Even as Yahoo’s board was kibitzing all weekend about how to handle the continuing resume-padding controversy around its recently hired CEO Scott Thompson — including hiring its own outside crisis communications firm to represent it — he was working the phones to keep top staff apprised of the evolving situation.

While Thompson told those he spoke to that he was limited in what he could say and blamed a “personal vendetta” by an activist shareholder for his troubles, being proactive in this regard is probably a good idea.

That’s because multiple sources said he said exactly nothing in various strategy meetings with top employees last week about allegations leveled by Dan Loeb of Third Point, which proved correct, that Thompson had not gotten a computer science degree in college, as his longtime bio had claimed.

“It was the gorilla in the room and it was awkward in the extreme,” said one exec present at the meetings. “He never brought it up, which was even worse.”

At this point, it seems unlikely that Thompson can regain the confidence of many at Yahoo — even though a company spokeswoman said he received a lot of incoming support too, both externally and internally — until he can render some cogent explanation about how the borked bio got into both Yahoo’s public site and also its more critical regulatory filings.

Even more mysteriously, how the error was never present in filings with the Securities and Exchange Commission made by eBay, where Thompson led its PayPal payments unit, although his public eBay bio has also been wrong for close to a decade.

And, most of all, how was it that Thompson never caught the mistake himself — even when directly asked about it — despite the likelihood of reviewing it multiple times over those many years and ultimately certifying it for Yahoo’s own SEC filings.

Calling Encyclopedia Brown to solve the Case of the Computer Science Degree That Wasn’t!

Thompson has given no explanation about the debacle to the bulk of the Yahoo staff at all levels, save for an information-free and terse note to employees on Friday afternoon that essentially asked them to focus on their work instead of his bizarre crisis.

Unfortunately for him, many Yahoos are focusing a lot on Thompson, with message boards at the Silicon Valley Internet chastising their CEO and giving him support that is tepid at best. From interviews I have had with two dozen employees this weekend, to say morale is at an all-time low is perhaps understating the situation.

Here is a short selection of comments that were read to me, for example:

“Resume padding is one thing, but lying about something that is so easy to check is puzzling.”

“There is no reason to let it slide by … This isn’t some guy who’s trying to impress a date … It’s sad that we just accept this kind of stuff from corporate heads and politicians.”

“Having some document to prove you can do a job is not all that important, lying about it is.”

What appears to trouble employees the most in the threads I was read was the nonchalance of the initial Yahoo statement about the issue, which called the addition of a fake degree on Thompson’s bio an “inadvertent error.”

“From a pure employee perspective, it feels like it is a violation of their principles,” said one person, reflecting a dozen or more conversations I had this weekend up and down the organization. “And anyone else would probably be immediately fired for this, even with an explanation.”

Said another: “He clearly knew and lied for years; and his handling since exposed has been unacceptable.”

As I noted above, a company spokeswoman said there was also much support for Thompson (pictured here) within the company, but declined to provide any quotes or details.

Presumably, some answers will be coming from a board investigation aimed at getting to the bottom of the situation, including trying to grok who put the error in the bio in the first place.

My bet: They’ll try to pin it on a lower-level minion, although that will not fly with a lot of people.

Including me, because whoever typed in the faux degree, its presence there has been too long for Thompson not to be responsible for it.

Flunky error or not, there are important questions about whether Thompson himself provided a bio that contained the inaccuracy to the board when he put himself forth for the job via direct emails to Yahoo director and Intuit CEO Brad Smith.

That line of thought basically boils down to: Can Thompson not read?

More problematic is the fact that the placement did not come via Yahoo’s headhunter on the CEO search, Heidrick & Struggles, which apparently was not charged with doing a background check on Thompson.

Instead, the director in charge of the search, Patti Hart, sources said, hired another forensic firm, which appears to have missed Thompson’s erroneous academic record.

The only thing completely clear amidst all the confusion: Hart screwed up by botching an extremely simple part of a vetting she was charged with. That makes her vulnerable, of course, along with other Yahoo board members or staffers closely involved in the talent search.

While Hart (pictured here) is in a much dicier position, Thompson still appears to have initial board backing — at least for today — as it’d be a very tough call to fire yet another CEO so quickly in the middle of several key deals for Yahoo, as well as a proxy fight.

