Last week, I talked to Punit Soni, who runs games and mobile for Google+, to get an update on Google’s plan for social games. Since the conversation took place before Facebook’s filing, Soni has no direct responses to the numbers.

But he addresses in general how Google expects to challenge Facebook’s dominance in social gaming, and the big opportunity in front of them to do something different.

“There’s no point in being in this game if we are a ‘me-too,’” he said. “We want to be different.”

Yesterday, in Facebook’s IPO filing we learned that substantially all of the company’s payments revenue is coming from virtual goods from inside social games, and that one game publisher alone — Zynga — is contributing 12 percent of the company’s revenue, payments and advertising included.

At those rates, it’s easy to see why Google is emphasizing games and wooing developers to its platform.

It started off with a bang in August, when it launched games. In talking to reporters, Soni announced the company was sharing 95 percent of the revenue from virtual goods with developers, and was keeping only 5 percent for itself.

That was, and remains, much more generous than the 30 percent cut that Facebook takes.

Still, with only 36 games on its network, and far fewer users (however you want to calculate it), Soni was pretty honest about how far they still have to go. He was also extremely enthusiastic, and at times looked as if he wanted to leap out of his chair to get going on some of the projects Google had planned.

First, and foremost, he said they are working hard to get virality right; and second, they want to nail cross-platform, so that games worked seamlessly across the Web and mobile.

Viral channels are the most common way for people to learn about a game, and also one of the most controversial.

More than a year ago, Facebook was forced to dial back those channels, because users complained about receiving too many unwanted messages.

“We err on the side of caution,” Soni said. “We are slowly giving more options to do things.”

Soni said they also see a big opportunity to differentiate by offering a multiplatform approach, and letting developers build games that work across Google+, Google’s Chrome Web Store and mobile. Of course, it has an advantage because of the millions of Android users, whereas Facebook’s mobile efforts are still nascent.

Already, there are some examples of cross-platform play.

Today, you can play Rovio’s Angry Birds and Bubble Witch Saga across both Google+ and the Chrome App Store, and can pick up where you left off between the two.

“These are not Google+ games, but games that are on Google,” Soni stressed. “A lot more is coming on mobile.”

Google has also focused on getting a number of games as exclusives that launch a few weeks on Google+ before they show up on Facebook. To date, it has scored at least three titles — including a major title, Kabam’s Godfather — and there are more coming.

Asked why the game developers are willing to go exclusively on Google+, Soni said there’s some marketing that Google is willing to put toward it, but otherwise, “they are betting on us.”

He says it’s mostly the potential of the platform, and the fact that he’s receptive to feedback, that helps him understand exactly what developers need. Developers also acknowledge that supporting more platforms is helpful in reaching more players and diversifying their risk.

“If they say it’s because the platform is the best ever — no, it’s not true. But the plans we have and the sensitivity that we have for our users and developers, we will be very good sometime soon. … That’s why you are seeing exclusives.”

Soni wasn’t wiling to spill specific plans about what was launching next, but said a lot more is coming.

“We are a start-up platform. We are humble and know our flaws. As we grow, you’ll see new things. My work has barely started,” he said.

The New York-based company, which sells travel deals and daily deals via email and from its Web site, said fourth-quarter revenues totaled $35.2 million, falling below analyst expectations of $38.7 million.

However, Travelzoo did manage to return a healthy profit of 40 cents a share, exceeding estimates of 35 cents a share, according to Thomson Reuters, which conducted a survey of analysts.

The company is Groupon’s closest publicly held competitor, other than Google or Amazon, which don’t break out results from daily deals. Groupon was also trading lower today, falling about 3 percent, or 59 cents, to $19.49 a share. Groupon will report fourth-quarter earnings in two weeks on Feb. 8.

In a statement, CEO Chris Loughlin said despite a slower period for travel advertising in the fourth quarter, revenues in that period grew faster year over year than in any quarter in four years.

A majority of its revenues are still coming from travel. For instance, in 2011, Travelzoo reported that 57.8 percent of deals sold were for travel and only 26.7 percent came from local discounts. Search revenues coming from comparison shopping sites such as SuperSearch and Fly.com made up for the remainder.

Still, it is local that is growing the fastest. In North America, local deals grew 196 percent year over year.

The company ended the period with 21.5 million subscribers in North America and Europe, up 14 percent from the end of 2010.

The yellow-handled hammer, which the eBay CEO purchased at Home Depot using PayPal, signals that the company’s plans for entering the mobile payments business has entered the construction phase.

In an interview yesterday, Donahoe provided a few details about the company’s Home Depot trial and how it would expand from five to 51 stores across the country over the next week.

He also talked about his own experience of buying the tool earlier that morning. (Seen at right: Donahoe wielding his hammer.)

The company also announced fourth-quarter results yesterday, solidly beating both the company’s internal guidance and analyst expectations.

One of eBay’s big initiatives over the past year has been to find ways to work more closely with physical retailers by providing them with the technology they need to operate more efficiently online and offline. Over the past year, that has included buying 13 companies, for a total investment of $3.4 billion.

“We are right at the intersection of something that’s really cool,” Donahoe said. “This isn’t something that everyone sees, like social networking three years into it, when only the early people knew about it.”

What everyone is not seeing, he explains, is how retail and payments are two massive industries that are “at an inflection point where they will go through dramatic change.”

One major opportunity is payments being made at the cash register, and arguably many others see it, too, including Google, Visa, MasterCard and the wireless carriers, which are all working on their own solutions.

Interestingly, Donahoe was willing to put a price on it — and it’s huge.

If eBay is able to capture just 2 percent of the sales occurring at the point of sale, it will be able to double PayPal’s $70 billion business today. If they capture 4 percent, they’ll triple it.

Of course, that will take some time.

This year, eBay is focused on learning and testing out the technology in several trials; then, in 2013, it will begin to scale the business. In 2012, the company is not even factoring in a lift from point of sales in eBay’s revenue guidance.

The company’s big test will start later this week, when it expands its trial with Home Depot from five stores in the Bay Area to 51 stores in the Bay Area, Atlanta and Omaha.

Everything continues to be on track, despite the unexpected departure of PayPal President Scott Thompson. Thompson shocked Donahoe right after the New Year with the announcement that he was leaving to become CEO of Yahoo.

Donahoe declined to give an update on his plans to replace Thompson, saying that he was fine with serving the interim role in the meantime, and relying on the rest of the team PayPal has in place.

So far, Donahoe said, the mobile payments technology works flawlessly, based on his own experiences, but there’s still some additional scenarios they will have to consider.

Yesterday morning, he drove to a store in San Jose, where he consciously left his wallet and phone in the car.

