This research is being submitted on June 3, 2015, for Charles Dupee’s B273/GEB2444 Section 01 Internet Business Models and E-Commerce class.
Zynga began with Mark Pincus failing and being fired from all his jobs, so the only option was for him was to become an entrepreneur. He teamed up with his friend Hoffman the founder of LinkedIn and they invested in Facebook. July 2007 Pincus changed the name of his current company to Zynga, which was the name of his late bulldog. He did not believe in letting others come in to run his company, so he decided to run it himself. He began on Myspace first, but realized Facebook was going to be much bigger. The company released their first game “poker night” Sept. 2007, and by April 2009 it had over forty million users and was the top game on Facebook. However, the profit margins were not that big.
The only profit was in the ad spots paid during the game play though, so they had to find a way to increase profit. “In March 2008 Zynga added a way to sell poker chips via “lead generation,” where a user could get chips if they participated in a revenue-generating activity for Zynga, such as accepting an offer to sign up for something” (Takahashi, 2011). As they continued to launch new games they gained more and more investors keeping them going strong. With their unique ideas that gaming should be accessible to everyone, anywhere, anytime, data driven and free they were able to move even faster within Facebook. Their developers had to keep a close eye on Facebook and redo their work every three months or sooner. “In May 2009, Picus said Web 1.0 was about aggregating audiences, or getting page views, and banner ads and e-commerce. Web 2.0 was the search economy which enabled many more businesses to participate through search engine optimization. Web 3.0 was about monetizing a massive audience through users paying for virtual goods” (Takahashi, 2011). This was a revolutionary change in Zynga’s business model and their apps were free but users could purchase virtual goods with real money. Virtual goods would soon become ninety-five percent of Zynga’s revenue. One of Zynga’s missed opportunities was the transition to mobile phones and tablets. There products on Facebook were no longer appealing because most people began accessing Facebook from their phones and their games were not compatible. Not to mention mobile phone apps and games available. Zynga had to completely rethink the way games were made and In order to do this they either need to hire someone, or learn to change your old mindset to learn new things. If I were the CEO I would have found and hired someone to make the games on Facebook compatible with the new technology just as they took time to update the apps every three months on Facebook. I would also create games specifically for mobile phones and tablets, so as not to only market to Facebook. “Clearly, the fastest growing gaming venue is the mobile smartphone market, which grew 26% in 2012” (Laudon & Guercio, 2014). The transition to mobile phones and tablets had the greatest opportunity for growth and may have cost Zynga millions if not billions of dollars. Another opportunity missed has been Zynga’s lack of top rated games produced. Since their decline they have yet to come up with a catchy game to get the attention of customers. The catchiest games these days are ones like candy