Said one person close to the situation, the board is still considering its “options,” in an effort that is being led by independent board member Fred Amoroso.

So, it will be instructive to see how the board will proceed tomorrow — especially since it is likely that Loeb will lob a lawsuit to try to get more information on the Thompson hiring process.

But it’s started by hiring its own outside communications firm, Sard Verbinnen, which has handled other crises for Yahoo in the past.

Sard’s Charles Sipkins — welcome back, Charlie! — had no comment about the board’s next move, except to reiterate its statement from last week that it is looking into the Thompson bio mess and will make appropriate disclosures at some point.

We can’t hardly wait.

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

It’s one thing to not be targeted in any regulatory action that strafed your competitors, but SecondMarket CEO Barry Silbert used the opportunity to tout just why his company missed the bullets.

In an unusual and interesting post on social answer service Quora, Silbert gave a long answer to the question entrepreneur Jason Calacanis asked there: “Why wasn’t SecondMarket part of the SharesPost/secondary market SEC action today?”

That would be the investigation by the Securities and Exchange Commission, which filed charges, as Arik Hesseldahl wrote earlier this week, “against two managers of private funds that had raised more than $70 million to acquire and trade pre-IPO shares of Facebook and other tech companies with misleading investors and charging undisclosed fees. It also brought charges against SharesPost, saying it had engaged in securities transactions without being registered as a broker-dealer.”

The move was part of a year-long inquiry aimed at secondary markets, where firms trade privately owned shares and options of pre-IPO companies.

Silbert, who runs one of the biggest companies in this sector, apparently decided to make hay while the Feds shone (up). In the Quora post, he noted: “I am proud to say that SecondMarket is not among those investigated or charged, which only reinforces SecondMarket’s ongoing commitment to being the trusted, compliant and fully-regulated marketplace in the startup and private company ecosystem.”

If he does say so himself!

All kidding aside, it is actually a novel way to turn a story that could tarnish everyone nearby into a plus. (Plus, ABC — Always Be Closing!)

Among the reasons that Silbert said SecondMarket was not part of the government probe: “Fully regulated, soup to nuts, from the start” (the company is a registered broker-dealer; “close coordination with private companies on all transactions” (“customized secondary markets,” he noted); “rigid accreditation process” of buyers; and “no disclosure of private company valuation and pricing.”

The first quarter is the most common period for new stock and options to be awarded and therefore for older equity grants to become vested, according to compensation-research firm Equilar Inc. And so some Bay Area executives will soon be able to cash in millions of dollars of restricted stock units and stock options granted over the past few years.

Read the rest of this post on the original site »

The revised severance policy, disclosed in the technology giant’s annual report filed Wednesday with the Securities and Exchange Commission, means any executive officer terminated without cause will have to leave behind restricted shares or options that aren’t vested at the time they leave the company.

Read the rest of this post on the original site »

As I reported earlier today, social gaming giant Zynga has posted another filing with the Securities and Exchange Commission.

That includes Chief Business Officer Owen Van Natta stepping out of an operational role and forfeiting shares in the process. To be exact: That will be 4.6 million options and close to 800,000 restricted stock units.

All of the details are in his transition letter in Zynga’s massive new S-1, which is in exhibit 10.12 to the amendment filing.

I would start at page 119, but to summarize: Van Natta is keeping all the vested stock options and restricted stock units, currently more than two million stock options that are already vested and another 936,000 RSUs (Zynga calls them ZSUs) already vested. He also has another 750,000 shares that will continue to vest due to his board position.

But, because he is no longer an employee, he is forfeiting all his unvested employee stock options and RSUs. Although it does seem like a lot, this is typical in such cases.

I need to go to lunch, so just read it for yourself:

ZYNGAINC-20111117-S1A-0

How’s this for irony:

It was less than a year and a half ago that Owen Van Natta was ousted from his job as CEO of Myspace.

But last week — just as the failed social networking site sold for a paltry $35 million — Van Natta could have bought it himself for a fraction of his stake in Zynga, the social gaming phenom that just filed for its IPO and where he’s a top exec and shareholder.

As the San Francisco-based Zynga’s chief business officer, he was listed second after CEO and founder Mark Pincus on its S-1 on the list of top management and also serves on its board.