He walked through the aisles to find a hammer and tape measure, and then went to check out, where the terminal gave him the option of checking out with PayPal. He entered his mobile phone number and PIN, and the transaction was completed, with the receipts sent to his phone and email.

“It was faster than swiping the card,” Donahoe said. “This is an advantage that PayPal has. No one else can do it with a mobile number and PIN. There was no fancy whiz-bang technology.”

Customers will also be given the option of paying with a PayPal credit card.

But not all the pieces are in place yet.

Coming soon: Users will be able to store their loyalty cards in their PayPal wallet, and will be able to receive personalized offers based on their shopping habits.

Also, it’s worth noting that while Donahoe checked out easily, there will be a learning curve for others. In advance of going to the store, users will have to associate a phone number and PIN with their account, and enable their account for in-store checkout.

Right now, there’s no contingency plans for if a person doesn’t have a PayPal account, or if it’s not set up. In fact, a very small percentage of the more than 100 million PayPal users have likely done that.

“That’s exactly why I say this is the year for trialing and learning,” Donahoe said, appropriately adjourning the interview with a bang of the hammer.

He is forecasting that mobile commerce — purchases made from apps or the browser on a phone or tablet — will hit $8 billion in mobile gross merchandise volume this year, up 60 percent from $5 billion in 2011.

Donahoe made the predictions last night in Las Vegas, where he gave the keynote at a technology dinner for leaders of the Consumer Electronics Association.

Additionally, the company predicted that PayPal will reach $7 billion in mobile total payment volume this year, increasing from $4 billion in 2011.

He made the bold predictions despite the recent unsettling departure of PayPal President Scott Thompson to join Yahoo as CEO, indicating that he is still confident about PayPal’s mobile future.

During the keynote, Donahoe also announced that Best Buy was its newest partner to use the RedLaser barcode scanning app to offer local in-store pick-up services. Other companies that offer it today include Toys “R” Us.

Other big data figures: 

• EBay Mobile currently has more than 65 million downloads of its mobile applications across all platforms.
• More than 890,000 new eBay shoppers made their first eBay purchase through the company’s mobile apps in 2011, a 113 percent increase year over year.
• PayPal’s original prediction for 2011 was that it would achieve $1.5 billion in mobile total payment volume for 2011. Instead, it hit $4 billion. A year earlier, it totaled only $750 million.

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Ryan called AllThingsD this morning to clear the air after a report in BetaBeat painted a fairly grim picture of the situation.

BetaBeat reported this morning that as many as 170 employees would be laid off today; that Gilt Taste, the company’s high-end grocery site, was likely to be closed down; and that Jetsetter, its travel operations, was likely to be merged with Gilt City, its daily deal division.

On pretty much all accounts, Ryan declared not guilty.

“We are not closing down any businesses. We are not closing down Gilt Taste, and we aren’t merging Gilt City and Jetsetter,” he said.

Additionally, another new division, Park & Bond, which sells full-priced men’s clothing, is also doing well. “In its fifth month of business, Park & Bond did more revenue than any other business in its fifth month,” Ryan added.

The one grain of truth in all of it, he said, is that over the next couple of months, he expects to selectively trim staff by roughly 50 employees.

But for emphasis, he added, the company will still end up having more employees by the end of March than it does now.

“It’s pretty minimal in the scheme of having 900 employees,” he said. “Not only will we do that [have cutbacks], but we will continue to do that. What Gilt needs to be, and is doing, is to create a fantastic consumer experience while running an efficient company.”

He said the company achieved its goal of generating $500 million in June and now is setting its sights on transitioning the business from a money-losing organization to cash-flow break even this year.

He also said that Gilt Groupe, which raised $138 million in capital last May, is on track for an IPO, perhaps as early as the fourth quarter, but more likely in 2013.

“The timing feels about right, and we are on a steady progression,” said Ryan, who declined to give revenue estimates for this year because the company is in the sensitive lead-up to a public offering.

Ryan named two divisions that may see cuts over the next couple of months: Gilt Taste and Gilt City.

In October, Gilt City purchased BuyWithMe, and although it hired only 20-25 of the deal provider’s 190 employees, Ryan said they probably don’t need that many going forward now that the integration has been completed.

Additionally, he said there are some inefficiencies within Gilt Taste.

Ryan characterized the site as “doing great,” but said it will need fewer staffers now that it is up and running. At first, it needed to negotiate deals with dozens of vendors and shoot photos of the more than 1,000 products on the site.

Now that they’ve hit a baseline of items, they’ll probably add only a couple hundred new products a year, reducing the need for so much staff.

“There’s much less work to do there,” Ryan said. “With flash sales, you have to do that process every week, but in the full-priced business, there’s greater start-up costs. That’s part of the business.”

In particular, BetaBeat said Park & Bond President John Auerbach was likely to leave the company.

Ryan said there’s always the chance one of the top 15 executives could leave, whether it was their decision or the company’s, but that Auerbach is still working there as of now.

The San Francisco social games company is looking to raise as much as $1.15 billion, which would make it the largest IPO from a U.S. Internet company since Google raised $1.7 billion in 2004.

Shares will likely be sold on Thursday, with the company trading under the ticker ZNGA for the first time on Friday. In the meantime, the company is trying to jockey for the best price and the most shares sold.

At a luncheon yesterday with potential investors, CEO Mark Pincus made one of his boldest predictions yet when it comes to how well its games will monetize.

Currently, Zynga has about 227 million monthly active users who play games for free on Facebook, such as FarmVille, CityVille, Zynga Poker and Mafia Wars. But only a small fraction — around 3 percent — pay for additional features, such as decorative items for a farm or new clothes for an avatar.

“We could see that doubling,” said Pincus, according to Reuters.

Doubling? That’s sure to whet investors’ appetites.

But it’s hard to know how the company will accomplish that.

To be sure, Zynga is about to enter one of its biggest growth periods yet and anticipates launching several new games over the next few months.

On one level, more games will likely translate to more players. But will it translate to more players willing to pay?

That seems like a leap of faith.

However, based on documents filed with the Securities & Exchange Commission, we have gleaned that some of Zynga’s growth prospects are guaranteed thanks to the company’s close – albeit complicated – relationship with Facebook.

As one of the conditions of its partnerships, Facebook is obligated to help Zynga meet certain growth targets. In return, Zynga has committed to offering Facebook a number of exclusive game titles.

The specific details of the relationship were redacted in the document, so it’s not clear how aggressive those growth targets are over the five-year life of the contract.

Zynga also has close ties with Google, which has recently launched its own games network. Zynga has already launched several titles there, including CityVille. Following the offering, Google will own 3.8 percent of the company.

