Zynga Inc (ZNGA)

[COO2002COO]

Zynga can be considered the single greatest social media failure among recent IPOs. The leading provider of games on Facebook has been unable to match the success of Farmville, its first hit. Facebook also ended its relationship with the gaming company in 2012, effectively limiting Zynga’s access to the social network’s 1 billion users and making it harder for the company to promote its games.

The company moved slowly into the mobile platform, and after it failed to create big hits of its own, it acquired popular titles such as Draw Something and Words With Friends. But new rivals like King Digital, maker of popular mobile game Candy Crush, continue to crowd the market. Similarly, traditional game companies like Electronic Arts have also begun to migrate their titles to mobile devices, challenging the social gaming company’s position.

The question is whether Zynga has enough demand for its products to support it as an independent public company. The company reported daily active users in the first quarter of 2014 were down nearly 50% to 28 million, compared to 52 million in the first quarter of 2013. Zynga lost $61 million in the first quarter of the year, against a profit of $4 million in the same period a year ago. Since early March, Zynga stock has dropped 45%, which while indicative of its troubles, also makes it a more attractive takeover target.


http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/3/