7 ms·

Zynga Stock Dives as Facebook Keeps Backing Away

51 points by lleims 14y ago

jasonkolb 14y ago
Facebook will be able to buy them for the price of a taco soon.
- w1ntermute 14y ago
  A virtual Facebook taco, at that.
- uvTwitch 14y ago
  the taco would be a better investment.
AznHisoka 14y ago
We should all short Zynga. Zynga has nothing special, no competitive advantage, no intellectual capital, no special sauce to maintain their market share.. and what OTHER social platforms are there for games? Twitter? Google+? "Oh, our plan is to launch poker in the UK!" Um.. ok, and compete with 10000 other companies that had a decade head start and know all about the online poker business. Good luck with that.
- zaidf 14y ago
  Oh, our plan is to launch poker in the UK!" Um.. ok, and compete with 10000 other companies that had a decade head start and know all about the online poker business. Good luck with that. I think your reasoning is perfectly logical and yet, it sounds similar to all the VCs who turned down google back in the day because hey all these other guys had been doing search for years so how can you compete with em? You may argue that Google actually had a plan to compete with them to which I'd ask you in how much depth you have researched Zynga's poker plans before reaching the conclusions in your post.
  - jorts 14y ago
    While I don't think the Google Search : Zynga Poker comparison is fair, I think that your comments' parent has a valid point as the online gambling market is pretty saturated. It would be interesting to see if they can do something innovative for the online gambling marketplace.
    - RobAtticus 14y ago
      Probably a long shot, but should online gaming ever come back to the US (and perhaps this will work in other markets), maybe Zynga can position themselves as the choice for casual gambler. If they can convert a bunch of their Farmville, etc users into playing poker, it could make for some very soft games. I don't think you'll see them as the place to be for serious players who want high limits or lots of different tournaments/options, but something that even the most casual of poker players/gamblers can be very lucrative (as well as draw in low/mid limit sharks who want easy cash). This all depends on the premise that the friction from being a player of one Zynga game to being a gambling player on a Zynga game is less than being a player of a Zynga game and also joining an unrelated gambling site.
- ivany 14y ago
  Zynga has nothing special, no competitive advantage, no intellectual capital, no special sauce to maintain their market share You're absolutely right. Sadly their valuation, barely higher than the value of their real estate and cash pile, reflects this.
- rhizome 14y ago
  They seem to be doing more or less OK with "nothing special," regardless of what any of thinks of their techniques for doing so. What's to stop them from copying yet another business and surviving on that?
wow_that_sucked 14y ago
good fuck you zynga. My first taste of their shitty ways, was just the other week. lidgren - is the best open networking library available for indie gamers and this fuck, goes and duplicates the code base, re-releasing it on a separate source control site. THEN he mails the group, including the author, asking for permission. After hearing about this, the author understandably is concerned about splitting the dev hub of his code across multiple sites, and its community, culminating in him saying this is not a good idea. The stupid fuck, replies saying he already has done it, and matter of factly states it is getting quite popular. Community hits back, tells him it is detrimental to everyone, and asks him to take it down. Eventually after a few days of building pressure, he does. I was curious, did a little research. Turns out the dickhead was an important dev from Zynga. I have omitted names. Fuck Zynga.
- kt9 14y ago
  Its understandable that you don't like zynga but this post isn't constructive. In general terms rant != cool.
  - yesimahuman 14y ago
    Also, as far as I can tell the license is MIT so he can pretty much do whatever the hell he wants with it. Open source goes both ways.
    - wow_that_sucked 14y ago
      the point of the rant is that he was a dick
      - bdcravens 14y ago
        I feel you, but there's some serious dicks in the open source community as well. It seems the same behaviors somehow have different meaning if they're attached to a company that it's popular to dislike.
jrosenblatt 14y ago
Sure, ZNGA went down 6% yesterday, to about the same price it was on Wednesday, which is still 15% more than it was a couple weeks earlier. Not sure about Zynga as a company, but it's easy to overreact to the market's reaction to this news.
- rm999 14y ago
  I sort of agree with you, but Zynga is currently so dependent on Facebook that even small or expected news like this is major news for Zynga. I'd call a 6% drop fairly significant because investors already knew the relationship with facebook was souring and have probably priced a lot of it in.
- travisp 14y ago
  Even though this is Wired, this is typical of financial reporting: to take a single day of price movements and write whole stories about them, completely ignoring larger price movements or alternative explanations. I've even seen news articles about stock market movements changed after the price swung from negative to positive in the same day... but the article kept the explanation for the price movement essentially the same! My guess is that this Wired story would have found a way to be written regardless of what the stock price did. But, getting to say that it "dove 7%" makes for good headlines (even if soared 8% just the day before, meaning that it just "dove" back to its original price). While I don't think Zynga is a great company to invest in, its stock price is very volatile, which probably makes for good frequent attention grabbing headlines. Sure, this news was part of the reason the stock price was down, but apparently market price setters still think the company is 13% more valuable than it was 30 days ago.
  - hosay123 14y ago
    One of the early innovations of Bloomberg was to totally automate certain classes of news story, driven entirely by data. As you can see from spending any length of time browsing Google Finance, the number of this class of stories in the present day is absolutely huge, from a wide variety of 'news' outlets. "Top movers! Miners down 0.00001% as fears grow over $calendar->getNextECBAnnouncement()" What's more terrifying is that Google Finance even syndicates these articles, and that people trade off of them - "informed" traders, buying and selling based on articles that are quite literally generated from sampling noise
minimaxir 14y ago
It's worth noting that Zynga has diversified revenue streams other than the games themselves: they have a pending Draw Something TV show [1] and physical merchandise [2]. That probably won't be enough to save the company, though. It wouldn't surprise me if Zynga pivots into a Rovio. [1] http://www.tvguide.com/News/CBS-Draw-Something-Pilot-1048932.aspx http://www.tvguide.com/News/CBS-Draw-Something-Pilot-1048932... [2] http://i.imgur.com/OZSZb.jpg http://i.imgur.com/OZSZb.jpg
- antr 14y ago
  can you point me to the estimated revenue numbers? if zynga wants me to consider this going fwd they need to throw potential investors a bone. such "revenue streams" with no quantitative backup is plain speculation, water cooler chitchat.
  - podperson 14y ago
    I think the idea is that each player gets their own revenue stream and clicks on it until it gets bigger. You can share your "earnings results" with friends and trade rare revenue stream features, and there's a kind of limited PvP setup where you can pit your revenue stream against another player's and click a bunch of times and one of your revenue streams gets bigger.
- joezydeco 14y ago
  Having friends who have gotten TV game show concepts to the pilot phase, it doesn't pay jack squat unless you achieve Jeopardy! or Wheel Of Fortune level of fame.
hayksaakian 14y ago
Well that was completely unexpected... Said no one ever.
wilfra 14y ago
I don't understand why the market reacted negatively to this news. There are a number of positives: -They don't have to use FB credits -They don't have to use anything FB on Zynga.com -They got a guarantee if their is real-money gaming on FB.com, they have to be allowed in So what if FB can now make their own games? They aren't going to.
macspoofing 14y ago
Yeah Zynga sucks but this is another cautionary tale of relying on someone else's (web) platform.
- Karunamon 14y ago
  Not really. Zynga isn't failing because they were screwed by a Facebook policy change or really anything Facebook themselves are doing (unlike, say, Twitter's recent API brouhaha), but because of their business model. AznHisoka in this thread said it better than I can; they have nothing to build a business on.
  - macspoofing 14y ago
    Facebook changed their platform right underneath them.