Also during yesterday’s lunch, Zynga’s executives were grilled about player retention and churn rates and its growth prospects for mobile.

Among several responses, Pincus joked about how Alec Baldwin was recently kicked off a flight after getting caught playing Words With Friends while still at the gate.

It seemed investors were not as interested in hearing about recent negative reports that Pincus’s hard-charging personality has made it an unfavorable working environment or that some employees were asked to give up their stock options.

Plus, it’s a crowd that Pincus should be comfortable speaking in front of. This will be the second company the Wharton and Harvard Business School grad has taken public.

The company will continue to have meetings today and into next week. So far, reports indicate that the conversations are going well.

Zynga has apparently already received enough orders to cover all the shares being sold in its initial public offering, reports BusinessWeek, which talked to two people with knowledge of the situation. Zynga plans to sell 100 million shares for $8.50 to $10 apiece, which would value the company at as much as $7 billion.

On the site, shoppers add — or “follow” — celebrities and experts who share similar interests, to receive recommendations on the latest food, fashion, design and style.

In that way, OpenSky pushes product ideas to shoppers, somewhat in the way Twitter lets people discover information versus having to search for an answer on Google.

Caplan told me OpenSky has raised $30 million in fresh capital to continue building out the business.

The New York-based company, with offices in Los Angeles and Nashville, is only six months old and previously raised $19 million in two prior rounds.

New investor Providence Equity Partners led the financing. Existing investors Highland Capital Partners, Canaan Partners and the Raine Group also participated.

Some of the company’s talent includes celebrity chefs such as Bobby Flay and Italian food expert Lidia Bastianich, and pop culture figures like actress and reality TV star Kristin Cavallari, who will advise customers on the latest fashions.

In a recent offering, Flay, who has 164,626 followers, advised shoppers to purchase a spice bundle for $23. Fitness guru and motivation speaker Gabrielle Bernstein recommended a collapsible Hula-Hoop that’s easy to travel with.

Caplan said it’s an approach that’s really resonating with shoppers, particularly women in their 30s.

He said the company will break $1 million in sales this month and is on track for a $10 million run rate. Both order volume and revenues are growing 50 percent month over month.

The company already has 600,000 members signed up; they are now connecting to millions of shopping “experts.” It took the first 14 weeks for OpenSky to hit one million connections, 10 weeks to get its second million and three weeks to reach its third million. Customers are spending $50 on the average transaction, which is more than double Amazon’s average order of $22, Caplan said.

“This feels like such a modern way to shop, compared to the search box,” Caplan said. “There’s not a lot of soul in online shopping. We are putting the soul back into shopping.”

He added that walking into actual stores is engaging and entertaining. “I think Amazon is a fantastic company, and they have a lot of things they do really brilliantly, but I don’t think it’s the best way to shop.”

Many companies right now are challenging the original e-commerce model, and for good reason. Kleiner Perkins partner Mary Meeker noted in a report last week that e-commerce makes up 8 percent of overall commerce in the U.S. today, and continues to climb.

Caplan said the capital will be used to add more shopping verticals and experts to the site. Today, it has 75, with hundreds more coming.

As the former president of About.com, which relied on a distributed workforce to contribute answers to the site, Caplan believes he knows exactly how to get the business to click.

To make money, OpenSky is splitting the gross profit from the items sold with the experts on the site. It’s free to join as a member, and there’s a 90-day money-back guarantee. So far, it has experienced a 1 percent return rate.

“I personally love businesses where you partner with talent and create talent,” he said.

In a study conducted by SuperData Research on behalf of Viximo, a social games and applications platform, it found that non-Facebook social gaming will explode to $5.6 billion in 2014, up from an estimated $3.2 billion this year.

At that level, the study found that it will represent 65 percent of the overall projected revenue, including both Facebook and non-Facebook social gaming networks, which together are expected to hit $8.6 billion in 2014.

Most of the non-Facebook revenue will be driven by international markets, where Facebook is not dominant, including Asia, Russia, Brazil and Turkey.

Some of the social networks include Hyves in the Netherlands; Tuenti in Spain; StudiVZ, a student-focused site in Germany; and Badoo, a dating site in the U.K. The study does not take into account the entrance of Google into the industry with its games network on Google+.

Other findings:

• Asia is the largest market for social games, with an estimated $2 billion in total revenue for 2011.
• Russia and Brazil also have large social gaming audiences, with 35 million and 32.6 million people, respectively.
• Germany’s social gaming revenue is expected to increase to $250 million in 2014, up from $173 million in 2011.

In the second quarter, Zynga said its “bookings,” which are sales recorded during the same three-month period, dipped four percent. Additionally, it said three million fewer people played Zynga games on a daily basis than in the previous quarter.

After the company’s updated IPO filing was released last week, critics have been dissecting the results and coming to the conclusion that the drop in bookings is a sign of things to come. So, is it?

Probably not.

In fact, the San Francisco social games company, which is seeking to raise $1 billion in the public markets, may be gearing up for its second wind.

In the first half of the year, Zynga launched only one major game — Empires & Allies — to break a five-month hiatus.

Since then, it has moved quickly, announcing two other major releases: Adventure World and Mafia Wars 2. In addition, it has launched a number of minor releases, including an expansion to FrontierVille, as well as Words With Friends, which was brought over to Facebook from mobile.

It has also launched two titles on Google’s new games network, and it is making a big announcement — called “Zynga Unleashed” — on Oct. 11, at a press event at its new headquarters.

Today, Zynga is looking a lot more like an entertainment company that must continue to deliver new hits in order to gain new players, much like a TV studio needs to produce new sitcoms in order to get more viewers. Practically speaking, if Zynga doesn’t release a new game, then it won’t see a lift in users.

While Empires & Allies was technically launched in the second quarter, it launched in June, so it would have only one month of results before the end of the quarter.

Given that it launched virtually no games for five straight months, the second quarter still performed fairly well.

In that quarter, Zynga’s revenue totaled $279.1 million, increasing 115 percent compared to the same period in 2010.

More to the point, the new titles it has launched since then have already garnered millions of new players.

Empires & Allies is attracting nearly five million daily active users; Adventure World is clocking 4.5 million; Words With Friends is bringing in four million; and FrontierVille’s Pioneer Trail is garnering 2.4 million, according to AppData.com. All told, that’s about 15 million more users, which exceeds the 13 million players who play CityVille, the most popular game on Facebook.

Getting more players is key because fewer than five percent of its players actually pay to play. The big question will be whether the new games will be enough to offset Zynga’s older games that are either stagnant or losing players.

In fact, it’s moving so quickly that a research firm that released a report only five months ago is already revising its projections upward for the year.