The filing also showed that Van Natta got about $43 million in total compensation in 2010.

That was due to part of his large Zynga holdings, including about three million shares he owns outright via restricted stock units that Zynga calls ZSUs, as well as 6.75 million more in options priced at a low $6.43 each.

All told, he has a 1.6 percent stake in the company. That could be worth upwards of $325 million if Zynga garners an expected $20 billion valuation. And it could be even more if its public offering pops higher as other recent Internet outings have done.

And that’s why when Van Natta arrives at the fancy and exclusive Allen & Company mogul fest in Sun Valley this week, he might want to thank News Corp. digital head Jon Miller — the man who fired him from Myspace.

After the Myspace debacle in February of 2010, according to its filing, it appears that Van Natta bounced back quickly to enter into a consulting agreement with Zynga in mid-April via his Luminor Group.

By August, he was hired on full time by Pincus and also became a director.

One reason for getting that plum post, Zynga said, was Van Natta’s experience as a longtime Internet exec at Amazon and, more importantly, Facebook.

He left the social networking giant in mid-2007 — where he had served as COO and, later, chief revenue officer — after relations with its CEO and co-founder Mark Zuckerberg became somewhat tense.

But that’s water under the bridge now; and, in fact, the filing was full of information about the close relationship with Facebook, which is a critical one for Zynga.

And, of course, for Van Natta, who gets my award for best Silicon Valley recovery of 2011.

Had he stepped up and bought Myspace from his large Zynga proceeds, though, he would have gotten my lifetime achievement award for pure moxie.

Some employees are alleging they were duped via complicated legalese and double-talk in employment contracts about how their shares would be handled upon termination or voluntary departure from the Internet telephony giant.

That matters, since Skype was recently sold to Microsoft for $8.5 billion, well above previous valuations. Thus, those who were, as a Skype PR person said, not in it to win it, um, lost.

Dramatic stuff, to be sure. But, even with all the fervor around the employment contract issue, the handwringing about what it means for compensation issues in Silicon Valley and a whole big dose of how private equity companies (in this case, a firm that had bought Skype called Silver Lake) are evil, it’s struck me as little more than an insider read-the-legally-obtuse-contract dispute.

And, although I love Reuters’ Felix Salmon’s epic tsk-tsking posts, that’s why I like to see real documents as proof of what people knew and when.

Apparently, a lot and rather clearly from this PowerPoint that was given to employees of Skype as of December 2009 as part of its changing ownership, after Silver Lake and other investors bought it from eBay.

While it’s not proof of what employees got it — typically, it is standard HR policy to hand this stuff out to everyone — and who read it (no accounting for slaggards!), it is pretty clear on what happens upon leaving Skype, either by a firing or quitting.

On the eighth slide, as you can see above, it says, in part:

“Good Leaver”: someone who gets fired without “Cause”

* Gets the fair-market value of their currently vested options

“Bad Leaver”: someone who resigns, or is fired for “Cause”

* Skype buys back their options at the lower of fair-market value or strike price

* This provision lapses post-IPO

It seems pretty buyer-beware clear, but check it out for yourself:

Skype – Employee Presentation

Whether he is walking the halls of Nokia’s headquarters in Espoo, Finland, or even just buying groceries at the market, Nokia’s chief executive is constantly flooded with suggestions for how the company should regain lost ground.

Elop recalled being at dinner just over a week ago and being approached by three young people who wanted to share their suggestions.

“The three of them couldn’t quite agree on what the right strategy was, but they clearly each had an opinion,” Elop said.

For his part, Elop has deeply considered three possibilities for its high-end smartphone business–sticking with plans to develop around MeeGo (a mobile version of Linux), shifting to Android or adopting Microsoft’s Windows Phone.

Without tipping his hand, Elop spoke with Mobilized last week about the pros and cons of the various options. The interview came before releasing his big “burning platform” memo and literally as the final decision was being made.

For Elop, it came down to which approach would offer enough differentiation and yet would also be part of an ecosystem that would be large enough to attract developers, advertisers, carriers and all the other partners.

“It’s not just differentiation but sustainable differentiation,” Elop said. He also said that as big as Nokia is, it can’t afford to go it alone.

