The top ranking will go a long way in quieting the critics who believed Zynga was foolish to acquire OMGPOP for $180 million on the day of Rovio’s big launch, only to see it fall to second place the next day.

In addition to climbing its way back to the top, Zynga also disclosed that the game has now been downloaded more than 50 million times in 50 days, making it the fastest-growing mobile game ever — or so it believes.

In other words, that would be like everyone in England downloading the app in less than two months.

While it still may end up being true that Zynga overpaid for OMGPOP, there is little doubt that the game is an overnight success.

If you are one of the few people who haven’t already played it, Draw Something challenges players to use their finger to draw a picture of a person, place or thing; for example, “hoodie,” “golf cart” or “Rihanna.” The completed picture is handed off to another player, who must guess what is being drawn, sort of like Pictionary.

Inside the game, players can pay for additional features, such as new colors that can help make the illustrations easier to guess, new words if they don’t like the choices that are presented to them, or bombs that will eliminate some of the letters to make guessing an illustration easier. The free version has ads; users can pay 99 cents to get rid of them.

Zynga also said that since the game launched, more than six billion drawings have been created (that’s 120 for every resident of England), and that at the game’s peak hours, it generates 3,000 drawings per second. The most popular words are “starfish,” “pregnant,” “six-pack,” “Hangman” and “boom box.” The least popular word is “latrine.”

The mobile game also registers as the most popular game on Facebook, because it allows people to log in to the game on the phone using their credentials.

However, people do not have to register using Facebook, so the number of players using it is actually bigger than what’s being reported by AppData, which tracks application usage on Facebook.

Still, AppData reports that the game has 14.4 million daily active users, where it has plateaued for the past week. The next most popular game, also owned by Zynga, is Words With Friends, which draws about eight million daily users, slightly more than half of Draw Something’s crowd.

Games are fun. But they can be socially relevant too. Please share this. At Draw Something, by OMGPOP & Zynga, we just added the word HOODIE.

– OMGPOP CEO Dan Porter, via Twitter

I’m sorry for what I said on Twitter last night. No excuses.

– Former OMGPOP CEO Dan Porter, apologizing after describing Shay Pierce, a former OMGPOP employee who declined to work for Zynga, as “the weakest one on the whole team.” Among Porter’s many critics was Twitter CEO Dick Costolo: “Wow, what a nitwit comment that was.”

Values aren’t just for idealists — they matter. If a company’s practices make you uncomfortable, pay attention to your instincts and be true to them.

– Shay Pierce, an OMGPOP employee who says he was the only one not to join Zynga when that company acquired the Draw Something game maker last week

Yesterday, it acquired OMGPOP, the developer that suddenly unseated the social game giant after its overnight success with Draw Something.

Draw Something, which challenges players to guess what another person is drawing, much like Pictionary, has been downloaded more than 35 million times in the past six weeks.

In the words of OMGPOP’s CEO Dan Porter, that’s pretty “Drawsome!”

But in making the acquisition, Zynga may have inadvertently set the expectation that if it doesn’t create the No. 1 game on Facebook — it will acquire it.

In this case, that wasn’t a cheap thing to do.

Zynga declined to say how much it spent on OMGPOP, but our sources say it paid $210 million, including $30 million in employee-retention payments. 

The message Zynga is sending with this acquisition is that it is committed to having the most popular games — a difficult and expensive proposition, especially if acquisitions are always the answer.

Just ask Porter how difficult it is. It took him 34 attempts and six years to build a hit.

“You are always trying to figure out what everyone wants,” he said in an interview. “But a hit is a hit for reasons that are hard to understand. I’ve told investors before — if I could, I would only make those games, and not the other games.”

Porter likened it to the music business, where he started his career. While busy signing every hot band he could find, the unexpected runaway hit was the “Dirty Dancing” soundtrack.

Still, the stock market rewarded Zynga’s decision yesterday, sending the company’s stock up about 5.3 percent, to $14.45 a share, after getting confirmation of the acquisition at noon. However, by the end of the day, enthusiasm waned, and shares closed at $13.72 a share.

Since going public in December, it’s been a rocky ride for Zynga.

After raising $1 billion to make it the largest Internet IPO since Google, it has traded as low as $7.97 and as high as $15.91. Based on yesterday’s closing price, the stock is now up 37 percent.

