Zynga's demise.. sad but nothing unexpected

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.

Is it time to let go AMD..

10+ Years later! This is the example of applying sound management and innovation principles. AMD, can be seen as one of the biggest comeback in the history of tech companies!

Couple of years back it was more or less requirement to keep AMD alive. Otherwise we would have ended up with monopoly, I mean absolute monopoly of Intel. Any how it was Intel's monopoly..

Times have changed.. Intel itself is struggling to change and reformat themselves for new mobile device market. PC market is shrinking. It is still huge market but shrinking market and loosing it's old charm to ARM based or other mobile chips. Lot of new players in that market and there is full blown war out there in that segment. Good news is that, mobile/tablet market is still in its infancy stage and there is ample of growth opportunities and hopefully it will continue to remain fragmented market.

Unlike PC/Server chips market which become monopolistic right from the beginning and then it was literally choked by one big monster called Intel.. No offense to Intel.. I am writing this blog leveraging their chip only.. However, monopolies are never good for anyone in long term.. not even for the company who has monopoly on it.. as it is sure shot signature on its own death certificate. If you want to be thrive for longer time, you have to be competitive and always on your toes and ready take up new challenges..

However, times have changed and time themselves have signed death certificate of Intel.. It will be slow death unless, Intel takes up big gamble and transforms themselves completely by calling themselves company who primarily makes brains for mobile/tablets. But it is so difficult to let go their own cash cow. Best thing they can do at this time is to acquire one leading mobile/tablet chip maker and don't even think about integrating.. When time is right, they can merge themselves into its umbrella as PC/Server chip maker.. Knowing big companies.. I know for sure that they can't do such transforms themselves.. Last such transformation happened when Intel was really small company and was nimble and agile.. not any more.. They have to go external route now..

Coming back to AMD.. they can be easily shut down.. nobody will even notice them..

SLOWING DEMAND FOR CHIPS

AMD will slash its workforce

Sunnyvale firm blames tough PCmarket, will cut jobs by 15 percent

By Steve Johnson

sjohnson@mercurynews.com 

Blaming the tough market for personal computers, troubled Sunnyvale chipmaker Advanced Micro Devices Thursday said it will trim its workforce by about 15 percent to reduce expenses and announced third-quarter earnings that missed Wall Street’s expectations.

The company didn’t specify the number of job cuts, which will be mostly done by the end of the year. But the layoffs presumably would affect about 1,665 positions based on the 11,100 employees it said it had in its most recent annual report. The company said it does not yet know how many of the trims will be in the Bay Area, where it has 925 employees.

“We faced a very challenging selling environment,” CEO Rory Read told analysts in a conference call. Although the company is trying to get its chips into other new markets, the slowdown in PC sales caught AMD by surprise. “We underestimated the speed of this change in our industry and expected to have several years to transform AMD’s business. But we must implement our transformation on a more aggressive timeline.”

But the announcement left some analysts skeptical.

“I’ve got to say I don’t like this,” Bernstein Research analyst Stacy Rasgon said. “They have to cut 15 percent. I think it’s going to be disruptive,” especially as AMD attempts to compete in new markets against other chip suppliers. 

The layoffs come on top of 1,400 job cuts the company announced in November. AMD also laid off 2,300 workers in September 2001. For the quarter, AMD said its sales totaled $1.27 billion, a 25 percent drop from the same period ago. It also reported a loss of $157 million, or 21 cents a share. Analysts surveyed by Thomson Reuters on average had expected a loss of 16 cents a share on sales of $1.28 billion. The company’s shares fell 15 cents, or more than 5 percent, to $2.62 at the market’s close and before the layoff announcement. It stayed at that price in after-hours trading. In recent quarters, AMD’s sales have steadily shrunk and it has dipped into the red on several occasions. But its problems have been brewing for years. Founded in 1969, it soon ran afoul of chipmaker Intel. They feuded over patents and other matters in the early 1980s, when both companies began supplying IBM’s personal computers with brainy x86 microprocessors. The bickering continued and in 2005, AMD filed an antitrust suit against Intel, accusing it of unfairly discouraging computer makers from using AMD’s chips. Similar allegations were leveled against Intel over the next few years by Japan, South Korea, New York state, the U.S. Federal Trade Commission and Europe, with the latter fining the company $1.45 billion. Intel denied wrongdoing and is appealing the European penalty. But in 2009, it agreed to give AMD $1.25 billion to resolve its complaints, and it later settled the suits by the FTC and New York. 

