Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M • Hacker News Board

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#141

Post by thedufer » Tue, Jun 04, 2013, 7:13 PM UTC

ksk wrote: post #69

ianstallings wrote: post #14

I bet all the execs got well paid for their terrible efforts though and they will slide into new positions of power regardless of their merit. We need to take our industry back from the leeches. The near-sighted execs with nothing but paper accolades and networks of cronies.

Well, the core problem is that the freemium model is not sustainable for most businesses. There are very very few companies that can remain cash flow positive (let alone making large profits). The execs get paid well because the owners of those companies assume (rightly or wrongly) that the execs performance determines the outcome of the business. The average engineer working in that company is assumed to not have su…

> BTW If any company started holding up salaries of their employees dependent on profit, nobody would join that company !

That's a pretty bold statement. Any particular reason you think that's true? I don't think profit sharing is that arcane of a concept. Unless you're talking about the extreme of no salary, only profit-sharing, in which case, yeah. But that's not what execs get, either.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#142

Post by InclinedPlane » Tue, Jun 04, 2013, 7:15 PM UTC

pavs wrote: post #12

I want to know what kind of thought process goes on company/individual's mind when they decide to do an acquisition like this, for $200M, which doesn't make enough money to justify it. You would think when you are throwing around that kind of money, they would do some rudimentary research? How much money was omgpop making at the time of the acquisition?

I think it's a testament to how quickly the business is changing and how increasingly broken the conventional wisdom surrounding investment and acquisition is becoming.

If you look at the way business worked in, say, the '80s most companies that became big did so by selling stuff, and having positive rates of return. And the general trend for a company that was growing was for it to maintain that growth for several years, or at least retain that level of business. But today business is far more ephemeral. Revenue can be far more sporadic, monetization can be far more complex, and the valuation of a "customer base" can be much more difficult because of that.

So you can get these flash in the pan products that produce millions of dollars in revenue for a few months but then maybe they go away just as quickly and aren't worth anything later. It makes for a weird market, and it makes for an even weirder industry, especially when things tend to be organized around "empire building" and such-like.

I suspect that in the future there will be more and more of a focus around project-based business services rather than organization-based services. Kickstarter, I think, is an example of this.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#143

Post by InclinedPlane » Tue, Jun 04, 2013, 7:19 PM UTC

ksk wrote: post #69

ianstallings wrote: post #14

I bet all the execs got well paid for their terrible efforts though and they will slide into new positions of power regardless of their merit. We need to take our industry back from the leeches. The near-sighted execs with nothing but paper accolades and networks of cronies.

Well, the core problem is that the freemium model is not sustainable for most businesses. There are very very few companies that can remain cash flow positive (let alone making large profits). The execs get paid well because the owners of those companies assume (rightly or wrongly) that the execs performance determines the outcome of the business. The average engineer working in that company is assumed to not have su…

I disagree on your last statement. I think that if a reasonable base salary were provided and profit sharing was done well and was truly equitable (i.e. not more than an order of magnitude different from 1/n of profit for n employees) then it could be quite attractive. It's all about trust and track-record.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#144

Post by mbreese » Tue, Jun 04, 2013, 7:20 PM UTC

unoti wrote: post #134

jlarocco wrote: post #60

Earlier quoted context omitted.

I'm guessing it's a little exaggerated... I live in the Denver/Boulder area, and I'm 90% confident that if I were laid off today I could have an approximately equal job in less than 3 months. I wouldn't say I have a new job lined up, but somebody could spin it that way. Also, I'd imagine people from a well known company like OMGPOP, in a big tech hub like SF or NYC, would have an easier time finding something new.

I used to live in Denver, and today I live in San Francisco. I can tell you, this story is not an exaggeration. When I was in Denver I did PL/SQL and C# types of things. Today I do Python and Javascript and basically standard technology things. I can tell you, there's a vast difference in Denver vs San Franscisco. You drive down the streets of San Francisco and you see signs saying, "Developers! We freakin love you,…

A couple of weeks ago I saw a billboard truck driving in Redwood City that was trying to get developers to consider working for Walmart.com. If you like big data... they have it.

