: Back to the Future
• Here’s New Yahoo CEO’s First Note to Troops! (The Leaking-Internal-Memos-to-ATD Policy Remains in Effect As Usual)
• Yahoo Officially Confirms ATD Report on CEO Changes and Proxy Settlement
• Meet the Man I Call “The Hair”: The Video Stylings of Yahoo’s Newest CEO Ross Levinsohn
• Will Thompson’s Ouster Mean a Yahoo-Facebook Patent Settlement Too?
• Exclusive: Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
• Heidrick & Struggles Slaps Back at Thompson’s Yahoo in Blame Game Over ResuMess
• Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.
• Not So Scott Free? Yahoo’s Other Big Shareholder — Cap Re — Leaning Toward Supporting Loeb Over Thompson ResuMess.
• Tech Nation’s Gunn Says She and Yahoo CEO Discussed Their CS Degrees Before 2009 Show (Video and Audio)
• Loeb Calls Again for Thompson Firing From Yahoo, as Former eBay Boss Supports Him
• Place Your Bets: Will Loeb Drop Another Bomb on Yahoo at Vegas Confab Later Today?
• Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board
• CEO Says Sorry to Yahoos for Borked Bio “Distraction” — But Will Mea Culpa Work Without an Apology for Error? (Memo)
• Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”
• Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess
• As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)
• Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring
• They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.
• Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him
• In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)
• Yahoo’s Board Will “Review” Resume Discrepancy of CEO
• How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
• Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”
• Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Six years ago this month, I revealed in Businessweek that Apple had incorporated in Nevada where the corporate tax rate is zero. So I found the Times’ account — written by Charles Duhigg and David Kocieniewski, about the many financial tricks that Apple employs to minimize its tax exposure — to contain a lot of old news, but also some new, fascinating details. Who couldn’t love a phrase like “Double Irish With a Dutch Sandwich” to describe arcane accounting and legal tricks?

But the implication the story leaves a reader with — that Apple is somehow doing society a disservice by not paying its fair share of corporate taxes — is simply wrong on many levels. The most dubious of the lines that the Times attempts to draw is between Apple and the budget crisis at De Anza College, a Cupertino community college where Apple co-founder Steve Wozniak was once a student. The college is facing a “death spiral” because of a decline in funding from the state. This funding, the reader is led to conclude, would be more plentiful if corporations like Apple were to step up and pay, and not escape the tax bill by setting up an office in neighboring Nevada.

What the Times fails to make clear is how community colleges are funded in California. The picture is much more complicated. California community colleges draw the majority of their funding from the state’s general fund — which is drawn directly from the state’s personal and corporate income taxes — and from local property taxes collected by counties. As of the 2009-2010 budget cycle, these two buckets made up about 88 percent of the system’s funding. State lottery funds, federal funds and student fees made up the remainder.

Tax policy wonks — which I’m not — will remember that California was the birthplace of the property tax revolt movement in the 1970s. In 1978, California voters overwhelmingly approved a measure that limits the amount by which property taxes can increase each year. Since then, at least one estimate pegs the amount that the state’s taxpayers have avoided paying at north of half a trillion dollars as of 2009. In February, the property tax shortfall facing the state community-college system was $41 million. Conclusion: If there is to be blame for the shortage of taxpayer funding at De Anza College, a healthy portion of it should be laid at the door of California’s own voters and taxpayers, who in 1978 thought that property-tax limitations were a good idea.

I had a few other problems with the story. Take sales taxes. When you buy a Mac in New York, you pay a sales tax of 8.875 percent. For a base-level iMac, priced at $1,199, that works out to more than $106 in taxes. While some states charge no sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — the average sales tax in the U.S. works out to 9.6 percent.

Putting aside the fact that the average sales tax in Canada is higher, let’s assume that Apple’s North American sales of $38.3 billion in its fiscal 2011 were taxed at that rate, and do the math: We get $3.7 billion in sales taxes paid into the coffers of states and municipalities, except in those five states that have no such tax. That amounts to more than 1.5 times the $2.4 billion the Times says Apple would have owed the federal government. Factor in VAT and other similar taxes in the U.K. and throughout Europe, and you get the idea that Apple is generating tax revenue aplenty on the sale of its goods. Yes, those taxes are passed on to customers. But isn’t that the case with every tax a corporation making consumer products pays?

Finally, you may remember that earlier this year Apple released an extensive report on the number of jobs it had created and supported both through direct employment and in the orbit of the products it creates. It seemed an odd thing for Apple to release at the time, and now we know why: It reads almost like it was prepared by Apple in advance, knowing this story was in the pipeline at the Times. The final number, by its reckoning: 514,000 U.S. jobs are created by the Apple universe, including 47,000 employees; 210,000 jobs were created as part of the app economy, which didn’t even exist until 2008.

Assuming that each of those jobs pays a salary north of $35,350 a year, taxes collected on that income could range anywhere from 25 percent to 35 percent, depending on the income bracket. And that’s before accounting for any stock-based compensation.