After that, AMD executives had hoped to grab a bigger piece of the PC microprocessor business. Instead, AMD, which had owned 23 percent of the market in 2006, saw its share slide to about 19 percent while Intel’s share rose from 75 percent to about 80 percent. 

Although AMD was often praised for its chip quality, its earnings in recent years disappointed investors and it was criticized for not branching out from the personal computer market. AMD’s failure to get its chips into smartphones and tablets reportedly was behind a decision in 2011 to oust CEO Dirk Meyer and replace him later that year with Rory Read, former CEO of PC and tablet maker Lenovo. 

After his new company suffered manufacturing glitches and announced a round of layoffs last year, Read had hoped to revive AMD’s fortunes by developing more power-efficient, low-cost processors for mobile devices and finding more customers for its graphics chips. He also announced plans to begin complementing its traditional x86 chip design with another design predominately used in smartphones and tablets from British firm ARM. 

But AMD’s difficulties continued and its stock price has been in a nose dive since April. 

Reed said he hopes to sell more of its chips for communications, industrial and gaming uses, boosting the share of revenue it gets from those markets from five percent today to 20 percent a year from now. 

But tech analyst Patrick Moorhead said it often takes three years to develop chips for those markets and he said he wished AMD had disclosed more about how it intends to do that. 

“It’s the lack of details that I think is challenging to really understand what AMD is going to be doing,” he said. 

Ambrish Srivastava, an analyst with BMO Capital Markets, was similarly unclear how AMD would be able to turn its fortunes around. 

“You never give up hope, that’s what I tell my kids,” he said. But he added, “they’re in a tough spot.” 

Contact Steve Johnson at 408-920-5043. Follow him at Twitter.com/ steveatmercnews. 

Re-invent HP - begun at top by firing entire Board of Directors

It is unfortunate that such a great company has one of the worst Board of Directors.. Who despite mistakes after mistakes are still allowed to sit on top. I have no personal grudge against them but professionally and collectively.. it stinks.. before HP lays off any single employee for whatever reason.. they should first get rid of their board..

How can they hire/hire/hire such a incompetent CEOs.. or I should also add fire some competent CEOs.. whatever they got... I have no sympathy with HP share holders.. ultimately it is shareholders who are electing and re electing this incompetent board years after years.. yesterday's stock plunge serves them right.. I hope they look at the root of this problem and fix it... sooner the better for them.. otherwise HP is going to be history very soon.. it will be really sad day for bay area but I am sure our vibrant economy and ecosystem will take care of it and get probably ten other equally great companies..

On the other hand, we don't know about future.. it could be a great buying opportunity and stock may turn around in future.. however, under current circumstances it looks pretty dim..

I am no expert in finance or strategy but as far as I know about Meg.. her only contribution to this society was that she happen to be at right place and at right time during dot com boom.. and eBay's core business model worked well.. but during her later years at eBay.. in my view.. she didn't contributed anything to the top line, but instead bled it.. It was fortunate for eBay that she was fired at right time before she could bleed it to death.. and then her race for California governership was no less a fiasco..

Her good fortune was HP's highly incompetent board who hired her in quick move to save themselves from embarrassment of firing Mark..

HP CEO SPEAKS, STOCK DROPS 13 PERCENT

Pep talk disappoints investors

Whitman says company is making progress but faces long turnaround

By Steve Johnson

sjohnson@mercurynews.com 

SAN FRANCISCO — Beleaguered Hewlett-Packard saw its stock price plunge nearly 13 percent Wednesday after CEO Meg Whitman failed to wow Wall Street with her strategy to revive the company.

In what she presumably hoped would be a pep talk to bolster investor confidence, Whitman told analysts at a San Francisco gathering that the troubled company is making progress with new products, streamlining its operations and getting its costs under control. But she warned that her efforts are being hindered by “a worsening macroeconomic environment,” particularly in Europe and China, and repeated her previous prediction that it could take four to five years to turn the corporation around.