BIA/Kelsey now believes that consumer spending on deals in the U.S. will hit $2 billion, up from its previous forecast of $1.2 billion.

In a release, the research firm said the growth is being fueled by a larger number of registered users who are actively buying deals, better targeting capabilities and new niches in the space, including flash sales sites, which offer deals on apparel and other categories for a limited time via email.

Calculating spending habits in the space is likely difficult, given that Groupon is the only company that has publicly disclosed its figures in its registration statement.

Mark Fratrik, BIA/Kelsey VP and chief economist, said despite the revisions, the firm sees a ceiling coming “on how many deals consumers will buy and their overall interest levels in deals.”

Because of that, the report was less bullish on the industry’s five-year prospects. The research firm also increased its long-term view on the space, although more modestly, saying that in 2015 it expects spending to hit $4.2 billion, up from its previous forecast of $3.9 billion in March.

Both numbers far exceed the $873 million that the research firm estimates was spent in 2010.

Coincidentally, Groupon said its second-quarter revenues increased to almost exactly that much, or $878 million, which is a worldwide total.

The forecast was included as part of the company’s first-quarter results released today.

In February, Nordstrom agreed to acquire four-year-old HauteLook, marking the department store’s first foray into online private sales. Such sales, also called flash sales, liquidate excess inventory by offering steep discounts to members who have signed up for daily email.

Nordstrom paid $180 million in stock for the company, which is now close to HauteLook’s annual sales. If the company meets certain performance goals, the transaction size could jump to as much as $270 million over time.

For Nordstrom, the revenue stream is fairly insignificant. In the first quarter, net sales for the department store totaled $2.23 billion, an increase of 12 percent compared with the same period in 2010.

The acquisition will also hit the company’s bottom line. Charges associated with the HauteLook acquisition, including stock-based compensation, reduced earnings per share in the first quarter by four cents, and is estimated to impact full-year results by about $0.20 a share.

Gilt Groupe, which is also in the flash sales business, announced earlier this week that it had raised $138 million in capital at a reported $1 billion valuation. It previously said it expected to record $500 million in revenues for its fiscal year ending in June.

The Seattle-based company said revenues totaled $9.86 billion, compared with $7.13 billion in the year-ago period, and that net income decreased 33 percent to $201 million or 44 cents a share.

In a statement, Jeff Bezos, Amazon’s founder and CEO, said: “We love inventing on behalf of customers and have never been more excited about the long-term opportunities.”

But you have to wonder how much investors love it.

The company’s stock dropped $3.12, or 1.7 percent, in regular hours, and then slid another 90 cents in after-hours trading.

Besides investments, analysts questioned what impact the Japanese earthquake had on Amazon’s results, since the region is particularly strong for the company. Here’s updates from the call on that subject, as well as news from Amazon that it will start selling its ad-subsidized Kindle a week early.

In some regards the quarter demonstrates a return to the company’s frothy days when the motto was get big fast, and then later, that morphed into get bigger faster.

To be sure, the company is dipping its toes into a variety of pools, ranging from cloud computing to traditional e-commerce to digital commerce. It’s building hardware, such as the Kindle e-reader, announcing a new version recently that’s supported by advertising. It’s also just beginning to reveal where it’s mobile strategy is going with a promotion that crosses both its Android Appstore and its handset business.

To be sure, one of those growing pains was felt last week when when its cloud services crashed, leading to outages for nearly a week. The company did not comment on the crash in its earnings release, but it will likely have to answer analyst questions during this afternoon’s call.

Still, Amazon was able to meet its own sale forecasts, which predicted net sales of between $9.1 billion and $9.9 billion.

Sales also exceeded analyst expectations, who were hoping for revenues of $9.54 billion, representing a 34 percent increase from the same period last year, according to consensus forecasts from FactSet Research. However, Amazon fell way short of analyst’s earnings estimates of 61 cents a share. Amazon reported 44 cents a share for the quarter.

In the second quarter, Amazon is predicting software net sales ranging between $8.85 billion and $9.65 billion, representing year-over-year growth of 35 percent and 47 percent. Operating income is expected to be between $95 million and $245 million, declining by 9 percent to 65 percent.

Katzenberg, who created the animation studio along with Steven Spielberg and David Geffen, marks the sixth board member of the privately held social games company, which earned a jaw-dropping profit of $400 million on $850 million in revenues last year.

Zynga’s CEO and Founder Mark Pincus made the announcement in a blog post today on the company’s Web site: “I knew he’d be a great fit for the board after he suggested that the blockbuster of 2011 could be ShrekVille.”

Pincus continued to joke that Katzenberg will help recruit a seventh member to the board (maybe Jack Black or Mike Myers?).

But more seriously, Katzenberg’s appointment signals Zynga’s desire to evolve from a well-recognized–and successful–Silicon Valley start-up to a large consumer brand name and entertainment company.

Social gaming on Facebook so far is in its infancy.

Zynga has been able to profit handsomely off no-name games, like FarmVille, CityVille and Mafia Wars. Critics argue that it will have to turn those franchises into brands as the market matures and gets inundated by well-recognized brands. That progression has already started to take shape with Electronic Arts’ acquisition of Playfish and what Disney has planned with its purchase of Playdom.

Having an answer to this question will be key as Zynga considers raising up to $250 million in capital, and positions itself for a potential IPO.

“DreamWorks Animation is a revolutionary technology company, a recognized consumer brand, and at its core, a media company. It’s easy to see the value that Jeffrey will add to Zynga as we grow and look for more ways to delight our players,” Pincus wrote.

In a statement, he added: “Jeffrey redefined storytelling when he launched DreamWorks Animation. He turned an independent studio into a brand name and his vision will be an asset as we work to define the future of play.”

Katzenberg can offer that outside perspective as the board’s only member not in Silicon Valley. He joins Pincus; Owen Van Natta, Zynga’s EVP of Business; Bing Gordon, partner at Kleiner Perkins; Brad Feld, managing director of Foundry Group; and Reid Hoffman, founder and chairman of LinkedIn.

Here’s the full video from Katzenberg’s appearance at last year’s D conference:

]]> http://allthingsd.com/20110404/zynga-appoints-dreamworks-ceo-to-board-but-no-shrekville-in-the-works/feed/ 1 http://allthingsd.com/20110303/daily-deal-revenues-could-soar-to-6-billion-in-2015/ http://allthingsd.com/20110303/daily-deal-revenues-could-soar-to-6-billion-in-2015/#comments Thu, 03 Mar 2011 08:01:56 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3253 Spending on U.S. daily deals could soar as much as $3.9 billion in the next four years, up from only $873 million in 2010.

The estimates were released today by BIA/Kelsey, but seem conservative given some of the official figures known about the largest players in the space.