It is also critically important to Elop that the company be more competitive in the United States. Although the company ships more phones worldwide than any other company, its presence in North America is basically nonexistent. And yet, he said, the U.S. is where the pace is set for the high end of the market.

“We need to be in the United States in one way, shape or form,” Elop said. “We have to have a viable way to reopen doors.”

So where did that leave the various options?

Although MeeGo left plenty of room for differentiation, that option would also mean trying to be unique at the same time, as the company would have to convince others to build on the platform.

“For it to be a valid ecosystem, that also implies other [phone makers]–our competitors–would be attracted to it as well,” Elop said. “That’s one of the things that give it critical mass and credibility.”

Although Elop didn’t say so in our interview, his comments in this week’s memo suggest that his confidence there was low.

“We thought MeeGo would be a platform for winning high-end smartphones,” Elop said in his memo to staff. “However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.”

As for Android and Windows Phone, Elop said Nokia could offer a significant boost to either ecosystem.

“Android is growing very nicely; it has significant market share,” he said. “The combination of Android’s existing market share plus the market share that Nokia could bring to the Android ecosystem is a very large number and would signal a very substantial shift in the dynamics of the mobile operating system market.”

As for Redmond’s operating system, Elop said it is early days.

“Windows Phone is in its early formative stages in terms of getting customer traction and so forth. It’s a beautiful product and I say that as someone who is competing with it.”

However, that may not be the case much longer. While Elop was still leaving all doors open when he spoke with Mobilized a week ago, the options appear to have narrowed significantly in recent days. His memo on Tuesday appeared to rule out MeeGo as the best option, while a tweet from Google’s Vic Gundotra suggests Android is out and a tie-up with WIndows Phone is Elop’s final choice.

But, no matter what decision gets made at the high end, Elop said that the company probably needs a separate strategy at the low end of the market, where there is intense competition from Chinese phone makers building phones around low-cost chips from MediaTek.

Friday’s investor meeting will also address other aspects of the company, including its services strategy, its plans for its Navteq navigation unit and its plans to leverage its huge patent portfolio. The announcement also comes just ahead of the cell phone industry’s big trade show, Mobile World Congress, which gets going on Sunday in Barcelona.

Mobilized is here in London and will have live coverage of the meeting, which kicks off at 11 am local time. That’s 3 am PT, so set those alarm clocks early.

While many will observe that the company’s interest in Android appears to be timed closely with the loss of its iPhone exclusivity, the company said the strategy shift has been in the works for many months and has more to do with the fact that the company is moving to faster networks and needs devices that will really tap their power.

“They create highly functional, highly capable smartphones that run really well with our network,” Chief Marketing Officer David Christopher said. “That hits the sweet spot of our network.”

Whatever the case, AT&T has committed to having a dozen new Android products this year, including both phones and tablets.

The company introduced the first three phones at January’s Consumer Electronics Show, where it showed off Android smartphones from Samsung and HTC, as well as the intriguing Motorola Atrix, which is a powerful Android phone on its own, but can also plug into a laptop dock and power a full desktop Web browsing experience. It is also trying to break new pricing ground in selling the HTC Inspire for just $99 with a new contract.

However, there’s more to the strategy than just interesting devices at low prices. Christopher said AT&T is committed to working more closely with phone makers and Google.

“The Atrix is the best example of that,” he said. “We got involved very early in development of that product with Motorola and Google.”

However, the company isn’t looking to do all kinds of work to customize Android.

“We don’t think we have to control every element of the smartphone at all,” he said. “Our strategy has been more to partner smartly and add value where we think we have the strongest assets to bring to bear.”

Christopher pointed to location services, such as a feature that helps keep tabs on family members, as an example of where the company sees investment paying off. Carrier billing for apps and services is another area where the company has tried to lead, he said.

While many of the 12 Android devices planned for 2011 are phones, some will also be tablets, Christopher said, including the Motorola Xoom that was announced at CES. However, Christopher won’t say when that device–which is headed soon to Verizon–will make it to AT&T.

Christopher said the tablet arena is still wide open and that the company is looking far and wide in terms of which devices to offer. In addition to the iPad–which AT&T already carries–and the Android devices, other device makers such as Research in Motion and Hewlett-Packard are taking aim at the space.