“It’s going to take longer to right this ship than anyone would like,” said Whitman, who was named CEO a year ago. Noting that the Palo Alto company has been beset by numerous problems — many caused by its frequent shifts in leadership — she added, “I believe all of this is fixable, but it’s going to take some time.”

HP’s chief financial officer, Cathie Lesjak, added that the company’s next 12 months are “going to be another challenging year,” projecting its 2013 fiscal year earnings at $2.10 to $2.30 a share.

That didn’t sit well with Wall Street, where analysts surveyed by Thomson Reuters generally had expected earnings per share of $3.09. Shortly after Whitman began her presentation, the company’s stock price began slipping and eventually closed at $14.91, a drop of $2.22 or about 13 percent. HP’s shares haven’t been that low since 2002. 

 “It’s going to take longer to right this ship than anyone would like.

... I believe all of this is fixable, but it’s going to take some time.”

— HP CEO MegWhitman

---

HP’s presentation drew mixed reviews from industry experts. 

In general, “they did an excellent job,” said analyst Rob Enderle, adding that he was particularly impressed by the company’s new emphasis on more clearly quantifying how well its business units are doing. 

“It’s a good sign,” he said. “They are cleaning the windshield, which makes it easier for them to stay on the road. It gives them a view of what’s going on.” 

But while tech specialist Patrick Moorhead credited HP for providing “a very candid and honest evaluation of the company today,” he said it needs to better detail how it intends to succeed in some markets, such as smartphones and tablets. He added, “they will need to do this for Wall Street to view them as a growth company.” 

Trip Chowdhry, an analyst with Global Equities Research, was especially disappointed in HP’s earnings projections for next fiscal year. 

“We should have expected something better,” he said. “The current management team has been in place for a year. There is hardly anything to get excited about.” 

Many investors have cooled on HP as its sales have flattened, its profit has slumped and its debt has ballooned to $30.6 billion, prompting it recently to announce it is eliminating 29,000 jobs over the next couple of years. 

Analysts have criticized the company for entering too many business niches. It sells everything from networking switches, routers and data storage devices to calculators, software and printers. On Wednesday, Whitman said it plans to trim its product lines to make them more efficient. 

She and other HP executives also said the company is coming out soon with an array of new servers, printers and personal computing devices that will make it more competitive. 

Another source of analyst criticism is that HP has failed to adequately address the increasing pressure its PC business faces from smartphones and tablets. HP previously had no luck selling smartphones and a 

tablet based on technology it obtained from its 2010 purchase of Sunnyvalebased Palm. 

Nonetheless, HP is again developing a smartphone, and on Monday the company introduced a tablet aimed at business and government customers. 

Some analysts contend the corporation is so far behind other smartphone and tablet makers that it should get rid of its PC and printer division. Whitman disagreed with that assessment Wednesday. Insisting that HP is headed in the right direction, she told the analysts, “We have a real handle on what the challenges are in front of this company and we have a plan in place to take on those challenges. 

“I believe with every single bone in my body that if we do this right we can set up HP to be a world-class technology leader” well into the future, she added. 

Contact Steve Johnson at 408-920-5043. 

formulae to list your name in legends

Create the Crisis..
Take BOLD Blame for the Crisis..
Solve the Crisis..

Register your name as legendary CEO or executive in the history of Management..

I am sure Mr. Cook is really sincere in his apology.. everyone is saying same thing about him.. and they way Apple has handled these crisis it will be a great case studies for B Schools.

However, couple of cents from my side on all this..

Initially, listening to all this crisis.. I was hesitant to upgrade to iOS 6.0 on my iPhone 4S. I didn't wanted to loose my Google Maps app.. then I tested Google maps on Chrome browser.. found it good enough.. for me.. Google map was mainly used to check traffic and search local things any how.. it didn't have that turn by turn voice navigation... I was using Mapquest for that and despite very poor reviews about mapquest application, I was really satisfied and happy.. mostly..
I liked my status quo..