Acquisitions are hardly a new strategy for the company.

Last year, it set a pace of buying more than one company every month, seeking both employees and new games to maintain its rapid growth rate.

In this case, OMGPOP’s 40 New York employees will join forces with Zynga’s existing New York office, and Porter will become the new VP and GM.

What really stands out about this acquisition is the price — at $210 million, it’s the most expensive company Zynga has purchased. Prior to this acquisition, Zynga’s largest buy was the $53 million purchase of Newtoy, the developer behind Words With Friends.

That’s not to say that Zynga hasn’t attempted other big purchases. In 2011, it courted Rovio, the maker of Angry Birds, and unsuccessfully bid for PopCap, which instead sold to Electronic Arts for $750 million.

Although Draw Something has been proven to be astonishingly popular in the short term, it doesn’t have the same kind of track record as Rovio or PopCap.

The mobile game sits atop the iTunes “top paid,” “top free” and “top-grossing app” lists, an unusual accomplishment. On iTunes, it beats every single Zynga title — including Zynga Poker, which is frequently one of the highest-grossing apps.

As mentioned at the top of this post, Draw Something is also the most popular game on Facebook. However, what’s interesting is that the game isn’t available on the social network. Instead, it uses Facebook credentials as a way for players to register on their mobile phones.

From what we’ve heard, it has also been generating a lot of cash, based in large part on in-app purchases made by players. People familiar with the company told my colleague Peter Kafka that it has recently been netting around $250,000 a day from the game — after Apple takes its 30 percent cut.

In an interview, Zynga’s Chief Mobile Officer David Ko said OMGPOP’s acquisition represents more than a hit game for the company.

“It was about the team and how well we connected,” he said. “We found a great leader in Dan, and an amazing team around him. I couldn’t be happier in partnering with the team.”

Indeed, that’s Drawsome.

Now Zynga has scheduled a call for a “news announcement” for 3 pm ET. I’m going to go out on a short limb and assume it’s to formally acknowledge that they have bought the company.

My sources tell me the purchase price will be in the neighborhood of $200 million, perhaps a bit higher. The company had raised around $16 million over the past five years.

(Update: No limb necessary. It’s a done deal, according to people with firsthand knowledge. Here’s more detail on the price: $180 million, plus another $30 million or so in employee-retention payments, I’m told. Don’t know about cash/stock split.)

No comment from Zynga. I haven’t heard back from OMGPOP CEO Dan Porter.

Zynga will get a New York-based team of about 40 people, and a series of games that OMGPOP has produced over the past few years. But the obvious target here is Draw Something, a sort-of social Pictionary game played on iPhones and Android handsets.

The game is astonishingly popular, and the iPhone app sits atop the iTunes “top paid” and “top free” lists, which is very unusual. Even more unusual: It is also the top-grossing app at iTunes, based in large part on in-app purchases made by players. People familiar with the company tell me it has recently been netting around $250,000 a day from the game — that’s after Apple takes its 30 percent cut.

Zynga is a Facebook games powerhouse, and has been steadily acquiring smaller companies with hits on their hands. Two years ago, it paid $53 million in cash and stock for Newtoy, the company behind Words With Friends. OMGPOP has played with Facebook games itself, but while Draw Something is Facebook’s “most popular” game, it’s not really a Facebook game at all. Intead, users log in with their Facebook credentials, but play the game on standalone apps.

Draw Something’s astonishing success may have made it tempting for the OMGPOP folks and their backers to consider taking a large funding round and keep going on their own, a la Rovio and Angry Birds. On the other hand, just a few months ago, OMGPOP had been thinking about raising money under vastly different circumstances — “things did not look awesome,” says one investor — and then Draw Something hit, out of nowhere.

“No one had any idea that this would take off, and no one knows why it did,” says another OMGPOP backer. Now no one has to figure it out — they’ve taken all the risk off the table.

Until this month, when it released Draw Something.

The game is essentially a mobile version of Pictionary and, for whatever reason, it’s a huge hit. Maybe it touches on some of the same things that Words With Friends mines, except it doesn’t require spelling.