It's a surreal place.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#145

Post by sdoowpilihp » Tue, Jun 04, 2013, 7:21 PM UTC

Freestyler_3 wrote: post #130

sdoowpilihp wrote: post #32

Earlier quoted context omitted.

The inconveniences are by design. The bugs are due to aggressive deadlines.

With 3000 people... that amazes me.

only a percentage of those people are engineers working on the client facing component (i.e. the game). More over, people consistently underestimate the complexity of building games, including the PM's in charge of getting the game out the door.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#146

Post by sheri » Tue, Jun 04, 2013, 7:29 PM UTC

petercooper wrote: post #43

crimsonzagar wrote: post #3

Is there anywhere a list of investors who called Zynga a "big deal" two-three years earlier?

We could just look at the investors who put significant sums in. Crunchbase has a list: http://www.crunchbase.com/company/zynga To be fair to them all, it reads like a who's who of the VC world from Brad Feld and Reid Hoffman through to Andreessen Horowitz, Softbank, and Union Square Ventures. I'm not sure any blame could be laid at their doors though, it was an exciting and high growth company and that's exactly wha…

A16Z gets touted as an order of magnitude smarter than the rest of the VC's out there, and my opinion of them has dropped after looking at their portfolio's recent performance. Yes, they have made lots of money, but that firm specifically was supposed to be about recognizing long term opportunities, and not just following growth and fads. Of course, its always easy to comment with the benefit of hindsight.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#147

Post by trotsky » Tue, Jun 04, 2013, 7:30 PM UTC

pavs wrote: post #12

I want to know what kind of thought process goes on company/individual's mind when they decide to do an acquisition like this, for $200M, which doesn't make enough money to justify it. You would think when you are throwing around that kind of money, they would do some rudimentary research? How much money was omgpop making at the time of the acquisition?

I haven't checked, but I assume the OMGPOP deal was stock. If your CEO was selling stock like mad and your stock is currently worth a fraction of what it was valued at when you did the deal that is a strong piece of evidence that you never believed you "spent" $200MM. If you recast it as a $40MM deal (based on current valuations, iirc) it puts it in a different light. The instagram deal was similarly artificially inflated.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#148

Post by carterschonwald » Tue, Jun 04, 2013, 7:30 PM UTC

potatolicious wrote: post #122

Aco- wrote: post #116

Earlier quoted context omitted.

With leadership responsibilities. Say a medium-to-small sized team, less than 10 people. One could say the position would be either; Senior Software Engineer or Technical Lead.

Making a lot of assumptions about the job and yourself, obviously, but that strikes me as a $150K position, if not higher. I've seen a few roles like that go for $180-200K total comp in the NYC area. It may a little bit of negotiation finesse (or more realistically, holding several offers in hand at once and willing to play them against each other).

sounds about right, also really really depends on the scope of the role, size of the org, and what kinds of specialist/domain knowledge related to the tech/biz are needed.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#149

Post by smrtinsert » Tue, Jun 04, 2013, 7:34 PM UTC

socialist_coder wrote: post #33

smrtinsert wrote: post #20

That developer who opted out is looking like a genius right now.

not really. he lost out on severance.

who cares, being ultimately right trumps all. I would hire him over Dan Porter any day.

Re: Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M

#150

Post by smrtinsert » Tue, Jun 04, 2013, 7:40 PM UTC

CyberDroiD wrote: post #139

Lots of drama about this! I guess that goes along with being high profile.

I lost respect for them when they began blatantly duplicating the hard work and ingenuity of indie developers just to make a few extra bucks. Why bother thinking when someone else has done it for them?

I uninstalled all Zynga games and blocked all FB entries as soon as I found out this was a common pattern for them. I also shared that knowledge with my largely non-techie social network so they could see the kind of company they were supporting.