Why a top Facebook app maker vanished

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Facebook said Wednesday it has deleted all applications created by Pencake, wiping out widgets used by an estimated 45 million Facebook members.

Pencake, based in Hong Kong, developed the massively popular "Create Your Quiz" app. Unofficial data tracker AppData lists Pencake as Facebook's No. 3 most popular outside developer, trailing only Zynga and Electronic Arts.

But Facebook says Pencake built its vast user base by going rogue.

"We recently disabled applications created by Pencake for violating Facebook Platform policies," Facebook said in a prepared statement. "We enforce these policies regularly and will continue to take appropriate action against applications we find do not provide a trustworthy experience for users."

A Facebook rep declined to specify which policies Pencake violated, but she cited the "main principles" of the site's code of ethics, which discourage Facebook users from spamming or infringing on members' privacy.

Pencake has been known to push the boundaries on Facebook. Members and other developers have complained that the company's apps used spammy tactics like automatically publishing stories to users' pages.

Some Chinese developers even claimed that Pencake admitted in a Hong Kong paper to spamming users at one point, though the company also reportedly said that it was working to scale back those methods.

It would hardly be the first to build Facebook traffic in unsavory ways.

The most notorious scofflaw is Zynga, whose games include FarmVille, FishVille and Mafia Wars. The developer once piled users' Facebook pages with a constant barrage of game notifications, which helped it lure in more players.

Facebook eventually tightened the reins on third-party notifications, but Zynga had already grown powerful. It claims to have 235 million active users a month -- almost half of Facebook's total 500 million users.

Zynga reportedly sucks in revenue of $1 million a day daily, mostly from users paying real money for virtual goods like tractors and animals for their online farms.

Social gaming is fast becoming an M&A battleground, with Zynga one of the few remaining independent developers with a sizeable user base. Electronic Arts (ERTS, Fortune 500) jump-started its presence by snapping up Playfish in November for $275 million in cash plus other incentives, and Disney acquired Playdom this week in a deal it valued at up to $763 million.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,133.60 36.70 0.20%
Nasdaq 4,982.00 14.86 0.30%
S&P 500 2,101.20 2.67 0.13%
Treasuries 2.13 0.00 0.14%
Data as of 2:05pm ET
Company Price Change % Change
Apple Inc 126.36 -2.18 -1.70%
Bank of America Corp... 15.97 0.13 0.82%
AbbVie Inc 57.16 -3.11 -5.15%
Facebook Inc 81.29 0.40 0.49%
Avon Products Inc 8.96 -0.13 -1.48%
Data as of 1:50pm ET
Sponsors

Sections

The warehouse retail giant is on fire. Costco is a big hit with consumers and investors. More

Wage growth has become the central focus of the economy's health. It will impact workers and investors. More

Pre-IPO investors are interested in striking a funding deal with Warby Parker, which would value the affordable eyewear firm at as much as $1.2 billion. More

Frank & Oak, Airbnb, and Net-a-Porter are just a couple of companies investing in the antiquated medium. More

Lawmakers and consumer advocates are speaking out against the special treatment given to debt collectors hired by government agencies across the country. More