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Zynga is still worth $2.6B so I would not call them a "dud". http://finance.yahoo.com/q/ks?s=ZNGA+Key+Statistics http://finance.yahoo.com/q/ks?s=ZNGA+Key+Stati

by lacker 11y ago

Zynga is still worth $2.6B so I would not call them a "dud". http://finance.yahoo.com/q/ks?s=ZNGA+Key+Statistics http://finance.yahoo.com/q/ks?s=ZNGA+Key+Statistics

notahacker 11y ago
They might not be staring death in the face, but you'd call it a dud if you'd bought it at the "unicorn" valuation of $11.5Bn. Given Zynga is losing money not trying to grow so much as reinvent themselves to keep up with their users' short attention spans, I'd be much happier being short on them than long too. Though FWIW, I think Zynga's performance is probably better than Snapchat will do long term, since they at least nailed the art of generating revenue.
- encoderer 11y ago
  Mind you, I've never used it, but Snapchat has 100 Million monthly uniques. I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure. Anecdotally, just a month ago I was walking and because i live in San Francisco I happened across a corner (Howard and New Montgomery) where there were ~20 girls about 13 years old being polled about their tastes, and the questions I heard waiting for my light was "Do you guys like smartphones?" ("yes", duh), "Is your phone more important than your TV?" ("yes", duh), and "What is your favorite app?" and the answer was unanimously Snapchat. Snapchat is the teenagers answer to the question many millennials have fretted about -- "how will ppl born today deal with having all 18 years of their development online". The answer is: they don't put it online. It's peer-to-peer and temporary by social contract, even if the technology is imperfect. So far, snapchat has played a savvy game. As an engineer, if they were based in SF, I'd consider working for them. They have tapped into something. Because my 28 year old wife has also been hooked on Snapchat for what seems like a lifetime now. Her most frequent contacts? Both of her 60+ year old parents, numerous cousins and aunts, etc. Her dad uses it to send stupid pictures that you might not expect from a 65 year old white haired CEO-type whose work is about as far away from tech as you can get.
  - netcan 11y ago
    Popular and sticky in a revenue generating sense are not always the same thing. Crocs were a huge hit. They sold a lot of sandals quickly.
    - marvin 11y ago
      I heard the exact same thing said about Youtube a few years ago. Can you name a software company that has had 100+ million users and failed?
      - nostrademons 11y ago
        MySpace and Orkut both had over 100M users and failed, but it was because of neglect by their corporate owners, not a failure to monetize. AOL made it to about 30M at their peak; they're down to about 2M now. I agree with the general point of this thread (that once you get to 100M+ users, there will be a way to monetize), but if you're trying to make the stronger point that once a company gets to 100M+ users they're invulnerable, there are ample counterexamples. [1] http://mashable.com/2009/04/16/one-million-ning-networks/ http://mashable.com/2009/04/16/one-million-ning-networks/
      - hnnewguy 11y ago
        Having "100+ million users" is a relatively new concept, period. It shouldn't be surprising that very few, if any, have failed. But that doesn't tell us anything about the future. Before Enron, how many companies with $100+ billion in revenues went bankrupt?
  - beagle3 11y ago
    > I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure. Twitter has been around for almost 10 years now, and while they have been able to monetize somewhat, they haven't been able to turn a profit, and they don't seem to make great progress in that direction. It's not that they can't make money - it's just that so far, they haven't been able to make enough money to support the valuation.
iaw 11y ago
They've also lost $225 million in the last year. They have a $2.6B market cap but what does that mean if they still aren't making money?
- wpietri 11y ago
  Definitely. And that ignores the extent to which they may not be creating any value. I think they're a "games company" only in the same sense that people who make shitty video poker machines are. That is, they're not creators of fun experiences, but parasites on those inclined to addiction. Business is mainly about creating value for customers; companies that make money out proportion to the value created tend to get optimized away.
- MichaelGG 11y ago
  Twitter's also losing money, right? LinkedIn, despite all their tactics, makes double digit millions only? Splunk, at several billion valuation loses more and more money, too (enough that killing all R&D still wouldn't make them profitable).
  - ghshephard 11y ago
    Splunk's revenue chart looks great: https://ycharts.com/companies/SPLK/revenues_ttm https://ycharts.com/companies/SPLK/revenues_ttm When you are still growing, the goal is to invest as much as you can in further growth. Taking profits just means you pay taxes. The only problem with losing money is if it's not the result of increasing growth (which can later be turned into much bigger profits)

