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Tested by Mobile, Zynga Aims to Rebuild Its Network

February 6, 2013 by Leave a Comment

SAN FRANCISCO — Zynga has been on a monumental losing streak. Hits have been rare, profits nonexistent and crucial employees are fleeing.

The story of the company, which developed the notion of social gaming and persuaded tens of millions of people to try it out on Facebook, illustrates how suddenly the fortunes of hot Internet companies can shift. Two years ago, as Zynga was first being talked about for a public offering, it was said to be worth $20 billion.

By the time the offering took place, a little over a year ago, it was for about $7 billion. And Zynga has spent most of the time since then sliding downhill. The value of the company Tuesday, as it released mediocre but nevertheless better-than-expected fourth-quarter results, was about $2 billion.

In the next few months, Zynga faces a critical test that will determine if even that sum is excessive: can it successfully put its most popular Web games, starting with Farmville, on mobile devices?

“Do I wish that we would have gone all-in on mobile and made a bigger commitment to it earlier?” Mark Pincus, Zynga’s founder and chief executive, said in an interview after the earnings release. “Yes.”

Mr. Pincus called 2013 “a year of investment and transition.”

“While we are excited about the long-term growth opportunity on mobile, and the opportunity to make games even more accessible to people in more parts of their day, we need to build a compelling network around it,” he said.

That is because social gaming on mobile is not necessarily social.

“It’s kind of ironic, isn’t it?” Mr. Pincus said. “You’re holding a phone, an inherently social device. Yet the experience we have is a more fragmented one.”

The pain accompanying Zynga’s transition to mobile was evident in the earnings report. Revenue was $311 million, flat with the year before. Daily users of the games were down 6 percent from the third quarter, a clear measure of flagging interest. More casual users dropped as well.

Earnings per share were a penny, better than the 3-cent loss that analysts had been expecting on an adjusted basis. And Zynga’s cash hoard of $1.65 billion was untouched from the third quarter.

For the full year, revenue was $1.28 billion, up 12 percent from 2011. Not exactly what you would expect from a growth company.

Nor were its immediate prospects cheerful. Zynga warned that it would release few new games in the first quarter and that its revenue would drop from 2012.

Weak as the results were, however, they were not as bad as some feared. Zynga shares immediately rose in after-hours trading by 7 percent. In regular trading they were also up 7 percent to $2.74. That jump was fueled by an analyst upgrade from Merrill Lynch, which said the stock was so beaten down that it now accurately reflected the company’s prospects.

Many online stock sites, by contrast, have been portraying the company as going the way of Pets.com or Myspace. “Zynga’s Earnings May Reveal Its Impending Demise” read the headline at one.

Michael Pachter, a managing director of Wedbush Securities, wrote in an e-mail that Zynga management was “definitely saying the right things, now all they have to do is execute.”

Aside from Mr. Pincus, it has been a team in flux. Just last week, Zynga suffered another defection when its chief game designer, Brian Reynolds, quit, saying he wanted to experiment “more than might be appropriate for a publicly traded company.”

As recently as two years ago, Zynga had only 20 people working on mobile issues. Then the team ballooned into the hundreds. In the last few months, the team members have integrated into each game. Zynga has 298 million monthly active users, 72 million of them using mobile devices to play games like Words With Friends and Zynga Poker.

The central issue overshadowing even the mobile transition is whether Zynga became successful only because it was in the right place at the right time, a condition also known as dumb luck. Zynga’s rise was inseparable from Facebook’s, which gave it preferential treatment. That era is over. In March, Facebook will be free to develop its own games.

There are other perils for Zynga, plenty of them. Analysts have been pointing to the rise of King.com’s games, including Candy Crush, which makes the latest version of FarmVille look as complicated as advanced physics.

“Who thought crushing candy would have been popular?” said Brian Blau, a Gartner analyst.

King.com is promoting itself as a new, improved Zynga, which underscores the volatile nature of the business. “This is a hits-driven industry, and Zynga could not sustain their hits,” Mr. Blau said. “Game players are fickle.”

Zynga learned that lesson with Draw Something, which it acquired last March for $180 million at the height of its popularity.