In any case, it’s currently atop both the free and paid charts at the iTunes App store. And because it’s the kind of game that gets better as more people play it, it’s probably going to stay there for a while.

CEO Dan Porter says Draw Something, which didn’t exist a month ago, is now averaging two million active users a day. So how does a start-up ride that kind of rocket growth? Bigger question: Now what?

I asked Porter to jot down some thoughts about what he’s learned over the last few weeks, and what he thinks happens next. This is an edited version of his email replies:

All Hands On Deck
Two weeks ago there were five people working on the game. Now there are 40 people. We redeployed resources from a ton of other projects, and with the growth even those people are maxed out. If we were a 10-person company now instead of a 40-person company we would be dead. It causes disruptions when people are quickly moved from one thing to another, but everyone likes being associated with a winner.

Self-Reliance
We started out heavily reliant on Facebook and Amazon S3. We started making too many calls to S3, and almost took down one of their data centers. They throttled us and it took us a while to figure out what was going on; for a while our numbers cratered as users could not connect.

We had to move completely off of Amazon and host everything ourselves. As soon as we did that, our growth exploded again. Going from the 25th to the 1st most popular app was as much about performance as anything.

We also use Facebook to log people in. When Facebook is slow our app is slow, except that users don’t blame Facebook. They blame us.

A Tale of Two App Stores
The hardest thing about navigating the iTunes App Store is that there is a process for submission and approval. I understand why — it’s how Apple keeps things nice. But when you find a problem in the game, you fix it in a day or two but then have to wait a week to get approved. It is stressful. And very different than operating on the Web, where you can push live multiple times a day.

Android accounts for about 15 percent of our installs. The pro is we can push changes to the game live immediately. The challenge is that with their algorithm and so many different app stores, we are low in the charts. It’s hard to believe the game could be blowing up as big as it is and be somewhat invisible on Android, but that’s how it is.

Meanwhile, no single Android device makes up more than 3 percent of the downloads. In other words, we are on more than 50 devices, and not one of them is larger than 3 percent. That is really difficult to support.

Hot Ticket
With the success of the app, investors, celebrities and brands have all come out of the woodwork looking to get involved. The first inclination is to say yes to everyone, especially when you haven’t had that type of attention. But you have to protect the brand and make very strategic choices.

Attack of the Clones
You always feel like as soon as you are successful other folks are going to come after you. Cloning is inherent in the games business. So you need to think long and hard about how to maintain your advantage against well-funded, well-run companies.

Draw Something is about building the network for the game. When all your friends are in the game, as Zynga has proved with Words With Friends, then the network is the value of the game. Now we have more than two million players using the game daily. That’s a powerful network. Great offense, and great defense too.

Thanks, Norway! You Too, Instagram.
We’re huge in Sweden and Norway. We’ve been #1 there from day one and I have no idea why. And the activity on Instagram, as people share their drawings, has been tremendous. Spreading the game on Instagram would never have been on my radar in a million years.

The company, which has made a big push into Facebook games in the last six months, says it will use the new money to develop more games for the social network, as well as for Apple’s iPhone and Google’s Android platform.

The new money brings OMGPOP’s total funding to $16.6 million over its four-year history.

Bessemer has an impressive list of e-commerce bets: It was an investor in Quidsi, the parent company of Diapers.com and Soap.com, as well as in Yelp. And personally Ferrara is involved in other deals, such as Yodle, which helps local businesses market online, and OMGPOP, a social gaming company. Yesterday, it announced an investment in Shopify, which provides tools to help businesses sell products online quickly.

eMoney: So, you’re background is actually in computer programming? Does that help you evaluate deals?

Ferrara: I was a software engineer for many years, using Java and Microsoft languages, and I had the pleasure of authoring an O’Reilly book on Web services [O’Reilly & Associates’ "Programming .NET Web Services"]. I don’t know if it helps me, but it causes me to gravitate toward good technology and product teams.

Your most recent investment is Shopify?

Yes, we just closed last week. I just loved the team and was impressed by the product and the tech DNA that these guys had. It provides a commerce platform that can quickly serve small as well as larger businesses. They have about 10,000 to 11,000 customers as of today–and they’ve watched a lot of small businesses grow into larger enterprises.

