Lesson from OMGPOP shut-down: Don’t get acquired by Zynga?

I just heard the unfortunate news that OMGPOP no longer exists. Zynga shut it down officially, and strangely it seems like some OMGPOP employees found out about their layoff via Facebook. What happened between these 2 companies?

I used to be a huge fan of OMGPOP’s Draw Something. It was a fun, social game I used to enjoy with my friends. Then one day, I read about Zynga’s acquisition of OMGPOP, and this quickly made me lose interest in the game and switch to another similar game. It’s not that I don’t like Zynga but that I thought OMGPOP had so much potential but they lost it by getting acquired by a big, established company.

Zynga has had a bad reputation for a while. A company with a bad reputation never survives long. When talented, creative people start leaving, or when a company lays off talented people, that’s often a bad sign.

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What Zynga is doing wrong is as follows:

1. Zynga doesn’t have a respect for the company they acquired.

They acquired a creative, popular game company and they shut it down because they think it’s a “mistake”? Rather than trying to resolve conflicts and use OMGPOP’s talents to develop an innovative game, Zynga decides that it will just shut the whole thing down and lay off all of its employees. From now on, no start-ups are going to be “excited” about getting acquired by Zynga.

2. Zynga is known to copy games from others. A big no-no.

Talented people would no longer want to work for Zynga. Would you want to work for an established, popular company that copies games from others?

3. Zynga made an acquisition in a hurry.

Zynga obviously wanted to acquire OMGPOP because its game went viral and very popular internationally. Post-acquisition culture clash is actually quite common, but Zynga should have been more careful about the acquisition. Both companies and their management teams need to trust each other and share their visions.  It seems that neither were ready for M&A.

If Zynga wants to fix its damaged reputation and become a beloved, innovative company again, instead of acquiring start-ups hastily, hire some killer talents and let them freely create an innovative game that is not copied nor similar to other games. The management should be nice to all of your employees, and benchmark other company’s creative culture like Facebook’s if necessary.

Top 3 Gainers from Yahoo’s Tumblr Acquisition

Top 3 Gainers from Yahoo’s Tumblr Acquisition


Yahoo surprised us by announcing a billion dollar acquisition of Tumblr this past week. There’s been a lot of debate about whether Tumblr’s competitors can benefit from this acquisition since Yahoo is likely to “screw up” Tumblr one way or the other. Will Tumblr eventually lose its unique identity? If so, which company will benefit from it?

 


To start with, we need information about Tumblr’s target users. Tumblr has been very popular among teenagers. You can never go wrong once you get those teenagers as your customers. They spread words virally if they find something “cool”, get addicted to things more easily, and spend a lot of time creating, decorating, and reblogging contents! Teens who don’t want to share anything on Facebook have been expressing their creativity and voice on Tumblr. It’s like their “secret” blog where they can be anyone they want to be and say whatever they want to say. It’s a perfect platform to do so because it’s anonymous, your friends or parents wouldn’t know about it, and you’re free to post anything you want (even porn!). Other target users include small businesses, creative artists, and college students, but they don’t create and reblog as often. Teens have indubitably made Tumblr popular and go viral.


Since Yahoo announced its acquisition of Tumblr, many Tumblr users have complained that they will “ruin” Tumblr and have even threatened that they will leave to use other platforms like WordPress. Will a lot of users leave Tumblr in the future? What will happen then? 


Here’s a list of top 3 gainers from Yahoo’s Tumblr Acquisition. (This is solely based on my opinion, so feel free to share your thoughts by leaving comments!)


1. WordPress

WordPress.com is a popular blog web hosting service provider owned by Automattic. Since Yahoo’s announcement of acquisition, many people migrated their blog from Tumblr to WordPress. Why? Because it’s super-easy to import your contents from Tumblr! I personally imported all of my contents to WordPress and it took about 15 minutes to migrate 2000 contents that I had on Tumblr. Not bad, huh? (FYI, my WP link is https://gingerbunnyme.wordpress.comI can definitely see more people doing the same if something bad happens to Tumblr (i.e., too much advertising, other users leaving, not many great contents..). If their most popular users are leaving, their followers are likely to follow as well.

 



2. Pinterest


It’s interesting to see whether and how Pinterest would benefit from Yahoo’s Tumblr acquisition. Pinterest’s target users are quite different from Tumblr’s: it’s popular among women, rich, adults under 50, with some college education (Source: Pew Research Center)


Once Tumblr users migrate to Pinterest and start “pinning” like crazy, Pinterest’s demographics and its contents will change significantly. What will happen if Pinterest gets both teenagers and older, richer women? Can it be the most popular social media in the U.S., surpassing Twitter or Facebook?

 

 


3. Instagram


Instagram is very similar to Tumblr in many aspects. They both heavily rely on photos, are mobile-friendly, and their target users are also similar as Instagram is also popular among teens and people in their 20s. Instagram was also acquired by Facebook, so it’s interesting to see whether Instagram will be able to allure some Tumblr users after Yahoo’s acquisition. (Some Instagram users were angry about Facebook’s acquisition, but many decided to stay because there are no other great alternatives.)


The main difference between Instagram and Tumblr is that Instagram’s contents tend to be much more “personal” than Tumblr’s. I see a lot of photos of celebrities, cute people, fashion, food, art, and funny, gif on Tumblr, whereas I see a lot of “real” contents on Instagram like photos of themselves and their friends and family. Because their contents are quite different, it’s more likely that Tumblr users will start pinning on Pinterest than posting on Instagram. 


Do you use Tumblr? Are you going to migrate to another platform or are you going to stay? To which platform will you move? Please share your opinions by leaving comments!