I feel bad seeing such a great talent pool going away... but this is one company.. for which I never had any sympathy.. Honestly.. I couldn't understand their games.. neither their business model.. In my view it was at the best a fad.. which is either reached maturity level or just simply going away. Their business model was to make money by selling virtual goodies in games.. how lame anyone could go.. that is simply beyond my comprehension.. Why on earth any sensible person will spend money on these virtual goodies.. I can not empathize neither with their players nor with the company which created these super moronic games..
Then, finally, company is making biggest blunder by firing employees.. at this time of crunch.. if they want to save their company they should be hiring more and come up with innovative games which can bring back life to the company.. I would prefer to take a shot at revival rather than committing a definitive but slow suicide by firing my talent pool.. But all this non-sense is due to fact that management has to report numbers to wall street and they have to show SOME actions to prove that they are still in control and have plan to revive company.. But does it matter at this stage.. Wall Street should be last thing which they should be worried about. They should worry about innovation and their customer.. Customer is king and god for you.. you do whatever you can to please your king and / or god..
It’s no game: Zynga is falling fast
Revenue is decent, but company losing fans, firing workers
By David Streitfeld
New York Times
SAN FRANCISCO — Zynga is putting all its chips on a game called survival.
The company, which practically invented the notion of using Facebook as a games platform, is firing employees, shutting games and losing fans. Its reversal of fortune since going public less than a year ago has been steep, raising the specter of Internet companies like Pets.com and theglobe. com that dazzled investors briefly a dozen years ago.
That earlier crackup was part of a broad-based downturn that took everything tech along with it. This time around, the bubble is bursting selectively, one promising but overvalued outfit at a time. Groupon, Netflix and, most visibly, Facebook have all been hammered in recent months as investors began to realign their rosy expectations with cruel reality.
Zynga is by far the most embattled of this select group. Even as its partner Facebook staged a tentative revival Wednesday — its shares rising 19 percent on the heels of better-thanexpected third-quarter numbers — Zynga’s own earnings report, released after the market closed, was grim.
The good news: It was not the apocalypse some investors were apparently anticipating.
Revenue was $317 million, an improvement over the $300 million to $305 million the company had forecast in early October when it warned that tough times were ahead. Revenue was significantly higher than the $256 million that cautious analysts had expected.
But revenue was up only 3 percent over the third quarter of 2011. That is not the sort of success story Wall Street had been looking for.
Zynga makes most of its money by selling virtual goods to committed players. These bookings, at $256 million in the third quarter, were in line with the company’s lowered expectations. In the third quarter of 2011, bookings were $288 million. Wall Street, which had expected outright disaster, reacted positively to the news. Zynga shares fell slightly in regular trading Wednesday to $2.12 but spiked 12 percent in afterhours trading. Zynga went public in December at $10.
Zynga began this week to implement some measures designed to salvage its chances. It is dismissing about 5 percent of its 3,000 employees and turning off 13 older games that never had much popularity. But that is unlikely to be enough, said Arvind Bhatia, an analyst at Sterne Agee.
“The Zynga model was flaky to begin with,” Bhatia said.
He noted that it was heavily dependent on Facebook, on a few hit games like FarmVille and CityVille, and on just a few players who were willing to buy virtual goods to speed their play.
“If they could find a hit, maybe things could turn around,” he said. “But the recent track record doesn’t give you a lot of confidence.”
STEPHEN LAM REUTERS
General Manager Manuel Bronstein speaks during the Zynga Unleashed event in San Francisco in June.
Then, finally, company is making biggest blunder by firing employees.. at this time of crunch.. if they want to save their company they should be hiring more and come up with innovative games which can bring back life to the company.. I would prefer to take a shot at revival rather than committing a definitive but slow suicide by firing my talent pool.. But all this non-sense is due to fact that management has to report numbers to wall street and they have to show SOME actions to prove that they are still in control and have plan to revive company.. But does it matter at this stage.. Wall Street should be last thing which they should be worried about. They should worry about innovation and their customer.. Customer is king and god for you.. you do whatever you can to please your king and / or god..
It’s no game: Zynga is falling fast
Revenue is decent, but company losing fans, firing workers
By David Streitfeld
New York Times
SAN FRANCISCO — Zynga is putting all its chips on a game called survival.
The company, which practically invented the notion of using Facebook as a games platform, is firing employees, shutting games and losing fans. Its reversal of fortune since going public less than a year ago has been steep, raising the specter of Internet companies like Pets.com and theglobe. com that dazzled investors briefly a dozen years ago.
That earlier crackup was part of a broad-based downturn that took everything tech along with it. This time around, the bubble is bursting selectively, one promising but overvalued outfit at a time. Groupon, Netflix and, most visibly, Facebook have all been hammered in recent months as investors began to realign their rosy expectations with cruel reality.
Zynga is by far the most embattled of this select group. Even as its partner Facebook staged a tentative revival Wednesday — its shares rising 19 percent on the heels of better-thanexpected third-quarter numbers — Zynga’s own earnings report, released after the market closed, was grim.
The good news: It was not the apocalypse some investors were apparently anticipating.
Revenue was $317 million, an improvement over the $300 million to $305 million the company had forecast in early October when it warned that tough times were ahead. Revenue was significantly higher than the $256 million that cautious analysts had expected.
But revenue was up only 3 percent over the third quarter of 2011. That is not the sort of success story Wall Street had been looking for.
Zynga makes most of its money by selling virtual goods to committed players. These bookings, at $256 million in the third quarter, were in line with the company’s lowered expectations. In the third quarter of 2011, bookings were $288 million. Wall Street, which had expected outright disaster, reacted positively to the news. Zynga shares fell slightly in regular trading Wednesday to $2.12 but spiked 12 percent in afterhours trading. Zynga went public in December at $10.
Zynga began this week to implement some measures designed to salvage its chances. It is dismissing about 5 percent of its 3,000 employees and turning off 13 older games that never had much popularity. But that is unlikely to be enough, said Arvind Bhatia, an analyst at Sterne Agee.
“The Zynga model was flaky to begin with,” Bhatia said.
He noted that it was heavily dependent on Facebook, on a few hit games like FarmVille and CityVille, and on just a few players who were willing to buy virtual goods to speed their play.
“If they could find a hit, maybe things could turn around,” he said. “But the recent track record doesn’t give you a lot of confidence.”
STEPHEN LAM REUTERS
General Manager Manuel Bronstein speaks during the Zynga Unleashed event in San Francisco in June.
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