My view of this whole small- and medium-sized business space is that they have a lot of the same pain points as large enterprises….Shopify delivers 80 percent of the functionality of larger, more expensive and cumbersome e-commerce software packages at a fraction of the cost. It offers a range of very sophisticated features around inventory management, marketing capabilities, as well as shipping and fulfillment–all of the capabilities you would get in an expensive package. They are democratizing the whole expensive enterprise software functionality.

E-commerce is a mature business that’s been around for a long time. Is there more innovation that’s happening in the space?

I think the market that Shopify is going after is less about taking share from existing players, and more about the next generation of businesses that are getting started today. A lot of those are mainstream local retailers.

Let’s say a trillion-plus has been spent in local retail, and it’s starting to move online, so that’s a big business. It won’t fully move online, but the local retailers need something besides their Main Street shop. Plus, the retailers want to tie in their physical locations, and use phones to manage their store, and take advantage of [Shopify's] technology to manage their business, whether its physical or online.

An Apple store was the first retail experience I had where I could swipe my credit card anywhere in the store–there was no waiting in line at the register.

Why can’t all retail experiences be like that? Shopify is going to do that, by moving everything to the cloud, whether you are going to a physical store, to the Web or on a mobile device. It should be one and the same.

What do you think of the local e-commerce market, especially given Google’s reported $6 billion offer for Groupon?

From what I’ve seen from afar, Groupon seems like a big business. If the rumors are true, it’s interesting to see Google having an interest. I look at them mostly as a self-serve ad company, which is mostly about technology and automation. Groupon has built a big local salesforce–it’s the inverse of Google’s approach.

I think it says a lot about how Google must be thinking about growth opportunities. To get to the local market, you do need the local salesforce. Self-serve works for a portion, but at the end of the day you need a sales channel.

So, you do think Google needs a local salesforce?

I’m guessing, but it strikes me as something that could be very compelling when [Groupon is] combined with [Google's] machinery. You could leverage each other’s data to do better at targeting for serving ads.

What about all the Groupon copycats?

Time will tell. It’s one of the questions I’ve thought about a fair amount. I don’t know. We have not invested, and clearly there’s a lot of smart people who think there are alternatives and a big enough opportunity to support competitors. I wouldn’t be surprised if it’s big enough. There’s a number of players doing quite well. It’s a good time to be No. 2 to 4.

The big question is, how valuable will it be for the end-business over time. There’s not a lot of historical information on that.

What’s the role of mobile in e-commerce going forward?

For a lot of the local businesses, [mobile] fits so perfectly, and it’s got to be a huge part of any local product offering. A lot of the local merchants are mobile, as well. They don’t have large staffs to rely on and are wearing lots of hats. They want to provide service to their customers on the go–the iPhone and Android really enable that. That’s why Shopify made an iPhone version that helps the merchants to do that.

On the consumer side, they’ve also seen an increase in willingness to make purchases on mobile. It’s expected to grow exponentially, and we have some pretty good data on Shopify. Purchases on mobile are starting to grow quickly.

What about virtual goods? You are an investor in OMGPOP, a social gaming company.

They monetize and generate a good portion of revenues from virtual goods….One of our former investments is Playdom and they did a fantastic job. [Yes, they did. In July, the Walt Disney Company acquired Playdom for $763 million.]

We are bullish on digital media and gaming. We are seeing more and more game mechanics being applied to other business models. For instance, companies in financial services or online education are having their products include game mechanics to drive behavior and make the product experience more intuitive.

Still opportunities for start-ups, with giants like Amazon around? What would be your advice?

There’s a tremendous opportunity internationally. I think it would be challenging to go head to head with Amazon in certain categories. You can’t differentiate on price, and you can’t differentiate on customer service because they are impressive. This isn’t my area of expertise, but as a firm, we see that there’s a space for international e-commerce companies. They understand the local market and the nuances of the local market, and can be in an area that has been overlooked. If they can get scale, they have a chance.

Or niche opportunities, like Diapers?:

That’s a team that did a fantastic job. They provided a great level of customer service. Whenever I told people we were investors, strangers or friends would say, “I love it.”