At this point, the discussion turns to a deeper question: Is it better for society to have a company pay more in taxes, or to create more jobs? You can argue that had Apple not taken advantage of the various strategies it employed to pay less taxes, it might not have flourished as well as it has, and thus created fewer jobs. But people smarter than I will likely hash out the finer points of this argument in the coming days.

(Image is a screen grab from this silly Beatles cartoon built around the group’s song “Taxman.”)

Just as the annual Consumer Electronics Show kicks off this week, according to a report from the NPD Group: Consumer electronics sales during this past holiday period dropped six percent from last year.

That should be some not-so-welcome news for the vendors at the Las Vegas gadget confab, which is seeking to show off new wares to excite said consumers.

Those offerings had better step it up, from a look at the NPD Weekly Tracking Service, which noted that the decline was coming off another decline from a year ago.

While 2011′s drop was not as bad as 2010′s, it’s not the right direction, although the tally did not include some of the more explosive device categories being prominently featured at CES, such as tablets.

Said NPD: “Total consumer technology sales (excluding cell phones, tablets, e-readers, and video games) fell 5.9 percent to around $9.5 billion for the 5 weeks ending December 24, a slight improvement over the 6.2 percent decline in 2010.”

Sales of personal computers and televisions fell 4 percent, with flat unit volumes.

“2010 was the first year in quite awhile where the real drags on the core CE marketplace were not TVs and PCs,” said Stephen Baker, VP of industry analysis at NPD, in a press release. “Revenue for those two segments outperformed while the rest of the market dropped by more than 7 percent. The accelerated rate of decline in older technology categories such as DVD, GPS and MP3 players put a ceiling on how well the industry could perform during the holiday.”

Consumers did snap up flat-panel TVs, with screen sizes of 50 inches and higher rising by 32 percent in unit sales.

And the rocky 3-D TV business also grew by more than 100 percent, with TVs with “3D capability accounting for more than one in every five dollars spent on TVs during the holiday.”

Also up: Home theater systems (10 percent) and stand-alone streaming devices (65 percent).

But those increases did not stem the overall negative tide.

For other sectors, here’s the damage to holiday revenue in percentage change from 2011 dollars spent:

Blu-ray players: Down 17 percent.

Camcorders: Down 42.5 percent.

Digital picture frames: Down 37.5 percent.

GPS: Down 32.6 percent.

HDD: Down 25.1 percent.

Mice and keyboards: Down 7.1 percent.

MP3 players: Down 20.5 percent.

Multifunction printers: Down 9.9 percent.

Point-and-shoot cameras: Down 20.8 percent.

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The five new facilities will add about four million square feet of space and hire thousands of new employees.

But that’s just the beginning. The company has plans to expand even more as it adds more merchandise to its inventory and tries to speed shipping to meet the popularity of services like Amazon Prime.

In all, the Seattle-based e-commerce giant plans to add at least nine fulfillment centers this year, of which roughly half will be located in North America. If the company’s growth rates continue, it may end up building even more, execs disclosed during its last earnings call.

It is the second year in a row that Amazon has built out more capacity, having added 13 fulfillment centers in 2010. The company currently has fulfillment centers in Arizona, Delaware, Indiana, Kansas, Kentucky, Nevada, Pennsylvania, Texas and Virginia.

Today, it announced it will build a fourth distribution center in Phoenix, spanning 1.2 million square feet, making a total of 4 million square feet in the state. For perspective, that’s the equivalent of nearly 70 football fields.

Yesterday, it said it was adding 900,000 square feet in Indiana.

Amazon hires thousands of full-time positions at these facilities, including roles in picking, packing and receiving, and shipping.

Amazon did not specify how many employees would be necessary at each location, but said for example that it was seeking 2,000 workers in Lexington County, S.C., and 2,700 in Hamilton County, Tenn. (not including 4,000 seasonal workers).

The company’s impressive growth was put into context earlier this year by Geekwire, which reported that Amazon had hired 4,200 employees in the first quarter to bring its total to 37,900.

While Amazon must build these facilities to keep up with demand, the investments are costing it significantly. In the first quarter, Amazon’s revenues jumped 38 percent, but net income fell by 33 percent compared to the year-ago period.

Still, it’s a price that must be paid. You can’t store everything in the cloud.

Franken chairs the subcommittee on privacy, and says he wants to explore the situation, which could be the first hint that he wants to hold hearings.

He’s not the only person in Congress making noise about it. Sen. Richard Blumenthal, a Democrat from Connecticut, has asked Attorney General Eric Holder to investigate Epsilon for “possible civil and criminal liability.” There’s also talk of hearings on the matter in the House. On top of that, state attorney generals in Rhode Island, Iowa, Nevada and Oregon have started warning consumers in their state about the dangers of clicking links in suspicious emails that may emerge in the coming days. I’ve pasted Blumenthal’s letter below.

Shares in Epsilon parent Alliance Data Systems rose more than one percent today as concern among investors around the business unit that was responsible for 22 percent of its revenue last year seems to have abated for the moment. The company will report quarterly earnings on April 21, and we’re hoping management takes the opportunity to be forthcoming with more details about how the breach happened.

