The quick rise and fall of Zynga
Zynga started the year off right, having just raised $1 billion in its IPO, but a spendy purchase of OMGPOP, poor earnings, and an extreme financial dependence on Facebook mean it's ending the year on a down note.
Wall Street and the gaming industry watched as Zynga, the social-gaming giant just starting its life as a public company, fell from glory this year. Although it's still the top dog in social gaming -- it boasts 300 million active players for its games, and its products remain Facebook's top games -- Zynga has had a year full of mistakes and misfortunes. The company spent $200 million of the $1 billion it made from its IPO buying game maker OMGPOP for its popular Draw Something game, only to watch the game's user numbers drop dramatically almost as soon as the ink dried on the deal. It's been accused of stealing ideas and insider trading. Its overall growth slowed down in the last year and, like everyone else, it's had difficulty making money off the growing base of mobile customers, leaving Zynga with a disappointing earnings report in the third quarter.
As a result, its stock price sunk rapidly, more than a dozen top executives fled the company, it had to lay off employees and close studios, and Facebook took away its preferential treatment. Zynga's New Year resolution? A new focus. The company's been working hard to recast itself as a multi-platform gaming company and not just a game developer that's dependent on Facebook.
For more on this story, see Donna Tam's story, "Where does Zynga go from here?"