But, my inner Geek finally won over this map issue and I took a plunge.. I upgraded my iPhone 4S to iOS 6.0 and first thing I did was to create Google maps in my Google Chrome application.. and then also download You-Tube application..

While coming back from office.. I thought of testing Apple's Map.. I fed my home address and it provided me map using freeways etc.. with decent indication of traffic hot spots.. I took my standard route which avoided the freeways which are always recommended by all the maps..

Honestly, I was really surprised at nimbleness of Apple's map to provide me updated route with updated traffic information.. at least on the road.. it was amazingly fast and correct in adjusting to my new route and showing updated route every time I digressed from my route.. I also searched for some places like my favorite Costco etc. and it was all together great experience.. At least ten times better than Mapquest and zillion times better than Google Maps (it should be infinitely as Google maps on iPhone didn't even have this true navigation system..)..

I was literally blown away by Apple Maps..

What could be the reason..  I think short answer is simply:

"Expectations"..

my expectations were so low with Apple Maps.. as my frame of reference was Mapquest.. which I feel like deleting from my iPhone.. and then all this bad mouthing about Apple Maps.. it really made me a super fan of apple maps.. Despite all this negative publicity about Apple Maps.. Apple Maps is The Maps I am using for all the purpose..

Now.. the my conspiracy theory version.. I really feel that all this negative publicity is kind of self inflicted or at least driven by Apple itself.. I very strongly feel that they have tendency to create controversy after launch.. and use this controversy to get free advertisement from media and social networks.. BTW, I am also doing same thing.. isn't it..

Now, coming back to my title of this topic.. I have no doubt about Mr. Cook's sincerity and boldness of asking own users to use competing products.. but.. but.. but..... In my view Apple Map is much better than most of their competitor.. except may be from Google's app on Android phones itself.. So in a way what Mr. Cook is asking their users.. please try out our competitor's applications.. do some comparison.. and decide for yourself.. most likely you would like our Apple Maps much better despite (may be) one percent errors in maps in some locations.. This is sure shot way of making your customers your die hard fans.. just like I am.. for now till I hit major snag which makes me loose 15-20 minites on the road.. I hope by that time Google will come up with native iOS app for their maps..

Overall.. really nice strategy.. Great Job Mr. Cook..

A CHANGE IN DIRECTION

Apple finds itself apologizing for Maps app flap

By Patrick May

pmay@mercurynews.com 

Mea culpa, mea culpa, mea Mapplegate culpa.

Apple, CEO Tim Cook said in a statement released Friday, is sorry. Sorry its new Maps app for the iPhone and iPad sucks at times. Sorry that scores of users have been led on wild goose chases using the thing. Sorry Apple did not quite live up to its “incredibly high standard” this time around.

And while Cook did not say Apple was sorry for booting Google Maps off its iPhone’s home screen and replacing it with its own directionally challenged version, he may as well have. In his statement, the CEO encouraged users to download other apps and mapping tools to find their way around town, at least until Apple works out the kinks.  The Maps app’s flaws haven’t been lost on customers, eliciting online backlash. 

From Tim Cook: “At Apple, we strive to make world-class products that deliver the best experience possible to our customers.
With the launch of our new Maps last week, we fell short on this commitment.” 

“I’m used to more functionality from Apple, not less,” said Jeremy Kemp, a lecturer at the School of Library and Information Science at San Jose State, adding that he got so frustrated using Maps the other day to find a transit route home that he “ended up putting the iPhone in my pocket and asking someone at the train station for directions. It’s good that Cook has apologized; it’s actually noble. But I’d rather have functionality than nobility.” 

While the blogosphere worked itself into a fine lather all week agonizing over Maps’ shortcomings, analysts cautioned that the map flap will have little effect on the company’s solidgold bottom line. They said Apple makes most of its money selling gadgets, not software. Some pointed out that most new apps, including Google Maps when it was introduced in 2005, had bugs. But over time, as more users essentially trained the software to navigate even smarter, the apps improved. 

Pointing out that Twitter sentiment in the week since the iPhone 5’s debut was 71percent positive versus 49percent for the iPhone 4S, analyst Gene Munster with Piper Jaffray said in a note to investors that “the bottom line is that consumers do not seem to be overly concerned about the shortcomings of Maps.” 