April 6, 2011

The Honorable Eric H. Holder, Jr.
Attorney General of the United States
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Mr. Attorney General:

I am writing to formally request an expedited investigation into possible civil and criminal liability, and to highlight key issues to consider in the course of that investigation, concerning recent reports of a major data security breach involving Epsilon, an internet email marketing firm.

On April 1, 2011, Epsilon reported that it had experienced a security breach of its database of customer names and email addresses which it collects from various companies, including many retail and financial firms. The company has not specified how many consumers have been affected by the security breach. Epsilon has not provided a list of companies affected. While some of Epsilon’s client companies have notified their customers of the breach, other consumers may be unaware that their names, email addresses and other potentially identifying information may be at risk.

I believe that immediate notification to all customers is vital to protect them – and enable them to protect themselves – from identity theft. Despite claims by Epsilon that only the names and email addresses of individuals may have been compromised by this security breach, I ask that your review of this incident determine whether individually identifiable financial information has been compromised. Names and email addresses would allow unscrupulous actors to send emails to consumers – ostensibly from the retailers which whom the consumer does business – seeking private financial information such as credit card numbers or checking or banking accounts.

I believe that affected individuals should be notified and provided with financial data security services, including free access to credit reporting services, for two years, the costs of which should be borne by Epsilon or its affected clients. I believe it is also necessary to provide every affected individual with sufficient insurance to protect them against possible financial consequences of identity theft.

Consumers deserve more complete information on the data breach, as well as the assurance that their personal financial information will be securely maintained. If personal financial information has been compromised as a result of this incident, Epsilon should be required to provide written notification of the breach, specific information about the data that may have been improperly accessed by third parties, and personal information security protection, including free access to credit reporting services, and insurance for two years.

Thank you for your attention to this important issue and for your continued work on behalf of the American public.

Sincerely,

Richard Blumenthal
United States Senate

As promised, after posting highlights last week, here’s the full video from an interview with Nvidia CEO Jen-Hsun Huang at our D@CES event at the Consumer Electronics Show in Las Vegas.

The chipmaker exec talked a lot about how mobile is about to see super-duper-duper smartphones and more.

Here’s Huang in a video of the interview with Mobilized’s Ina Fried:

]]> http://allthingsd.com/20110121/full-dces-interview-video-nvidias-jen-hsuan-huang/feed/ 3 http://allthingsd.com/20110119/full-dces-interview-video-microsoft-internet-explorers-dean-hachamovitch/ http://allthingsd.com/20110119/full-dces-interview-video-microsoft-internet-explorers-dean-hachamovitch/#comments Wed, 19 Jan 2011 16:17:15 +0000 Kara Swisher http://kara.allthingsd.com/?p=39756 As promised, after posting highlights last week, here’s the full video from an interview Walt Mossberg did with Microsoft Internet Explorer head Dean Hachamovitch at our D@CES event at the Consumer Electronics Show in Las Vegas.

The browser chieftain at the software giant talked a lot about privacy, as you can see from Hachamovitch’s latest shirt motto.

Enjoy:

]]> http://allthingsd.com/20110119/full-dces-interview-video-microsoft-internet-explorers-dean-hachamovitch/feed/ 1 http://allthingsd.com/20110117/full-dces-interview-video-twitter-ceo-dick-costolo/ http://allthingsd.com/20110117/full-dces-interview-video-twitter-ceo-dick-costolo/#comments Mon, 17 Jan 2011 17:05:22 +0000 Kara Swisher http://kara.allthingsd.com/?p=39649

As promised, after posting highlights last week, here’s the full video from an interview I did with Twitter CEO Dick Costolo at our D@CES event at the Consumer Electronics Show in Las Vegas.

Costolo is one funny dude, and he also said a lot about what’s up at the San Francisco microblogging service.

Enjoy:

]]> http://allthingsd.com/20110117/full-dces-interview-video-twitter-ceo-dick-costolo/feed/ 0 http://allthingsd.com/20110114/dces-highlights-video-nvidias-jen-hsun-huang/ http://allthingsd.com/20110114/dces-highlights-video-nvidias-jen-hsun-huang/#comments Fri, 14 Jan 2011 16:01:20 +0000 Kara Swisher http://kara.allthingsd.com/?p=39510

Our next highlights video from our D@CES event last week is of Nvidia CEO Jen-Hsun Huang.

The event, which we did in cooperation with the Consumer Electronics Show, was only three sessions in one afternoon. It was followed by a lovely party, all at the Venetian Hotel in Las Vegas.

Huang talked about how mobile is about to see super-duper-duper smartphones and also touched on the chipmaker’s legal battle with Intel, which was settled earlier this week.

Here’s a longish highlights video of Huang’s interview with Mobilized’s Ina Fried:

I’ll be posting the full videos of this interview, as well as with Twitter CEO Dick Costolo and Dean Hachamovitch, who is in charge of Microsoft’s Interet Explorer browser from D@CES next week.

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