For instance, Groupon turned down a $6 billion offer from Google late last year, and then raised nearly $1 billion in venture capital.

Groupon also recently disclosed in an internal memo that it saw its revenue surge to $760 million last year from $33 million the previous year (although more than a third of its 2010 sales came from outside the U.S.).

But that’s only Groupon.

The No. 2 player in the space, LivingSocial, which raised $175 million from Amazon.com, said it was booking revenues of more than $1 million a day and is projected to record well over $500 million in revenue in 2011.

Both companies are well-positioned with nearly 200 other players trying to get into the space, and as of March 1, deals were being offered in 178 cities, reaching 102 million people, according to the research firm, which is hosting an event on the topic later this month in Boston.

The daily deal providers operate by building large local sales forces that negotiate deals on services and products at roughly 50 percent off. Customers then purchase the vouchers in advance, and the companies keep about half of the revenues from the sale.

BIA/Kelsey said its revenue expectations factor in that the novelty of these group-buying discounts will fade and e-mail open rates will fall as time passes. In its most optimistic scenario, U.S. revenues could hit as much as $6.1 billion in 2015.

]]> http://allthingsd.com/20110303/daily-deal-revenues-could-soar-to-6-billion-in-2015/feed/ 0 http://allthingsd.com/20110302/no-ones-buying-nintendos-cautionary-tale-about-mobile-and-social/ http://allthingsd.com/20110302/no-ones-buying-nintendos-cautionary-tale-about-mobile-and-social/#comments Thu, 03 Mar 2011 06:06:58 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3237 Leaders in the gaming industry reacted negatively today to controversial comments made by Nintendo’s President Satoru Iwata at the Game Developers Conference this morning.

Iwata, who presented the show’s only keynote, said he fears today’s emphasis on mobile and social is going to hurt the industry.

Later in the afternoon, critics said his statements only prove his ignorance and point to the company’s own weaknesses.

“Long-term, Nintendo is doomed,” said Michael Pachter, equity research analyst of Wedbush Securities. “He’s under full frontal assault by Apple.”

In the keynote, Iwata explained the games industry is no longer focused on building the highest quality experiences, but rather is narrowing in on free or very low cost titles.

“The majority of people here are creating games for social and mobile. I fear our business is dividing, and that threatens the employment for those of us who make games for a living,” he said.

Iwata also addressed Apple’s impact on the industry, but without every naming the iPhone and iPad-maker.

The lack of acknowledgment felt particularly strange given that his comments were being made at the exact same time that Steve Jobs was across the street, unveiling the iPad 2, which has all the hardware capabilities in place to become a serious gaming device.

The closest Iwata got to talking about Apple, and probably Facebook too, was when he said that “these platforms have no motivation to maintain the high value of video game software. For them content is something created by someone else.”

For emphasis, he added: “The value of games does not matter to them…The fact is, what we produce is value, and we should protect it.”

[A video of Iwata's entire speech can be viewed on Nintendo's web site.]

Iwata gave the impression that he was oblivious to the burgeoning mobile and social sectors around him, which despite being in their infancy, are generating significant revenues and attracting large audiences. Together, they both have the ability to define the future of gaming.

“He may be right, but then the 200 to 300 million people who play games on Facebook are wrong,” said Jeff Brown, the VP of corporate communication for Electronic Arts  ”Social gaming as a whole aggregates into a business that is undeniably big money.

“When it’s that big you are forced to pay attention,” he added.

Among the large publishers, EA’s ahead of the game when it comes to preparing for the day when consumers switch from paying $60 for an Xbox title to paying a few bucks or nothing at all for an iPhone or Facebook game. Yesterday, it furthered its commitment by expanding its third-party publishing platform into social and mobile through its acquisitions of Chillingo and Playfish.

So far, it’s paying off.

EA’s digital business was up 39 percent in 2010 and its on track to hit three-quarters of a billion in revenues this year.

Zynga, the undeniable leader on Facebook, also took offense to the statements.

Zynga’s Chief Game Designer Brian Reynolds, who came from the traditional games business and was lead designer on the big hit Civilization II, was especially baffled by the comments about being able to make a living in social.

Last year, Zynga hired more than 800 people and today has more than 1,500 full-time employees in 13 offices, spanning six countries.

“I expected better from Nintendo. They are missing the point of what we are doing,” he said. “We are making games that everyone can play and socialize on while playing.”

What’s more, Zynga is doing a great job monetizing, he said.

Sources tell BoomTown’s Kara Swisher that it’s close to completing a funding round of $500 million, valuing the company at $10 billion –making it worth more than EA’s $6 billion market cap. In 2010, its revenues were rumored to total $850 million.

“We do it in a microtransaction way, and it’s free to play, but they’re wrong that they don’t make a lot of money,” Reynolds said.

The gaming industry has always been fraught by disruption.

In the past, the storyline has been about the consoles wars with Microsoft, Nintendo and Sony all going head-to-head to be the gaming leader. Now, it’s about the platform wars with consoles vs. mobile and social.

How quickly do things change.

It was only a year ago at GDC that Zynga seemed to piss off everyone when accepting an award on behalf of Farmville for best new social/online game.

In a similar manner as Nintendo today, Bill Mooney, the general manager for Farmville at the time, used his acceptance speech to make the argument for why everyone should leave console gaming for social games. He even solicited resumes at the podium.

Mooney’s overtness was translated as lack of respect for the traditional games business, which is what seemed to bother people the most.

What’s different with today’s platform wars vs. yesterday’s console wars is that this time, it’s not about one beating another. It’s about expanding the market opportunity for gaming. Ultimately, if you give people a choice of platforms to play on, more people will play.

Reynolds said while Zynga has made huge gains since last year, it still hasn’t been fully recognized for its work.

“What we’ve done has permeated everywhere, but we don’t have the recognition from the old guard. The young guys — they get it, but the forces of the industry are living in the past. The longer it takes them to realize that, the more it will cost them to buy your way back in.”

As for whether Nintendo is wrong or right, and whether it will have to pay heavily down the road to get back in, we’ll have to wait and see.

The rest of Iwata’s hour-long keynote was spent promoting its upcoming 3DS launch at the end of the month.

Today, Nintendo’s North American President Reggie Fils-Aime announced a partnership with Netflix to offer streaming video.

It also formed a partnership with AT&T to give internet access to the handheld gaming devices wherever it operates WiFi hotspots.

Webush’s Pachter said despite the pressure from Apple, he believes the 3DS is novel and has the ability to sell tens of millions of units, but it will face competition from the iPod and iPhone, which have similar games and much lower prices.