“There’s going to be tablet innovation happening across the industry,” Christopher said. “Over time, I think the market will choose.”

In the meantime, Christopher said, the company will follow the same strategy it has taken with phones–offer lots of options.

“There are others as well,” he said, suggesting there are some other brands that could also find their way onto the company’s shelves. “We are casting a very wide net.”

AT&T also wants to find ways to get customers to have multiple devices running on its network. The company has taken a step toward that with the introduction of a new mobile hotspot plan that offers more data to customers who are sharing their phone’s data connection with other devices, either directly or over Wi-Fi.

But more can be done, Christopher said.

Among the options would be to have some sort of pool plan, where a customer could share data across multiple devices. Christopher said that is among many pricing possibillites that AT&T is considering: “That is one that potentially is interesting.”

Netflix’s dramatic growth in user base and market cap have had a lot to do with the company anticipating market changes and making audacious bets, but it has been relatively plodding and hesitant about getting social.

Netflix explained in the shareholder letter (PDF) accompanying its quarterly earnings report that its Facebook integration will accompany an effort to split household accounts into multiple personal accounts.

In part because of the company’s history as a DVD mailing service, a Netflix account is affiliated with a particular address. That’s also the way traditional television providers measure their market: In terms of households.

But online video, Netflix notes, “is more naturally individual, since it is watched on personal screens like phones, tablets, and laptops, as well as on shared large screen televisions.”

In addition to helping identify discrete people within a household, Facebook integration would presumably allow Netflix to help users do things like share their personal viewing history in their newsfeed and recommend videos to friends. Understanding social networks could improve Netflix’s famously honed recommendation algorithm. It might also be an opportunity for Netflix to create social viewing experiences.

Currently, Netflix lacks much in the way of social features; it had yanked a previous effort to offer social sharing last year after saying that relatively few subscribers used it.

However, the company has recently staffed up for a renewed social effort.

Mike Hart, previously Netflix’s director of engineering for APIs, is now director of engineering for social. Hart told Fast Company in November that Netflix sees social as an international user acquisition strategy and an opportunity to avoid disruption by a competitor that is more social.

Netflix also appears to view personal accounts as an opportunity to charge more money. The company said in the shareholder letter that later this year it will start offering new account options that include multiple simultaneous streams. (So, for instance, you could stream TV episodes in the bedroom on your iPad while your spouse watches a movie in the living room through the Roku.) The streaming-only plan Netflix recently launched costs $7.99 (which some industry watchers say is too cheap) and allows just one stream at a time.

Netflix noted in the letter that its new grand internal vision is to target the number of active mobile phones in an area, rather than the number of households (though that might be a bit ambitious in places where it’s common for people to have more than one phone!).

Please see the disclosure about Facebook in my ethics statement.

And with 9.2 million Google shares, it’s not like he needs the money, though his stake has suffered a significant decline in value since the company’s executive office shake-up. Prior to the announcement, Google shares were trading at around $641, making Schmidt’s stake worth about $5.9 billion. Today, they’re hovering around $608, making that stake worth $5.6 billion–down $300 million on news he’s stepping down as CEO. That’s a nasty little drop any way you look at it, though I’m sure the obscene size of the remaining sum makes it a bit easier to stomach. Perhaps the residuals from that new Eric Schmidt talk show reportedly in the offing will make up for it….

PREVIOUSLY:

• Talking Schmidt: Google’s CEO in His Own Words
• A Big Quarter From Google, and Shake-Up at the Top–Larry Page to Become CEO

One area of apps involves gaming. I’m not just referring to the single player, heads-down games that consume a person for hours until she beats her own best score, or the scores of strangers around the Internet—though plenty of those exist for the tablet. I’m talking about old-fashioned board games, the kind that involve sitting around with friends or family and actually having fun together. Some of these apps are purely digital. But one company is bringing real board-like elements to tablet games.

This week, I tested a game that successfully marries digital and analog games by using the first physical device to digitally interact with the Apple iPad screen. The $40 Duo by Discovery Bay Games (yoomigame.com) doesn’t plug into the iPad, nor does it connect to the iPad via Bluetooth or other means. It sits on the iPad screen in a specific spot and uses a built-in light sensor on its underbelly to interpret light signals displayed on the iPad screen during a game.

