The UpStream (Page 211)

Don Mattrick Lays Out 90-Day Plan as New CEO of Zynga

posted Sunday Jul 28, 2013 by Nicholas DiMeo

Don Mattrick Lays Out 90-Day Plan as New CEO of Zynga

Several things have happened recently with Zynga. First, the company has undergone a massive restructuring, including several rounds of layoffs and full-on studio closures by the foresight of COO David Ko. Then, the once-reigning social gaming champion was dethroned by new gaming mogul, King. And just last week, Don Mattrick left Microsoft to take over as CEO of Zynga, in hopes to change things around for the better. Many wondered what and how Mattrick would return Zynga back to its glory and the good news is that, this week, the Don laid out his 90-day plan in a statement and in an interview.

Mattrick has really come to the company to take charge, and here's how he says he will do it:

So here's what I'm focused on in the next 90 days. (I want to get) under the hood to evaluate every aspect of our business; conduct top-to-bottom business reviews and work with our leaders to calibrate against the market opportunity and to go after it with a real sense of urgency.

Obviously a lot of that needs some clarification as to what exactly it means. Mattrick continued,

I'll spend time heads-down with our team and focus on improving our product quality; how we're deploying people at all levels of the company, and I'm also going to use the next 90 days to assess and reset our product pipeline. Zynga's still a young company, and we have the capability to break some bad habits and get back to some good fundamentals. And while my approach in the first few weeks is to listen and learn, when it becomes clear what change is necessary, I'll move quickly and decisively to do what's in the best long-term interests of our players, employees, and our shareholders.

In his 90-day plan, Mattrick also decided that Zynga will no longer be involved with online gambling here in the US. And, even though investors have spoken with their dollars, causing Zynga to fall 14 percent in the stock market, the former Microsoft exec remained true to his quick-and-decisive mantra. He added that online gambling would not allow Zynga games to be social and accessible to everyone, and with $1.5 billion in cash and investments, Mattrick said he will be using the funds to bring Zynga back up to the 6 million paying monthly users it had just over a year ago. Currently the company only has 2 million of that type of customer, certainly a sharp downturn in just four quarters. Active users are also down to 187 million, compared to the 306 million that Zynga had playing their games last year, and the 253 million that were playing just a quarter ago.

Can Mattrick be the one to save the company? Depending on how responsible he was for the Microsoft PR debacle, I'm not sure. As time progresses, more signs point to Ballmer being the man behind not allowing the public relations team to speak to the press and fans as to the reasoning behind the decisions of the new Xbox One, so perhaps Mattrick has simply waiting for an opportunity to take his own reigns and shine. If anyone can bring Zynga back from the brink of a potential disaster, it probably is going to be Don.

Netflix Loses Nearly 500,000 Subscribers, Could Redbox Take the Credit?

posted Sunday Jul 28, 2013 by Nicholas DiMeo

Netflix Loses Nearly 500,000 Subscribers, Could Redbox Take the Credit?

Ever since Netflix announced their price hike and attempted a change in policy over two years ago, things haven't been the same for the company. While they may have been able to break records and post profits in questionable quarters, subscribers keep leaving for sometimes, quite literally, greener pastures. Now, with a new, red competitor by the name of Redbox Instant emerging, Netflix is facing even more customer losses.

Even with a competitive edge, Netflix lost 470,000 subscribers to their disc-by-mail option this past quarter alone, ending June 30. This brings total subscribers down from 8 million to just over 7.5 million. This marks the largest downturn in subscribers to the disc rental subscription since 2011, when Netflix lost 800,000 members after the price change. The good news is that Netflix was able to turn a profit of $109 million, which is a 47 percent margin for discs. The streaming-only business model, interestingly enough, only generated a 22.5% margin of profit.

Through it all, Netflix CEO Reed Hastings is still committed to mailing you DVDs should you choose that option. However, with Redbox Instant by Verizon stepping up with an ability to allow you to rent four discs at a time, along with unlimited streaming to over 5,000 shows and movies, it appears some stiff competition isn't just waiting in the wings - it's here, waiting for Netflix to counter the attack. Redbox, of course, is only $7.99 for both of those services combined, where that same $8 only gets you disc rentals from Netflix now.

B. Riley & Co. analyst Eric Wold commented shortly after the earnings call about the new game in town,

We continue to believe that the $8 combo disc/streaming subscription plan offered by Redbox Instant will represent an attractive option to Netflix DVD-only subscribers that are paying the same price for disc access only. Nevertheless, we take this trend reversal with Netflix DVD-only subscribers as an optimistic sign that Redbox Instant is already having a competitive impact on the industry.

Could Redbox signify the tide turning for the successful endeavor that is Netflix? As always, competition breeds innovation and gives companies the reason to push the envelope, where otherwise they would not take such a risk. I'm excited to see where this war will go, as Redbox has, at least by the numbers, been the only real competition that has hit Netflix where it hurts: in their profit-and-loss statement.

Samsung to Hold Own Developer Conference

posted Sunday Jul 28, 2013 by Nicholas DiMeo

Samsung to Hold Own Developer Conference

Samsung has been becoming a major player in the mobile space for some time now. Over the past few years, more and more people are picking up Samsung products and the company has created a very loyal following of both consumers and developers. That being said, Samsung has finally decided it wants to fit in with the rest of the big boys and host its own developer conference in order to appeal to the mass amount of developers who support their products.