EA’s Brown also wouldn’t count them out. “The instant you stop thinking they are relevant, they turn the industry upside down.”

]]> http://allthingsd.com/20110302/no-ones-buying-nintendos-cautionary-tale-about-mobile-and-social/feed/ 10 http://allthingsd.com/20110228/fed-up-with-facebook-hi5-tells-social-game-developers-theres-an-alternative/ http://allthingsd.com/20110228/fed-up-with-facebook-hi5-tells-social-game-developers-theres-an-alternative/#comments Mon, 28 Feb 2011 20:07:12 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3140 The spotlight at the 2011 Game Developers Conference this week in San Francisco will be social networking, as Facebook has become an undeniable powerhouse in the industry–and a considerable force to reckon with.

As just one example of the scope of Facebook’s influence, the 18,000 attendees, who have hundreds of sessions and panels to pick from over five days, will be subjected to listening to 12 employees of Zynga, the Facebook superstar, on 15 different panels. (Brian Reynolds, Zynga’s chief game designer, appears three times, while a search reveals no Facebook employees on the roster.).

Two other elements will serve as a backdrop to the event.

Apple will hold its much-anticipated event on Wednesday, where it’s likely to unveil a new version of its hugely successful iPad, according to BoomTown’s Kara Swisher. The tech giant undoubtedly is becoming one of the dominant portable gaming giants, as the iPad and iPhone easily replace the need for dedicated gaming devices.

No need for Apple to attend GDC, however, when the unveiling will occur across the street at the Yerba Buena Center for the Arts. So subtle.

Meanwhile, the GDC is commemorating its own 25th gaming conference by featuring a keynote by Nintendo.

But can you believe the company, which doesn’t have a new gaming console even on the horizon, is the one talking about the past 25 years and not what the future has in store?

Other companies with a significant presence include Sony, which will be showing off the new Experia Play phone and its motion-activated Move technology, Electronic Arts and independent mobile-game makers like Rovio, of Angry Birds fame.

However, with social being one of the main ingredients on the menu, we caught up with Alex St. John, a long-time executive in the industry, who has spent the past year and a half coming up with an alternative– he calls it the “anti-social networking platform.”

St. John is the president and chief technology officer of Hi5, which was founded in 2003 as a competitor to Facebook’s social network. With all hope lost on that front, it’s now going up against the company a second time–this time for its games business.

The move is 100 percent anti-Facebook, and there’s nothing subtle about it.

Over the past year and a half, St. John has been building an alternative for social-game developers who fear they may be relying too much on Facebook.

Today, Facebook claims 30 percent of most revenues made within a game by mandating the use of its own virtual currency, called Facebook Credits. Developers often hand over even more money to the social network in order to advertise and draw an audience to their games.

St. John’s ambitions are unnaturally large, and supercharged by the fact that he was able to skyrocket his last company, WildTangent, into the largest casual games network (above Yahoo), where it continues to stand today. (Read our story on WildTangent for background.)

Even more boldly, he’s promising to double or triple the amount of revenues a developer can make when using Hi5 compared versus Facebook.

Here’s the logic:

“If I have the same content, and have better monetization, even if my audience is tiny, I will eventually win because I can buy traffic cheaper than you.”

If you buy that, listen to his two-part plan.

First, there’s SocioPath.

SocioPath (the anti-social network) will enable game developers to provide a home for their games outside of the walls of Facebook.

By using it, they can create a unique URL for the game, and users won’t have to register. To do this, Hi5 clones Facebook’s APIs, and enables users to create profiles on the fly, so they can play with other people immediately. The caveat is that if the gamers want to chat or communicate with others, they’ll have to log in and register.

Otherwise, the auto-registration process creates little to no friction for playing.

Second, there’s SocioPay.

SocioPay offers game-makers a way to monetize. It uses a hybrid of advertising and commerce, a practice St. John mastered at WildTangent (for the record, St. John no longer has any role at WildTangent and doesn’t own any stock).

This model allows developers to continue to sell virtual goods to the three percent of users who are traditionally willing to pay in games, but still monetize the other 97 percent using advertising.

When a user clicks on a virtual good, Hi5 will automatically serve a 15-second video clip. If a user would rather pay, they can skip the ad and enter their payment information.

St. John claims you end up losing about 25 percent of sales because of the ads, but you gain way more in revenue through advertising. Over time, they’ll tweak the ad server, so it knows not to offer an ad if a person has already paid for coins or is likely to. His calculations point to a 200 percent–maybe 300 percent–jump in revenue.

Of course, this isn’t free.

Hi5 will charge developers who want to use SocioPay 30 percent of both commerce and advertising revenues. If the ad server is used anywhere else, like on an individual Web site, the developer can keep 100 percent of the revenues. St. John claims the terms are less onerous than those of Facebook, which takes 30 percent of virtual goods and charges additionally for advertising on the site.

When SocioPath launched in August, it had three social games. It is now live with 116, and launching two to five a week.

This week, for instance, SocioPay launches with five partners–Portalarium: Port Casino Poker; DJArts Games: Bush Whacker; Mososh: Chronicles of Herenvale; Game Insight: Resort World;, and Hit Point Studios: Gunbros.

St. John expects the program to go live in a month after the beta is completed.

Here’s a video of St. John, discussing the the trends of GDC, his decision to join Hi5, and his ambitions for the new game venture (to be a very successful No. 2 behind Facebook).

]]> http://allthingsd.com/20110228/fed-up-with-facebook-hi5-tells-social-game-developers-theres-an-alternative/feed/ 1 http://allthingsd.com/20110216/analyst-cheaper-iphone-would-be-a-bonanza-for-apple/ http://allthingsd.com/20110216/analyst-cheaper-iphone-would-be-a-bonanza-for-apple/#comments Wed, 16 Feb 2011 22:47:49 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57961 For Apple, a smaller, cheaper iPhone may be more than a means of entering the market for lower-end phones currently dominated by Android and Symbian–it could be the final step in the company’s global smartphone dominance.

That’s the theory put forth today by Bernstein analyst Toni Sacconaghi, who believes Apple’s market-share aspirations for the iPhone are a lot like those for its iPod business. Sacconaghi sees an iPhone Nano or Mini as an inevitability, one that would dramatically expand Apple’s addressable market.

“We are surprised that Apple hasn’t moved sooner to introduce a lower priced offering that could help secure a more dominant installed base,” Sacconaghi said in a note to clients today. “After all, the smartphone world is a platform war, where first mover advantage and scale matters. The dual facts that (1) iPhone has not been available at several very important global carriers and that (2) it carries a very high price point have contributed to creating an opportunity for Android that has been successfully exploited. Particularly with Android now outselling iOS, the imperative for Apple to expand its installed base has never been higher.”

