Counterparties: The unbearable lightness of silicon beings
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If you build a company on something lighter-than-air, will it inevitably float back to earth? Kara Swisher reported yesterday that Zynga is laying off 520 employees and closing its LA and New York offices. The companyâ€™s core business — selling desktop games for Facebook — is declining, and the company says it is focusing on the faster-growing but less profitable mobile market. Zyngaâ€™s stock is now down 70% since it went public in December 2011.
Two years ago, Zynga was declared the winner of the â€śgreat social game Gold Rushâ€ť. Better than anyone, it figured how to make money out of the inordinate amount of time wasted on Facebook. It never was, and wonâ€™t ever be, a â€śfrighteningly ambitious startupâ€ť. Despite being a big financial success, Zynga always had limited ambition.
Nick Bilton worries that too many startups are tackling small problems, aimed at the foundersâ€™ â€śtechnophile friends rather than the publicâ€ť. His example: Twist, an app that uses geolocation technology to tell people exactly how late you are running. Itâ€™s just one product among many of companies started to find â€śsolutions for mundane problemsâ€ť.
Many of these companies are the product of the new Silicon Valley that George Packer recently cataloged in the New Yorker. Examining Sean Parkerâ€™s $10 million eco-unfriendly wedding, Alexis Madrigal summarizes this ethos as â€śdream big, privatize the previously public, pay no attention to the rules, build recklessly, enjoy shamelessly, invoke magic, and then pay everybody offâ€ť.
The short seller Carson Block, the founder of research firm Muddy Waters, has decided now is the time to switch some of his focus from fraudulent Chinese firms to technology â€śpretenders.â€ť — Ben Walsh
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