Most of us in marketing have been following the rise and fall of Zynga with great interest. More interesting was the sudden closure of OMGPOP which it had acquired for a cool $200 Million. No Small sum !!!
Now the question which arises in any layman's mind is this:
Why .....
Ans: Zynga was not able to operate / utilize OMGpop to its full potential and hence was running into losses to the tune of $528,000 per day (conservative estimates)...
Many of the reasons that the peers in the industry are quoting are whether Zynga over estimated OMGPOP..as Late in 2012, Zynga took a write-down of $85 million to $95 million on the value of OMGPOP—nearly half of what Zynga paid for it. Some might say the OMGPOP for a small mobile game maker profited from the deal at that time. But now insiders say as does market estimates that Zynga OVERPAID for the smaller gaming company.
Those in the industry understand that if company A has a large kitty and also a percentage of the market then it will wither try to push company B out of its turf or Acquire it. Case in point Zynga.... but its management have failed to utilize that which they acquired which in itself had 20 million registered users and more than 35 million downloads.
Over the period of time a lot of articles were written on how the Zynga management were pressuring its developers and programmers to perform harder dangling the Equity carrot... which also bombed on its first day of trading..down 5 % from its $10 IPO price.
Companies wanting to cut down its expenditure when in losses in understandable.. But not even informing the
top management of its $200 million
acquisition when it was being shutdown...Imagine the turmoil in its HQ.
No one cares that Zynga's flash in the pan 'OMGPOP' hasn't worked. we understand that there are up's
and lows in taking care of a company ...its a given.. But it’s this type of lackadaisical attitude from a growing company which gives everyone associated the jitters... and I hope many other companies will understand that
you can't create a business model by going public.
You cannot simply acquire a company and not utilize the potential of the acquisition.
Employees are not mindless cattle.. If you wanna fire them be ethical about it. Don't let them know about it from others.
Now the question which arises in any layman's mind is this:
Why .....
Ans: Zynga was not able to operate / utilize OMGpop to its full potential and hence was running into losses to the tune of $528,000 per day (conservative estimates)...
Many of the reasons that the peers in the industry are quoting are whether Zynga over estimated OMGPOP..as Late in 2012, Zynga took a write-down of $85 million to $95 million on the value of OMGPOP—nearly half of what Zynga paid for it. Some might say the OMGPOP for a small mobile game maker profited from the deal at that time. But now insiders say as does market estimates that Zynga OVERPAID for the smaller gaming company.
Those in the industry understand that if company A has a large kitty and also a percentage of the market then it will wither try to push company B out of its turf or Acquire it. Case in point Zynga.... but its management have failed to utilize that which they acquired which in itself had 20 million registered users and more than 35 million downloads.
Over the period of time a lot of articles were written on how the Zynga management were pressuring its developers and programmers to perform harder dangling the Equity carrot... which also bombed on its first day of trading..down 5 % from its $10 IPO price.
Companies wanting to cut down its expenditure when in losses in understandable.. But not even informing the
top management of its $200 million
acquisition when it was being shutdown...Imagine the turmoil in its HQ.No one cares that Zynga's flash in the pan 'OMGPOP' hasn't worked. we understand that there are up's
and lows in taking care of a company ...its a given.. But it’s this type of lackadaisical attitude from a growing company which gives everyone associated the jitters... and I hope many other companies will understand that
you can't create a business model by going public.
You cannot simply acquire a company and not utilize the potential of the acquisition.
Employees are not mindless cattle.. If you wanna fire them be ethical about it. Don't let them know about it from others.
