How Silicon Valley Rationalizes Its Scammy Profit Center

It's hard to say what's more pathetic: That the social networks at the center of Silicon Valley's growth derive so much money from online scams, or the way one venture capitalist excuses the whole sad scene.

Mike Arrington at TechCrunch ran a series of articles revealing how much of Facebook's revenue comes from shady affiliates of online gaming companies like Zynga affiliates that often trick users into signing up for unwanted subscriptions, CDs and other goods. Arrington even found a video of Zynga CEO Mark Pincus saying, "I did every horrible thing in the book just to get revenues."

Now Zynga investor Fred Wilson — who has also backed the likes of Twitter — has stepped forward to explain it was all a misunderstanding: Pincus meant to say he only did one horrible thing, this one time:

That was a very short excerpt of a longer conversation mark was having about how entrepreneurs need to focus on revenue early on ... he said something to the effect "hell we even tried a toolbar. i couldn't figure out how to get it off my computer. i told my guys to take that offer down immediately". of course the person who uploaded the video had no interest in showing it in context.

See? The press is always taking statements lile "I did every horrible thing in the book" way out of context. No scandal to see here, move along.

(Pic: Wilson, by Joi Ito)