Draw Something had about 15 million daily users. Before the ink on the purchase was dry, nearly a third of them had departed for a newer craze.

Zynga wrote down over half the purchase price even as Draw Something’s audience continued to dwindle. A Zynga spokeswoman declined to say Tuesday how many players it now had.

“The one thing that hasn’t changed is our focus on social,” Mr. Pincus said. “With every platform change over the years, we’ve bet the company on social and accessible.”

Article source: http://www.nytimes.com/2013/02/06/technology/weak-earnings-report-for-zynga-but-stock-rises.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Bucks Blog: Reflections on Self-Improvement

November 8, 2011 by Leave a Comment

My Shortcuts column on Saturday, “Pursuing Self-Improvement, at the Risk of Self- Acceptance,” looked at the notion, embedded in American culture, that we should constantly strive to make ourselves better. I talked to several experts who noted that there are limits to self-improvement, including one who found that mothers who were constantly striving to be the best at everything were often unhappier than those who accepted being good enough.

The subject seems to have resonated with some readers. Here is a sampling of their comments:

Referring to my theoretical desire to have a nice vegetable garden — but my failure to actually plant one — Randi Cecchine of Manhattan wrote:

“Even better than having your own vegetable garden, that you don’t actually want to attend to, would be finding someone who really is desperate to garden but doesn’t have the space, who would take care of your garden in exchange for some produce, or in exchange for something that you do for him/her.

I think part of the striving that you mention in your great piece is the lack of community we feel — a feeling that we have to do everything ourselves. That’s what I think is most beautiful about Occupy Wall Street, is that it allows people to be in a space of sharing and giving. The more we stress about money — too much, or not enough — the less we seem to be able to really work and think together.”

Allan Paulvin didn’t like the tone of the whole piece: “My e-mail is not intended to insult your contributors, but what a bunch of hooey! Self Help/Improvement is not only accomplished through courses and seminars. It’s not always to make the self-helped feel superior or good enough. It is intended help an individual feel good about themselves, who they are and what they hope to become. Those of us who have participated in helping ourselves don’t need to feel superior, we need to feel a sense of self, a good feeling about what we can do something about! People want to feel that their time spent here on earth or any other planet is worthwhile.”

The article made the Rev. Trevor Nicholls, president of Cardinal Spellman High School in the Bronx, reflect on what we really mean by self-improvement. He wrote in part:

“I read your article in last Saturday’s New York Times with considerable interest since it touches upon my own ministry as a priest and has, although you may not be aware of it, considerable theological and spiritual dimensions.

The question which your article doesn’t really address is what exactly we mean by ‘self-improvement.’ Watching less television, reading more books, cultivating a vegetable garden or taking up wood-carving will mean that we will (perhaps) make better use of time and acquire new skills but leave the fundamental question unanswered.

To begin to provide the answer, we need a true vision of reality — something which the vast majority of folk simply do not possess — and in particular, a true vision of ourselves, what is possible and what is not. Obviously, my own perspective is Catholic and I see human persons as being created in the image and likeness of God, i.e., with a mind and a will and, unlike every other creature on earth, able to transcend themselves, to become more than they are at any particular moment. We are not bound by our nature.

This ‘becoming more,’ however, is essentially moral; if it is not first and foremost that, then our self-improvement won’t take us very far, whatever skills and abilities we may acquire — though I do not denigrate such in themselves.

On a more mundane but no less important level, one key to any form of self-improvement is — and you hint at this — to be present to what one is doing at any particular time. Many people give the impression that whatever they’re presently doing, their minds are already onto the next thing. All of us, priests certainly included, would achieve much more if we could crack that one.”

Gene Cassidy of Framingham, Mass., commented on the idea in the column that sometimes good enough is better than never enough: “How timely amid the flood of encomiums to Steve Jobs that you would remind us that perfection is the enemy of the good. Your column was very funny. It was a few minutes’ reading with a big impact.”

Richard Plepler said the article “reminded me of one of my favorite quotes from Robert Lewis Stevenson, ‘To travel hopefully is better than to arrive.’”