A scaled-down version of the iPhone with a cheaper data plan–or one that required no data plan at all–is one very obvious way of doing that. Roll out a device like that with a street price that falls somewhere between $149 and $199, says Sacconaghi, bring it those carriers that don’t yet offer the iPhone, and mass-market adoption will follow. Serious mass-market adoption.

“It is difficult to estimate the size of a market for a product that we don’t yet know the form-factor or timing for. But as a rough guide, we estimate that at an end-user price of $150-$200 and no data plan contract, Apple could address potentially all of the remaining smartphone segment, the non-smartphone postpaid segment, and about 15 percent of the non-smartphone prepaid segment. This would amount to an incremental 700M+ units and $90 billion in revenue in terms of market opportunity; even if Apple succeeded in capturing just 5 percent of these incremental units, it would add $12+ billion in revenues and $4.50+ in EPS.”

]]> http://allthingsd.com/20110216/analyst-cheaper-iphone-would-be-a-bonanza-for-apple/feed/ 10 http://allthingsd.com/20110214/zynga-revenues-soar-to-850-million-in-2010/ http://allthingsd.com/20110214/zynga-revenues-soar-to-850-million-in-2010/#comments Mon, 14 Feb 2011 20:59:32 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2816 Zynga, which develops popular games on Facebook, like CityVille and Mafia Wars, is considering raising up to $250 million in new funding, the WSJ reports. That transaction could value the three-year-old start-up at between $7 billion and $9 billion, according to people familiar with the matter. But sources also say its financials are sound, with Zynga earning $400 million in profit on $850 million in revenues last year.

]]> http://allthingsd.com/20110214/zynga-revenues-soar-to-850-million-in-2010/feed/ 1 http://allthingsd.com/20110214/ifund-companies-turning-down-buyout-offers-as-mobile-heats-up/ http://allthingsd.com/20110214/ifund-companies-turning-down-buyout-offers-as-mobile-heats-up/#comments Mon, 14 Feb 2011 18:43:45 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2799 The iFund, founded by Kleiner Perkins two years ago for the purpose of investing in applications and services for Apple’s iPhone, has only seen one exit.

But not for lack of offers.

In an interview with iFund manager Matt Murphy, he said several of the fund’s 18 companies have received verbal offers during a recent six-week stretch.

And, even more impressive, all of the companies have turned them down.

“I feel like everyone is realizing how massive mobile is, and some Internet companies are thinking that they should snap these up while they can still be leaders,” Murphy said.

The interest in mobile companies is fairly predictable.

Big public companies, like Google, Microsoft and Amazon, have deep pockets capable of buying companies to fill out a particular niche. Likewise, private companies with public-like valuations, like Facebook, Zynga and Groupon, also have plenty of cash and incentive to grow.

But what’s more unusual is the preference by the entrepreneurs to go big and stay independent.

Indeed, the darker moments of the recession appear to be behind us.

IFund companies include Booyah, Pelago and Flipboard. Cooliris, which lets you view photo and video, announced it has raised $9.6 million in funding today. Shazam is another iFund investment, and it could be headed for an IPO in the next year or so.

One of the more public deals was Kleiner Perkins-backed Path, which turned down a $100 million offer from Google and decided to raise nearly $10 million in venture capital to remain an independent mobile social network.

We also hear that Los Angeles-based GOGII, an iFund company, turned down an offer from Zynga, which is averaging about an acquisition every month. Instead, it plans to raise more money and evolve its group-texting platform.

GOGII’s Scott Lahman declined to discuss any negotiations, or whether the offer happened at all, but said he thinks people are waking up to the fact that everything is mobile, and “new platforms introduce new winners.”

The one iFund company that did sell was Ngmoco, which was bought late last year by DeNA for $400 million.

Heck, maybe even think that was a mistake now (although its CEO Neil Young would disagree).

Murphy said the offers the companies are receiving are not low, and are not just from companies seeking mobile talent–the valuations are too high for that, and the teams they are after are too big.

So why is everyone saying no?

“For entrepreneurs, the decision is, ‘what do I want to do for the next few years?’ For passionate entrepreneurs, it’s too early to give up on the dream. If it’s wildly successful, the achievement of going through it all is never replaceable.”

Murphy also says the business is encouraging right now because of the growth rates companies are seeing.

It took Ngmoco more than a year to hit its first $1 million month in revenues. But now Murphy can name multiple game companies that have hit $1 million a month in less than half that time. “If you are the founder, and you are growing revenues 100 to 150 percent year-over-year, why sell today?”

The growth is expedited by the fact that more people are buying smartphones, and the mechanisms are in place to make money.

Almost a year after the iFund was started, Apple enabled in-app commerce, allowing people to buy virtual goods and other items within a game or application. Once it did, it took only a couple of months for companies’ revenues to increase five-fold, he said.

Now the iPhone has come to Verizon Wireless, which expands the market, and Google is coming out with in-app purchasing for Android soon.

Does Murphy mind that these company’s aren’t selling?

No, he said. If they choose to sell, “we may be disappointed.” What gets him excited is when an entrepreneur says, “Hell no.”

]]> http://allthingsd.com/20110214/ifund-companies-turning-down-buyout-offers-as-mobile-heats-up/feed/ 0 http://allthingsd.com/20110212/pandoras-music-fees-are-huge-and-not-that-bad/ http://allthingsd.com/20110212/pandoras-music-fees-are-huge-and-not-that-bad/#comments Sat, 12 Feb 2011 12:00:51 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=29694 After Pandora filed to go public Friday, some people were taken aback to learn the company was spending half of its revenues on “content acquisition”–the royalties it pays the owners of all the music the service streams.

They shouldn’t be.

Pandora has always been up front about the fact that royalties are its biggest expense. And that those fees increase in lockstep with the music service’s popularity.

But while spending half of every dollar it brings in on royalties is a burden, it could be worse. A lot worse.

Prior to the summer of 2009, when Pandora and other Web services negotiated a new royalty deal, Pandora’s music bill was more than 100 percent of its revenues.

Check out this table from Pandora’s S-1, which breaks out each line item in its P&L as a percent of revenue. Notice how brutal the first two quarters of 2009 were. And see how much more tolerable (or at least less awful) they became after July 2009, when Pandora got its new rates (click image to enlarge):

See? Now 50 percent doesn’t look that bad.

And while Pandora’s music fees are hefty, the system that generates those bills is really one of the company’s strengths.

That’s because unlike other music services, from Apple’s iTunes to Spotify, Pandora doesn’t have to negotiate with individual labels and publishers to use their stuff.