The New York-based company is still closing the round, but I’m told existing investors Bessemer Venture Partners and Spark Capital will re-up, and that Softbank Capital NY will also come aboard. There’s at least one other significant investor likely to join, but I don’t have their name (feel free to tell me, though–I keep all correspondence anonymous: peter@allthingsd.com).

OMGPOP has raised $6.5 million during its four-year history, which saw it start out as a sorta-dating site. But for the past few years it has focused squarely on free-to-play casual games, and has recently been trying to generate revenue via a freemium model, as well as some forays into advertising.

And like many casual games start-ups, it is getting a big boost by integrating its games into Facebook. It integrated with the social network this summer, and CEO Dan Porter says that move has doubled the company’s user base from three million to six million. Porter declined to talk about funding news.

Interest in casual games has sparked a flurry of deals in the past year, including Electronic Arts’ purchase of Playfish, Disney’s purchase of Tapulous and DeNA’s purchase of Ngmoco. But the big player remains Zynga, which is both tightly integrated with Facebook and often described as an obvious IPO candidate.

HP has taken over the gossip site’s home page for the day with an ad that manages to mash up the upcoming SATC film with some sort-of blingy laptops.

Home page takeovers are standard practice for the Web, but Yahoo is particularly proud of this one, because it’s the first time it’s rolled out this particular ad unit, which it built in-house.

Visitors to the site will notice some messaging for HP and SATC (oh – and Windows 7, too) at the top of the screen and in one of the 15 headline boxes that dominate the page, but they won’t see the full-page ad unless they click through.

Yahoo (YHOO) won’t say what it’s charging for its prime real estate, which attracts around 20 million uniques a month. But a good bet would be something in the $80,000 range for the day.

Here’s what OMG visitors will see when the page loads the first time:

And what they’ll see with the ad turned on:

The execution is a little confusing: If you click on most parts of the square, the ad will open up a new window in your browser that takes you to this HP-hosted page. If you want to stay on OMG and see the ad, you’d have to make sure you clicked on the “engage” button.

I’m also not sure how many OMG readers will be enticed to click on any part of the square, period. But Yahoo says that future iterations of the unit will offer advertisers the option to take over the screen for a few seconds without any prompting from users, like some other ads already do.

And repetition is the real point of this exercise: Yahoo is trying to create ad units that seem novel and fresh for visitors (and ad buyers), but are designed to be stamped out over and over again. Interesting to see if this one works.

Who wants to bet on a Web company with lots of users but very little revenue? The same people who bet on it before. Spark Capital and Union Square Ventures have poured another $5 million into Tumblr, which lets people quickly and easily set up lightweight blogs.

Three-year-old Tumblr doesn’t charge its 4.5 million users for the service. It doesn’t sell advertising on the page views they generate. And it is only now beginning to generate “meaningful” revenue, says founder David Karp. (That’s Karp, flanked by two employees, engaged in some kind of new-fangled xtreme sport, on the cover of this week’s New York Magazine)

But this hasn’t dissuaded Spark and Union Square, the sole investors in the company’s C round, as well as its B round in 2008.* The company has raised $10.2 million to date.

So now what?

Karp, who turns 24 this summer, says his company has “carved out a real and substantial niche” in the last year, and he brandishes numbers to bolster his case. The service, for instance, is now generating one billion page views a month. Here’s a chart! (Click to enlarge.)

But until recently, Tumblr’s growing popularity hasn’t done much beyond racking up big infrastructure bills. Now Karp says the company is changing this by rolling out a series of paid services.

The Los Angeles Times has a nice summary of new services, and Karp says there are a “dozen more in the pipeline.” But the short version is that these are primarily bells and whistles–like digital “stickers” you buy for your friends at a buck a pop–that passionate Tumblr users may like, but don’t need.

This is a switch from the company’s earlier plan to bundle lots of must-have features into a “Tumblr Plus” subscription service aimed at its most passionate users.

The new strategy is a little more seat-of-the pants, but the bet is that it may be easier to coax money out of people a couple dollars at a time.

Not coincidentally, this is the same model that’s working out very well for social gaming companies like Zynga, which is also funded by Union Square Ventures (and to a lesser degree OMGPOP, which is backed by Spark).

Zynga is reportedly profitable, and many have it pegged for an IPO in the near future. I don’t see that in Tumblr’s cards, but if Karp and crew were interested, I can see them attracting interest from the likes of Google (GOOG) and Yahoo (YHOO) sooner than later.