And Fritz Ziegler of Covington, La., relayed the following conundrum when trying to avoid perfectionism: “As an inveterate self-helper teased by my wife, kids and others about my affectation, and as a perfectionist par excellence, I agree with most of what you’ve written, well all of it, but wished you had been able to get to this point you’ve probably already thought of: Acceptance includes accepting that sometimes we act in perfectionistic ways about self-improvement, i.e., accepting that we aren’t accepting enough. This can also be said as: Complaining about not being accepting enough is just another version of perfectionism. It’s all so recursive! I go round and round like this all the time, and I accept that about myself after all these years.”

Article source: http://feeds.nytimes.com/click.phdo?i=962f4e0d61ffa6ab7df9de218ac52c61

Filed Under: Your Money Tagged With: , ,

Wealth Matters: Making a Portfolio, and More, at Money Camp

July 2, 2011 by Leave a Comment

The subject may not seem obvious for a camp. After all, with many adults in America lacking well-developed money skills, could their children get much out of these camps? How are teenagers, and much younger children at some camps, being taught money skills that many of their parents seem to struggle with? And do they go home with any new insights?

The very notion of these camps may seem like another attempt to overschedule children, but the information they aim to impart is clearly needed. According to the National Endowment for Financial Education, most teachers do not feel equipped to teach students about personal finance, even when states require it. A study published in 2009 by two researchers at the University of Wisconsin, Madison, called “Teachers’ Background and Capacity to Teach Personal Finance,” found that 80 percent of states had some sort of requirement for personal financial education, but that most teachers did not feel qualified to teach a financial literacy course.

Of course, no camp is going to be a quick fix for financial illiteracy. Just as band camp does not turn every child into a concert musician, money camp is not going to create financial wizards.

So what do children go home with? Better yet, do these camps have any lasting effect? And really, are they any fun?

CAMP GOALS The debate about the usefulness of these camps is as divided as anything in education.

Lewis Mandell, a professor of finance and dean emeritus at the State University of New York, Buffalo, who has done research on financial literacy for children, said he had grown discouraged by attempts to make children more financially literate. He said he thought that many of the programs were too positive and argued that negative emotional associations around losing money would be more memorable.

He suggested, jokingly, that these camps should put on a theatrical show called “Foreclosure: The Musical” if they really want to teach children about money.

“It would show them just how some wrong decisions you make that seemed like great ideas worked out really badly,” he said. “The literature shows that kids may not remember it, but when they become adults and get to practice a range of financial activities, it comes back.”

Melinda Little, director of Camp Start-Up, which will be held in Wilbraham, Mass., this summer, was amused by Mr. Mandell’s idea but disagreed that negative experiences about money were more long-lasting.

“There are times when the kids get discouraged somewhere along the way,” she said, but what is important is to overcome that discouragement.

She said the camp she runs spends a third of the time teaching about investments with a mock portfolio, and two-thirds on creating a business plan.

Still, what type of parents ship their children off to money camp? The truth is, many parents struggle with the idea because they figure their children will not like money camp or will see it as punishment.

Elisabeth Donati, the owner of Camp Millionaire in Santa Barbara, Calif., said she added a weekend camp in 2009 because that was more attractive to many parents than a weeklong one.

“It seems parents don’t have the backbones they used to,” she said. “They think it’s a great idea, but what happens is, if they go to a kid and say, ‘What about taking a five-day or two-day camp,’ the two-day camp is an easier sell. Kids think summer is meant for fun.”

She said the camp was structured around a series of games that teach children skills ranging from earning, saving and how best to spend money, to the risks of doing too much or too little with an investment portfolio.

Of course, many wealthy families have long realized that their children needed to learn about money whether they wanted to or not.

Leslie Powell, head of next-generation development at Citi Private Bank, said that for the last 10 years the bank had been running seminars for people in their 20s who are the children of clients with more than $100 million. The weeklong retreats focus on investing, running businesses and giving money to charity, but they also employ some of the scare tactics Mr. Mandell favored.