51 points by lleims 14y ago

jasonkolb 14y ago

Facebook will be able to buy them for the price of a taco soon.

w1ntermute 14y ago
A virtual Facebook taco, at that.
uvTwitch 14y ago
the taco would be a better investment.

AznHisoka 14y ago

We should all short Zynga. Zynga has nothing special, no competitive advantage, no intellectual capital, no special sauce to maintain their market share.. and what OTHER social platforms are there for games? Twitter? Google+? "Oh, our plan is to launch poker in the UK!" Um.. ok, and compete with 10000 other companies that had a decade head start and know all about the online poker business. Good luck with that.

zaidf 14y ago
Oh, our plan is to launch poker in the UK!" Um.. ok, and compete with 10000 other companies that had a decade head start and know all about the online poker business. Good luck with that. I think your reasoning is perfectly logical and yet, it sounds similar to all the VCs who turned down google back in the day because hey all these other guys had been doing search for years so how can you compete with em? You may argue that Google actually had a plan to compete with them to which I'd ask you in how much depth you have researched Zynga's poker plans before reaching the conclusions in your post.
- jorts 14y ago
  While I don't think the Google Search : Zynga Poker comparison is fair, I think that your comments' parent has a valid point as the online gambling market is pretty saturated. It would be interesting to see if they can do something innovative for the online gambling marketplace.
  - RobAtticus 14y ago
    Probably a long shot, but should online gaming ever come back to the US (and perhaps this will work in other markets), maybe Zynga can position themselves as the choice for casual gambler. If they can convert a bunch of their Farmville, etc users into playing poker, it could make for some very soft games. I don't think you'll see them as the place to be for serious players who want high limits or lots of different tournaments/options, but something that even the most casual of poker players/gamblers can be very lucrative (as well as draw in low/mid limit sharks who want easy cash). This all depends on the premise that the friction from being a player of one Zynga game to being a gambling player on a Zynga game is less than being a player of a Zynga game and also joining an unrelated gambling site.
ivany 14y ago
Zynga has nothing special, no competitive advantage, no intellectual capital, no special sauce to maintain their market share You're absolutely right. Sadly their valuation, barely higher than the value of their real estate and cash pile, reflects this.
rhizome 14y ago
They seem to be doing more or less OK with "nothing special," regardless of what any of thinks of their techniques for doing so. What's to stop them from copying yet another business and surviving on that?

