Readers just must know my views on Zynga by now. Zynga a passing fad was my most recent post on the subject. The Money for nothing but the chicks ain’t free company behind best-sellers like Farmville is now in some pretty serious trouble. Zynga shares fell yet another 14% on Friday to just $3. Zynga IPOed at $10 in Dec 11 and were trading at $15 in March 12. Q2 revenues were down 31% yoy, users were down 39% and a loss of $16m was reported. But, worst of all, the outlook talked of ‘hard times ahead’. Zynga cancelled its US ‘real money’ gambling plans and will now lay off 520 staff.
We are in a market which has quite new dynamics. New ideas/new companies can be created quickly with relatively low cost of entry. They can be disruptive very quickly. Their users can rise extremely fast – and investors pile in as a result. But, of course, they can go into reverse even faster.
With approaching 50 years experience in the technology sector, I could have written that paragraph at any time in my so-called career. But the pace of that change has accelerated out of all recognistion. Fundamental change took 20+ years in the 60s and 70s. 10+ years in the 80s and 90s. 5+ years in the 2000s and I now think we are getting closer to 2.5 years now. Well that’s how long it took for tablets (iPads) to completely revolutionise the hardware market. Samsung (see its latest warnings) had less time than that to make any decent money from its Galaxy smartphones – before they became commodities and profit margins dived.
Extrapolation might indicate that you will have about a year to exploit a market by the end of the decade. And that should be really scary for many.