Article source: http://feeds.nytimes.com/click.phdo?i=ac7b51214cff3d51feb5f02231f99442

Filed Under: Business News Tagged With: , ,

Real Estate Remains in Distress as U.S. Home Prices Fall Again

April 27, 2011 by Leave a Comment

The Standard Poor’s Case-Shiller Home Price Index for 20 metropolitan areas dropped 1.1 percent from January, S. P. said Tuesday.

By the barest of margins, the index failed to plumb new depths. It is now at 139.27, essentially the same as the low of 139.26 that it reached in April 2009.

Housing prices are falling even though banks have been pulling back on foreclosures, which generally drive neighborhood prices down. They are falling despite low interest rates, which make houses more affordable. And they are falling even though they have already dropped by a third from their heady peaks in mid-decade.

“It looks pretty bad,” the chairman of the S. P. index committee, David M. Blitzer, said. “Could it get a little worse? Sure. Could it get a whole lot worse, so everywhere looks the way Detroit looks now? To get there, you’d have to paint a really, really grim picture.”

Another devastating recession, perhaps? Potential buyers scorning en masse the notion of ownership? Mr. Blitzer does not see those happening.

This will be small comfort for anyone trying to sell in this environment, or merely wondering where the money for retirement will come from. Washington was the only Case-Shiller city where prices went up over the last year. But even it dropped slightly in February. Ten of the cities in the index, including Atlanta, Charlotte, Chicago, New York and Seattle, hit a low for the cycle during the month. That was one fewer than January.

Detroit was the exception. Why Detroit, by far the worst housing market in the country, rose when everywhere else was sliding is a statistical mystery.

For the 20 cities, prices are down 3.3 percent in the last 12 months. That is not much compared to the precipitous drops of 2008 and 2009 but some see the declines accelerating.

Capital Economics, a forecasting group in Toronto, previously said prices would drop about 5 percent this year. “That forecast is looking increasingly realistic,” Paul Dales, a senior United States economist, wrote in a note to clients.

Another 5 percent decline in the index would take it back to about 133. While that equates to a 33 percent gain for homeowners since 2000, it is just about nothing after inflation is factored in. And those would be the lucky ones, who bought long ago.

Most economists think the market is in transition to something resembling stability, although few expect genuine price increases anytime soon.

“Things are moving in the direction of getting better,” said Eric Fox, vice president for statistical and economic modeling for the consultant Veros.

Among the helpful trends: The oversupply of houses that characterized the early stages of the downturn is gradually being absorbed, the employment situation is marginally better and interest rates are not increasing.

Veros is forecasting that stronger markets, including Pittsburgh, Buffalo and Shreveport, La., will increase 2 to 3 percent over the next year, while the weakest markets will fall about 5 percent. Weak markets include Las Vegas, Orlando, Fla., and Portland, Ore.

“Foreclosures are the big unknown,” Mr. Fox said. “If there is a huge influx, that can have an effect.”

The Case-Shiller index, which measures repeat sales of houses, is an imperfect measure of the real estate market. The index is a three-month moving average, so the February results include December and January.

Other indexes also describe a troubled market, however. The Federal Housing Finance Agency’s index, which is calculated using the purchase prices of houses with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac, the government loan repositories, is declining at a faster rate than previously.

The F.H.F.A. index fell 1.6 percent in February from the previous month, the agency said last week, while the January decline was revised up to 1 percent. In the last year, the index has fallen nearly 6 percent.

If some troubled owners are beginning to reject the notion of homeownership, a few renters are sensing this might be their moment.

“Talking about how the recession is bad for home builders and sellers ignores an entire segment of the country for whom this is a blessing,” said Abby Eagye, 41.

A writer, skiing instructor and emergency medical worker, Ms. Eagye lives in Aspen, Colo., where the wealthy roam. But the crash has yielded some surprising deals. Ms. Eagye is pulling together a down payment.

“I missed the real estate window once and I don’t care to do it again,” she said. “I have no false dreams of flipping homes to make money. I just want the safety of owning my own home.”

Article source: http://feeds.nytimes.com/click.phdo?i=93fa45218da74a5b472c9e331ba406e6

Filed Under: Business News Tagged With: , ,