Counterparties: The unbearable lightness of silicon beings

By Ben Walsh
June 4, 2013

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.

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 company’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. Zynga’s stock is now down 70% since it went public in December 2011.

Two years ago, Zynga was declared the winner of the “great social game Gold Rush”. Better than anyone, it figured how to make money out of the inordinate amount of time wasted on Facebook. It never was, and won’t ever be, a “frighteningly ambitious startup”. 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 founders’ “technophile friends rather than the public”. His example: Twist, an app that uses geolocation technology to tell people exactly how late you are running. It’s just one product among many of companies started to find “solutions for mundane problems”.

Many of these companies are the product of the new Silicon Valley that George Packer recently cataloged in the New Yorker. Examining Sean Parker’s $10 million eco-unfriendly wedding, Alexis Madrigal summarizes this ethos as “dream big, privatize the previously public, pay no attention to the rules, build recklessly, enjoy shamelessly, invoke magic, and then pay everybody off”.

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 “pretenders.” — Ben Walsh

On to today’s links:

Facebook
The myriad reasons why Wall Street generally hates Facebook – Wired

World’s Smallest Violins
Wall Street frets over losing SAC’s “golden little crumbs” - Peter Lattman

Regulators
US financial regulators vote to give themselves the power to regulate financial companies – WSJ

Wonks
The state of the US economy, in four data points – Jared Bernstein

Felix
Prosecute the patent trolls! – Reuters
The full White House fact sheet on patent trolls – White House

New Normal
Why Americans work so much: single mothers face an huge economic burden – Derek Thompson

Progress
Three years later, only 38% of Dodd-Frank’s 398 rules have been finalized - USA Today

Pivots
Anonymous is about to get into the news business – Bloomberg Businessweek

Cartography
The geographic distribution of Starbucks vs Dunkin Donuts – Boston Globe

Comebacks
AIG and GM are back! (in the S&P 500) – Reuters

Healthcare
Reminder: The Cadillac tax is a great idea – Charles Lane

It’s Academic
Study suggests partisans might not believe partisan lies – Dylan Matthews

Literary
“A Wall Street bildungsroman” – Peter Lattman

Data Points
“So, are nearly a quarter of European young people unemployed? No. Fewer than 10% are” – FT
GM’s Cadillac posts biggest 5-month gain since disco era – Bloomberg

And, of course, there are many more links at Counterparties.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/