Instead, it takes advantage of a U.S. law that created a “compulsory license” for Internet radio. That allows anyone to stream any recorded music they want, as long as they’re willing to pay for it. And as long as they’re functioning as a “Webcaster” and not an on-demand “interactive service.”

The advantages of using the compulsory license are huge. It means Pandora never had to ask the big labels for permission to use their stuff, or pay out giant advances or equity stakes to get a deal done.

While the licenses do come with restrictions–that’s why Pandora doesn’t let listeners request individual songs, and limits the number of times users can skip a song per hour, etc.- they haven’t dissuaded some 80 million people from using the service.

Those licenses don’t exist outside of the U.S., which is one reason Web radio services are such a rarity everywhere else, and why Pandora may struggle with international expansion.

And the fees that Pandora does pay will escalate each year until 2015, when it has to negotiate a new royalty agreement with the music industry.

It’s always possible that the rates will get significantly worse for Webcasters then, and that Pandora ends up in the shape it was in prior to the summer of 2009.

But for the next four years, at least, Pandora thinks it can work with the music bills its users are generating. Now we’ll see if investors agree.

]]> http://allthingsd.com/20110212/pandoras-music-fees-are-huge-and-not-that-bad/feed/ 9 http://allthingsd.com/20110211/pandora-files-to-raise-100-million-in-ipo/ http://allthingsd.com/20110211/pandora-files-to-raise-100-million-in-ipo/#comments Fri, 11 Feb 2011 22:49:49 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2739 Let the floodgates open.

First it was LinkedIn, and now it is music-streaming service Pandora that has filed for an initial public offering.

In a document filed with the SEC today, the Oakland, Calif.-based company said it wants to raise $100 million. The underwriters are Morgan Stanley, J.P. Morgan, Stifel Nicolaus Weisel and William Blair & Company.

Pandora explained in the document that its service today is primarily a personalized radio station streamed over the Web and mobile phones, but in the future it has aspirations to do much more.

It wants to improve the service, develop new advertising products, build out its ad sales force, expand distribution to other consumer electronics and automobiles, and expand internationally. It also wants to add other types of content beyond music, such as radio formats, like talk radio or sports.

The company reported a loss of $328,000 on total revenues of $90.1 million in the nine months ended October 31, 2010. In the same period in 2009, it lost $18.6 million on revenues of $31.4 million.

A majority of its revenues comes from advertising, with a very small minority from subscriptions.

Pandora uses what it calls the Music Genome Project to draw correlations between different songs, so that when a user picks a particular station–based on an artist or a song–it finds the best matches to fit your taste, making the service insanely addictive.

The company’s tagline: “It’s a new kind of radio–stations that play only music you like.”

Generally, the advertising interruptions are limited, and subscriptions are available.

It hasn’t always been smooth sailing for the company, and has had to fight hard to keep down the royalty costs it must pay license holders. An IPO won’t put an end to those troubles, but it signals the company may be out of the woods.

The service has plenty of rivals, including companies like Rhapsody, and could be threatened by international competition from services like Spotify, which is still months out from entering the U.S.

In the filing, Pandora says the largest shareholders are Crosslink Capital, Walden Venture Capital, Greylock Partners, Labrador Ventures, the Hearst Corporation and GGV Capital.

Some other tidbits from the filing:

–80 million registered users in the U.S.

–800,000 songs from 80,000 artists in the collection.

–Streamed 3.9 billion hours in the fiscal year ended January 2011.

]]> http://allthingsd.com/20110211/pandora-files-to-raise-100-million-in-ipo/feed/ 0 http://allthingsd.com/20110210/stock-trades-near-52-week-high-on-message-that-its-an-all-new-ebay/ http://allthingsd.com/20110210/stock-trades-near-52-week-high-on-message-that-its-an-all-new-ebay/#comments Thu, 10 Feb 2011 21:28:40 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2633 Two years ago, eBay’s CEO John Donahoe promised Wall Street analysts massive changes to improve the company’s e-commerce experience.

Today, he says it’s all “new eBay.”

At the company’s analyst meeting at its headquarters, the company demonstrated the major changes made over the past couple of years and laid out plans for how local, mobile and social will lead the next wave of commerce.

In the afternoon, Bob Swan, eBay’s CFO, took the stage to give the financial rundown that everyone had been waiting for since the morning.

Swan highlighted PayPal’s growth trajectory by saying that it expects to double revenues over the next three years to between $6 billion and $7 billion, compared with $3.4 billion in 2010.

He also talked up how mobile was gaining speed by saying that PayPal mobile transactions were estimated to double to $2 billion in total payment volume, and that mobile on marketplaces will double to $4 billion in gross merchandise volume.

Meanwhile, when looking at the company’s gross merchandise volume, he sees the business increasing from $60 billion in 2010 to $75 billion in 2013. And, to support the strength of the business, the company anticipates generating $7.5 to $8 billion in free cash flow by 2013.

Swan wants to stress that these growth rates are being driven from the company’s core businesses, and not from the more innovative stuff eBay is working on in local, mobile and social. “We are in a  different state than we were in March 2009, where the crystal ball was murky and full of potholes. Now the crystal ball is full of opportunities. We have unmatched advantages that position us to win.”

That’s possible because of the improvements the company has been making over the past two years.

“We’ve made significant and necessary changes necessary for growth. Two years ago, search was optimized for auctions and suffered. Two years from now, search will be a competitive advantage for eBay,” said Mark Carges,” eBay’s CTO of marketplaces. “We’ve rolled out many tailored experiences and selling on eBay will be vastly simplified.”

To illustrate the change, Carges showed how there’s no more irreverent banner ads on the search results page, and instead of returning up to 19 paid results, it gives shoppers the “best matches” and cuts the time in half that it takes to return results.

The company also launched the buyer protection program, which will return the price of the item and the cost of shipping to customers unhappy with purchases.

Christopher Payne, VP of eBay marketplaces North America, said the company will start to increase marketing spend on these improvements to drive awareness: “We’ve been intentionally quiet as we fixed fundamentals, but starting in the second half, we’ll start marketing this new experience.”

At lunch, analysts were so eager to talk to Donahoe he wasn’t even able to get to his seat. They crowded around him in the lobby to grill him on what impact Facebook, Apple and Google were going to have on the company’s payments aspirations.

Donahoe wasn’t phased, saying that PayPal is technology agnostic. He will support BlackBerry, Google’s Android, Apple’s iPhone — and all of the iterations they produce from phones to tablets. What’s more, he says, the company is building the tools and technology for merchants to keep up in what can be a daunting world.

Analysts appear impressed with the improvements. Today, the company’s shares traded up nearly 8 percent, or $2.57, to $34.53, coming close to marking a 52-week high.

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