To play the Yoomi game with Discovery Bay Games’ Duo, players drop jewel-like tokens onto the top of the device to vote on possible answers to questions.

The first accompanying game app to use the Duo, called Yoomi, is free from the Apple App Store and can be played by kids as young as 3 years old. It simply asks players to guess what one person would choose between two possible answers, or options, both of which are displayed as digital cards with text and images on the iPad screen. Cards include options like, “dig a hole to China” or “find buried treasure.” Up to six people or teams can play, and each receives a set of jewel-toned tokens that they’ll try to get rid of before the other players by guessing each person’s choice. Playful music and sound effects accompany each game.

Players cast their votes by placing tokens on one of two spaces atop the Duo, a plastic hollow device with clear sides and a tiny black switch. Each space represents an answer, and the person about whom everyone else guesses privately chooses one answer by reaching into the Duo and touching the iPad screen to select the answer.

After the other players cast their votes, a Reveal button on the iPad screen uncovers the chosen answer. Suddenly, the space at the top of the Duo representing the correct chosen answer drops like a trap door, collecting all tokens that were there. The iPad is passed to the next person and play continues, with each person selecting an answer for others to guess until one person or team is out of tokens.

At first, I was skeptical that the Duo and the Yoomi game could replicate playing with traditional board games. Since so few aspects of my life aren’t touched by digital technology, putting down my laptop, iPad or BlackBerry to play a board game always feels like a treat. But I found that while playing Yoomi, the iPad becomes the game board, stationed in the center of a table or circle of friends and passed around for each person to cast a vote.

Since the iPad has plenty of additional functions, playing a game on it may invite distractions from the outside world. Other apps continued to work in the background on my iPad, like my Facebook and Entertainment Weekly apps, which send occasional pop-up notifications onto the screen. The thought of personal Facebook messages popping up would be enough to embarrass any teen into not wanting to use his or her iPad to play with family members. On a good note, the chime indicating I received a new email on the iPad was automatically silenced during game play.

And of course, the iPad costs at least $500, so even though the $40 Duo is relatively affordable, the whole set won’t fit most family budgets.

Still, several advantages come from using a digital game that incorporates physical components, like tokens and a device that collects those tokens. Instead of holding a controller and staring at a TV, like with video games, players need to look up at one another to see how many tokens each person has and who’s winning. And the Yoomi game questions are provocative enough that people will want to ask one another why they chose their answers or voted a certain way.

One of the most exciting things about this technology is its ability to use a light sensor for communication between the iPad screen and another object. Discovery Bay Games CEO Craig Olson said the company might consider using this technology for other products such as a health-related device that, when placed on the iPad screen, allows data to be automatically recognized and recorded.

Like other digital apps, Yoomi can be updated with new content to replenish the 150 pairs of digital cards that come loaded with this free game; another 150 pairs will be sent in an update later this year. Mr. Olson said people tend to burn through digital games much faster than traditional board games, and the ability to send new game material without manufacturing and delivering physical parts is a real boon.

The people working at Discovery Bay Games know a thing or two about traditional board games: Numerous Discovery Bay Games employees worked at Cranium, the charades-esque game that gets people humming, whistling, drawing with closed eyes and miming. Duo is likewise deliberately designed to encourage interaction with others.

In the next nine months, some 12 to 15 other iPad app games will be released for use with Duo, including a $2.99 Smithsonian Fact or Fiction game and a $2.99 Discovery for Kids–Astonishing Comparisons game.

This summer, Discovery Bay Games will start releasing other physical devices that will work with the iPad and range in price from $30 to $60. Some will use the light-sensor technology while others will use different signaling methods to communicate with the iPad. These will launch in conjunction with lead titles, like a Highlights for Children game and a Saturday Night Live game. Mr. Olson said the company is developing for the Android platform as well as for Windows 7 devices.

For now, the Duo and Yoomi are a fun way to add technology into family game night, with continuously updated content keeping game material fresh. As games improve to take full advantage of the other tablet functions, they’ll become even more enjoyable and interactive.

Write to Katherine Boehret at katie.boehret@wsj.com

Notice to Readers

Starting today, The Mossberg Solution column becomes The Digital Solution. It will still be written by Katherine Boehret and edited by Walter S. Mossberg.