Maybe sooner in Yahoo’s case, if it can’t snap up another company whose CEO also graces New York Magazine’s cover this week.

*“Inside rounds” like these are supposed to be no-nos in the VC world because existing investors traditionally want to find new money to validate their wagers. For the counterargument, consult Tumblr investor Bijan Sabet’s blog (hosted by Tumblr, of course).

Alas, the Foursquare conference, hosted by the Quadrangle PE fund, is an invitation-only affair. And the event, which kicks off tomorrow, is closed to the press except for reporters onstage to interview the stars. And those conversations don’t get released to the public.

That’s a particular bummer this time. Because the Quadrangle guys–who have had a rough year–had the foresight to get a lineup that includes GE (GE) CEO Jeff Immelt, who appears to be in the final stages of selling NBC Universal to Comcast (CMCSA) CEO Brian Roberts, who will also be onstage. Sure would be nice to hear what they say.

Another panel that piques my interest, if only because of the title: “Are Popularity and Profitability Correlated?” It features Twitter’s Stone, LinkedIn founder Reid Hoffman and YouTube co-founder Chad Hurley. And would-be moguls are represented by a start-up pitch panel that includes Dennis Crowley of Foursquare, the superbuzzy mobile service whose name has nothing to do with Quadrangle’s conference.

So once again, here’s the complete list of those you won’t be hearing from this week as they gather at the Plaza in Manhattan. Unless, perhaps, one of my more ambitious colleagues sneaks in–I’m thinking of you, Bobby MacMillan–and gets us a first-hand account.

2009 SPEAKERS
EMILIO AZCÁRRAGA President, Board of Directors and CEO, Grupo Televisa
DENNIS CROWLEY Co-Founder, foursquare
BARRY DILLER Chairman and CEO, IAC; Chairman, Expedia, Inc. and Ticketmaster Entertainment, Inc.
BRIAN DUNN CEO, Best Buy
CHARLES FORMAN Founder, OMGPOP
REED HASTINGS Founder, Chairman and CEO, Netflix
REID HOFFMAN Executive Chairman and Founder, LinkedIn Corporation
CHAD HURLEY CEO and Co-Founder, YouTube
JEFF IMMELT Chairman and CEO, GE
PAUL JACOBS Chairman and CEO, Qualcomm Incorporated
OLLI-PEKKA KALLASVUO President and CEO, Nokia
JASON KILAR CEO, Hulu
LESLIE MOONVES President and CEO, CBS Corporation
ANNE MULCAHY Chairman, Xerox Corporation
JAMES MURDOCH Chairman and Chief Executive, Europe & Asia, News Corporation
BRIAN PHILLIPS CEO and Co-Founder, Thread
DAN PORTER CEO, OMGPOP
BRIAN ROBERTS Chairman and CEO, Comcast Corporation
PAUL SAGAN President and CEO, Akamai
ERIC SCHMIDT Chairman and CEO, Google
IVAN SEIDENBERG Chairman and CEO, Verizon Communications
BIZ STONE Co-Founder, Twitter
HOWARD STRINGER Chairman, CEO and President, Sony Corporation
BEN VERWAAYEN CEO, Alcatel-Lucent
DAVID ZASLAV President and CEO, Discovery Communications

MODERATORS
MARC ANDREESSEN General Partner, Andreessen Horowitz
KEN AULETTA Author and Writer, “Annals of Communications”, The New Yorker
MARIA BARTIROMO Anchor, Closing Bell; Host & Managing Editor, Wall Street Journal Report, CNBC
JAMES CITRIN Co-Leader, Board & CEO Practice, North America, Spencer Stuart
DAVID FABER Anchor, Reporter, CNBC
MICHAEL HUBER Co-President and Managing Principal, Quadrangle Group
BECKY QUICK Co-Anchor, Squawk Box, CNBC
GEOFFREY SANDS Director & Leader, Global Media, Entertainment & Information Practice, McKinsey & Co.
JOSHUA L. STEINER Co-President and Managing Principal, Quadrangle Group
GEORGE STEPHANOPOULOS Anchor, This Week; Chief Washington Correspondent, ABC News