wow_that_sucked 14y ago

good fuck you zynga. My first taste of their shitty ways, was just the other week. lidgren - is the best open networking library available for indie gamers and this fuck, goes and duplicates the code base, re-releasing it on a separate source control site. THEN he mails the group, including the author, asking for permission. After hearing about this, the author understandably is concerned about splitting the dev hub of his code across multiple sites, and its community, culminating in him saying this is not a good idea. The stupid fuck, replies saying he already has done it, and matter of factly states it is getting quite popular. Community hits back, tells him it is detrimental to everyone, and asks him to take it down. Eventually after a few days of building pressure, he does. I was curious, did a little research. Turns out the dickhead was an important dev from Zynga. I have omitted names. Fuck Zynga.

kt9 14y ago
Its understandable that you don't like zynga but this post isn't constructive. In general terms rant != cool.
- yesimahuman 14y ago
  Also, as far as I can tell the license is MIT so he can pretty much do whatever the hell he wants with it. Open source goes both ways.
  - wow_that_sucked 14y ago
    the point of the rant is that he was a dick
    - bdcravens 14y ago
      I feel you, but there's some serious dicks in the open source community as well. It seems the same behaviors somehow have different meaning if they're attached to a company that it's popular to dislike.

jrosenblatt 14y ago

Sure, ZNGA went down 6% yesterday, to about the same price it was on Wednesday, which is still 15% more than it was a couple weeks earlier. Not sure about Zynga as a company, but it's easy to overreact to the market's reaction to this news.

rm999 14y ago
I sort of agree with you, but Zynga is currently so dependent on Facebook that even small or expected news like this is major news for Zynga. I'd call a 6% drop fairly significant because investors already knew the relationship with facebook was souring and have probably priced a lot of it in.
travisp 14y ago
Even though this is Wired, this is typical of financial reporting: to take a single day of price movements and write whole stories about them, completely ignoring larger price movements or alternative explanations. I've even seen news articles about stock market movements changed after the price swung from negative to positive in the same day... but the article kept the explanation for the price movement essentially the same! My guess is that this Wired story would have found a way to be written regardless of what the stock price did. But, getting to say that it "dove 7%" makes for good headlines (even if soared 8% just the day before, meaning that it just "dove" back to its original price). While I don't think Zynga is a great company to invest in, its stock price is very volatile, which probably makes for good frequent attention grabbing headlines. Sure, this news was part of the reason the stock price was down, but apparently market price setters still think the company is 13% more valuable than it was 30 days ago.
- hosay123 14y ago
  One of the early innovations of Bloomberg was to totally automate certain classes of news story, driven entirely by data. As you can see from spending any length of time browsing Google Finance, the number of this class of stories in the present day is absolutely huge, from a wide variety of 'news' outlets. "Top movers! Miners down 0.00001% as fears grow over $calendar->getNextECBAnnouncement()" What's more terrifying is that Google Finance even syndicates these articles, and that people trade off of them - "informed" traders, buying and selling based on articles that are quite literally generated from sampling noise

minimaxir 14y ago

It's worth noting that Zynga has diversified revenue streams other than the games themselves: they have a pending Draw Something TV show [1] and physical merchandise [2]. That probably won't be enough to save the company, though. It wouldn't surprise me if Zynga pivots into a Rovio. [1] http://www.tvguide.com/News/CBS-Draw-Something-Pilot-1048932.aspx http://www.tvguide.com/News/CBS-Draw-Something-Pilot-1048932... [2] http://i.imgur.com/OZSZb.jpg http://i.imgur.com/OZSZb.jpg

antr 14y ago
can you point me to the estimated revenue numbers? if zynga wants me to consider this going fwd they need to throw potential investors a bone. such "revenue streams" with no quantitative backup is plain speculation, water cooler chitchat.
- podperson 14y ago
  I think the idea is that each player gets their own revenue stream and clicks on it until it gets bigger. You can share your "earnings results" with friends and trade rare revenue stream features, and there's a kind of limited PvP setup where you can pit your revenue stream against another player's and click a bunch of times and one of your revenue streams gets bigger.
joezydeco 14y ago
Having friends who have gotten TV game show concepts to the pilot phase, it doesn't pay jack squat unless you achieve Jeopardy! or Wheel Of Fortune level of fame.

hayksaakian 14y ago

Well that was completely unexpected... Said no one ever.

wilfra 14y ago

I don't understand why the market reacted negatively to this news. There are a number of positives: -They don't have to use FB credits -They don't have to use anything FB on Zynga.com -They got a guarantee if their is real-money gaming on FB.com, they have to be allowed in So what if FB can now make their own games? They aren't going to.

macspoofing 14y ago

Yeah Zynga sucks but this is another cautionary tale of relying on someone else's (web) platform.

Karunamon 14y ago
Not really. Zynga isn't failing because they were screwed by a Facebook policy change or really anything Facebook themselves are doing (unlike, say, Twitter's recent API brouhaha), but because of their business model. AznHisoka in this thread said it better than I can; they have nothing to build a business on.
- macspoofing 14y ago
  Facebook changed their platform right underneath them.