Zynga purchased the gaming company OMGPOP last year for a massive $200 million. Today, Zynga has officially shut down the OMGPOP office. Employees arrived at work this morning to a shuttered office. While many former OMGPOP staffers weren't shocked, Zynga and OMGPOP have have clashes from the start.
These clashes were so notoriously bad that Zynga proves to be a great reminder of what not to do. Not only did Zynga spend millions just last year on a company that no longer exists, but Zynga's takeover was anything other than smooth.
Zynga : A Not So Velvet Takeover
What happened with Zynga and OMGPOP? From the start, it was assumed that Zynga only purchased OMGPOP in order to thrash the company that was taking over the gaming world. This didn't sit so well with OMGPOP developers that had been working on the company's amazing games for months.
Then there was that small media hiccup: former OMGPOP CEO left the company after making a public statement that was taken out of context – the statement suggested that Zynga copies other games, in case you are wondering. Then there's what happened today. Here's one tweet from a former OMGPOP employee that pretty much sums it up:
“I learned via Facebook I was laid off today and @OMGPOP office is closed. Thanks @zynga for again reminding me how not to operate a business.”
Zynga: What You Can Learn
Before purchasing a company's entire corporate culture (intact and with current employees), it is VITAL to make sure that your existing company gels with that purchased company. More often than not, these types of takeovers aren't hostile at all. Sometimes, though, two companies that could never work together are merged, and one of those companies is bound to end up shut down or internal struggles will make working hard for all.
It's hard to say whether or not Zynga handled the surprise shut down with grace. It has been estimated by INC. Magazine that Zynga was losing “…$409,000 per day on the purchase,” but that doesn't mean that a shut down should happen the way that this one did.
According to former OMGPOP employees, this shut down was a complete shock (probably not the best way to go if you plan to make some major cutbacks).
What's the number one lesson here? With purchasing power comes responsibility. If you're in the startup phase of your company, you may not be there quite yet – heck, you might still be working on finding that cheap hosting site.
But, one day, you might be in the position to purchase another company. When that day comes, think back to how Zynga handled this one, and remember that takeovers don't always go according to million dollar plans.
Questions? Comments? Need helping finding a cheap hosting with domain site? Leave a message below — we respond!