Users who dislike Apple Maps can download other map apps, or access sites such as Google Maps through the browser. But because non-Apple apps aren’t native to the device, clicking an address in an email on an iPhone 5 would still call up the Apple mapping tool, not the alternative. 

Cook’s public apology stood in stark contrast to how his predecessor, the late Steve Jobs, might have handled the brouhaha. After problems arose with the iPhone 4’s antenna and its impact on signal strength — a saga dubbed “Antennagate” — Jobs was ridiculed for suggesting users simply alter the way they hold the devise. Although Jobs admitted at a news conference that “we’re not perfect and phones aren’t perfect, either,” some interpreted his response to Antennagate as defensive, even a bit sarcastic. 

Cook’s approach was far more conciliatory. 

“At Apple,” the CEO said, “we strive to make worldclass products that deliver the best experience possible to our customers. With the launch of our new Maps last week, we fell short on this commitment. We are extremely sorry for the frustration this has caused our customers and we are doing everything we can to make Maps better.” 

Some analysts speculate that Apple dumped Google Maps because of the growing rivalry between the two tech giants. But in his statement, Cook said Apple’s primary aim is to “provide our customers with even better Maps including features such as turn-by-turn directions, voice integration, Flyover and vector-based maps.” 

Ever since the Cupertino company released an update to its iPhone and iPad operating system that replaced Google Maps with its own app, the Internet has been deluged with complaints that the new software offers fewer details, lacks public transit directions and puts landmarks in the wrong places. One reviewer pointed out that when he fired up Maps, the Washington Monument was misplaced, and a search for Cleveland, Ga., took him to Cleveland, Tenn. 

The grousing has not let up, filling repositories like the one at the http:// theamazingios6maps. tumblr. com with embarrassing examples of Apple Maps run amok. Motorola even piled on, creating an ad with the caption “#iLost” placed beneath the ill-fated iPhone app. 

But Analyst Shaw Wu with Sterne Agee praised Cook, saying “at the end of the day, Apple’s goal is to deliver the best user experience possible, and that’s exactly what they’re doing, even if it means sending users to other vendors for the time being. 

“What they care about is: Are you happy with the hardware? If you are, fine,” Wu said. “But if you want to use other software, go ahead. Apple’s in the business of selling phones and tablets. And this won’t hurt that.” 

Contact Patrick May at 408-920-5689. Follow him at Twitter.com/patmaymerc. 

Massive layoffs reportedly on track at Yahoo

Change is only constant!!!

Somebody is firing when most of the other silicon valley companies are hiring. Even in new economy of dot.com there are old folks who are creating space for newcomers!! That is the power of Change!!

Fortunately, Yahoo has one of the best talent and job market outside in Silicon valley is really hot, so it will definitely be good gain for valley and hopefully for employees as well.

Nevertheless, I don't think that Yahoo has any fat left which needs to be cut. These types of cuts will inherently put them in vicious circle of shrinkage.. In my view management should focus on strategy rather than working on these small cuts here and there in operations. If anything can save Yahoo, is cool mind of management and coming up decent strategy. Energy is focussed on wrong place.. sad but true. Yahoo was once icon of Valley..

Yahoo is still leader or one of the top market players in many areas. Email is one good example.. Slowly they are giving that lead to Google.. I haven't heard any major upgrade from Yahoo on their email system for long time. Instead of they tried hard to extract money for their service and failed. Right now their email is one of the slowest to boot up and takes most of the resources. Email is one simple example.

Same is true for Yahoo groups. Yahoo had such a great lead. They were de-facto leaders.. They simply forgot to innovate and make it easier to use. They simply lost it to Facebook.. Again, these are very small cases in terms of overall Yahoo but at the same time they represent very important face of Yahoo to most of the users.

Most important strategy change which Yahoo has to do is to think about users first instead of themselves. Once users are happy, users will rewards them any how and Yahoo can very easily monetize. Right now, if I go to Yahoo, it seems so busy and overly crowded with advertisements I feel like finishing my work and running away...