by lacker 11y ago

Zynga is still worth $2.6B so I would not call them a "dud". http://finance.yahoo.com/q/ks?s=ZNGA+Key+Statistics http://finance.yahoo.com/q/ks?s=ZNGA+Key+Statistics

notahacker 11y ago

They might not be staring death in the face, but you'd call it a dud if you'd bought it at the "unicorn" valuation of $11.5Bn. Given Zynga is losing money not trying to grow so much as reinvent themselves to keep up with their users' short attention spans, I'd be much happier being short on them than long too. Though FWIW, I think Zynga's performance is probably better than Snapchat will do long term, since they at least nailed the art of generating revenue.

encoderer 11y ago
Mind you, I've never used it, but Snapchat has 100 Million monthly uniques. I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure. Anecdotally, just a month ago I was walking and because i live in San Francisco I happened across a corner (Howard and New Montgomery) where there were ~20 girls about 13 years old being polled about their tastes, and the questions I heard waiting for my light was "Do you guys like smartphones?" ("yes", duh), "Is your phone more important than your TV?" ("yes", duh), and "What is your favorite app?" and the answer was unanimously Snapchat. Snapchat is the teenagers answer to the question many millennials have fretted about -- "how will ppl born today deal with having all 18 years of their development online". The answer is: they don't put it online. It's peer-to-peer and temporary by social contract, even if the technology is imperfect. So far, snapchat has played a savvy game. As an engineer, if they were based in SF, I'd consider working for them. They have tapped into something. Because my 28 year old wife has also been hooked on Snapchat for what seems like a lifetime now. Her most frequent contacts? Both of her 60+ year old parents, numerous cousins and aunts, etc. Her dad uses it to send stupid pictures that you might not expect from a 65 year old white haired CEO-type whose work is about as far away from tech as you can get.
- netcan 11y ago
  Popular and sticky in a revenue generating sense are not always the same thing. Crocs were a huge hit. They sold a lot of sandals quickly.
  - marvin 11y ago
    I heard the exact same thing said about Youtube a few years ago. Can you name a software company that has had 100+ million users and failed?
    - nostrademons 11y ago
      MySpace and Orkut both had over 100M users and failed, but it was because of neglect by their corporate owners, not a failure to monetize. AOL made it to about 30M at their peak; they're down to about 2M now. I agree with the general point of this thread (that once you get to 100M+ users, there will be a way to monetize), but if you're trying to make the stronger point that once a company gets to 100M+ users they're invulnerable, there are ample counterexamples. [1] http://mashable.com/2009/04/16/one-million-ning-networks/ http://mashable.com/2009/04/16/one-million-ning-networks/
    - hnnewguy 11y ago
      Having "100+ million users" is a relatively new concept, period. It shouldn't be surprising that very few, if any, have failed. But that doesn't tell us anything about the future. Before Enron, how many companies with $100+ billion in revenues went bankrupt?
- beagle3 11y ago
  > I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure. Twitter has been around for almost 10 years now, and while they have been able to monetize somewhat, they haven't been able to turn a profit, and they don't seem to make great progress in that direction. It's not that they can't make money - it's just that so far, they haven't been able to make enough money to support the valuation.

iaw 11y ago

They've also lost $225 million in the last year. They have a $2.6B market cap but what does that mean if they still aren't making money?

wpietri 11y ago
Definitely. And that ignores the extent to which they may not be creating any value. I think they're a "games company" only in the same sense that people who make shitty video poker machines are. That is, they're not creators of fun experiences, but parasites on those inclined to addiction. Business is mainly about creating value for customers; companies that make money out proportion to the value created tend to get optimized away.
MichaelGG 11y ago
Twitter's also losing money, right? LinkedIn, despite all their tactics, makes double digit millions only? Splunk, at several billion valuation loses more and more money, too (enough that killing all R&D still wouldn't make them profitable).
- ghshephard 11y ago
  Splunk's revenue chart looks great: https://ycharts.com/companies/SPLK/revenues_ttm https://ycharts.com/companies/SPLK/revenues_ttm When you are still growing, the goal is to invest as much as you can in further growth. Taking profits just means you pay taxes. The only problem with losing money is if it's not the result of increasing growth (which can later be turned into much bigger profits)