Following the footsteps of Microsoft, Google, AT&T and Apple, the Samsung Developer Conference will take place for the first time this year. Announced this week, the event will be held in, sadly, San Francisco from October 27 to the 29th at the Westin St. Francis. As of right now, registration is not available but you can sign up for an email alert to be notified when it will go live, which will be sometime later this summer. Also, there's no details on what to expect of the conference yet, at least to the public. Samsung says they will announce sessions, guests and other details in the near future and that all of Samsung's products will be covered at the event, so it won't be just focused on phones and tablets. I'd love to know the one developer who signs up to learn about the Samsung washer and dryer SDK.

In comparison to the rest of the popular crowd, Apple and Google usually get about 5,000 attendees each year and Microsoft sees far more than that at Build. The Westin St. Francis has 34 rooms for conferences and a Grand Ballroom with capacity for 1,100 people, so we'll have to see how many developers Samsung can pack into that hotel for their event.

All things considered, it's probably a good idea for Samsung to be starting a conference of their own, as they do have a wide variety of products and services. However, seeing as though they don't own their own dominant operating system, and instead simply provide their services on other interfaces, I'm not sure if the turnout will be what they expect. While Bada is their own operating system, it really doesn't have the attention nor marketshare to deserve its own conference. With Windows and Android being the only two main interfaces to discuss, it seems a little redundant that they would host an event to cover them a second time.

Comparatively, AT&T hosts their own conference and tends to attract both the attention and respect to make it a worthwhile event. Perhaps it is the fact that it occurs at the same time as CES. At any rate, I think a lot of people will become confused as to what the purpose of the conference is for, and fans and loyalist will get mad that they can't attend. Sort of like E3. Perhaps it'll all work out in the end though, and I do have high hopes for the event as a whole, as it'll bring more awareness to Samsung's offerings that aren't Galaxy-named.

Yahoo Buys Admovate, Motivated to Regain Respect and Marketshare

posted Sunday Jul 28, 2013 by Nicholas DiMeo

Yahoo Buys Admovate, Motivated to Regain Respect and Marketshare

Ever since Yahoo's new CEO Marissa Mayer took over in October, several things have drastically changed. First, Mayer completely changed the company's focus and mentality. Then, there's been several rounds of closing non-profitable projects while also improving some and even spending billions to acquire new brands. Yahoo has continued to push forward as the company has picked up yet another startup.

Admovate has been purchased by Yahoo to help them grow their mobile advertising sales, as well as expand their targets ads. As of now, we're unsure of the terms of the deal, but we do know that four employees over at Admovate's HQ in Mountain View, CA will be heading four miles west to Sunnyvale to join Yahoo's ad team. Admovate says that are able to allow advertisers the ability to not only create ads, but then be able to pinpoint the "hyper-local" ad to customers in the mobile space.

Scott Burke, SVP of display advertising and ad technology, said in a blog post (which was posted on Tumblr, by the way) on the acquisition,

Today, we're excited to announce the acquisition of Admovate, an advanced mobile ad technology startup. Admovate has created sophisticated technology that helps marketers reach their desired audience at the right time and place.This is especially important for mobile ad experiences that engage consumers on smaller screens.

This acquisition is part of our efforts to invest further in our ad tech platforms-Apt, Genome, and Right Media-and make buying easier for advertisers and agencies. Admovate's personalization technology accelerates our capabilities in mobile advertising, and we gain an exceptionally talented technical team. Admovate's engineers will join our Yahoo! display advertising team in Sunnyvale.

This is important move for Yahoo, as their ad revenue dropped by over 11 percent last quarter, per their earnings report last week. Interestingly enough, this acquisitions doesn't come too far after Yahoo partnered with Google back in February, to bring more ads to Yahoo's Internet brands. Now with a mobile partner, we should expect to see some new, creative ways for Yahoo to try and gain back some relevancy. This also makes sense as Yahoo owns Right Media Exchange, which is an ad-buying program for companies looking to get their message out across the Web.

Mayer has also been very upfront about her mission to make Yahoo competitive again, saying that they would "continue the pack of doing these smaller deals" in the future. Those smaller deals include acquisitions throughout the year of Xobni, Tumblr, GoPollGo and Astrid, among others.

Michael Dells Raises Bid to Retake His Namesake

posted Saturday Jul 27, 2013 by Scott Ertz

Michael Dells Raises Bid to Retake His Namesake

Michael Dell's plans to buy back his public namesake have had a series of problems since it was initially announced in February. Several of Dell's major investors have taken issue with Michael's plans, believing that it could spell the end for the company.

The loudest of these investors is Carl Icahn, who has urged fellow investors to vote against the purchase. Because of this, Michael Dell and Silver Lake Partners have raised their bid from $13.65 to $13.75 per share. This increase ten cent, being split between the two, has had a couple of planned side effects.

First, the planned shareholder meeting has been postponed until next week. This gives Michael and partners time to find and persuade previous abstaining shareholders to vote with them. This will be a challenge, as about 27% of voting shares did not return a vote.

This leads to the second side effect: a change in abstained votes. Originally, an unreturned vote was counted as a no, but instead, under the new rules, they will not be counted at all. This will help the pair to swing the votes in their favor even more. Icahn is no happier with this offer and is still suggesting people vote against it and oust Michael Dell from the company completely.

Court Rules DISH Hopper is Likely Legal

posted Saturday Jul 27, 2013 by Scott Ertz

Court Rules DISH Hopper is Likely Legal

Since the initial launch, DISH Network has had trouble with their Hopper, with constant lawsuits from News Corp. NBCUniversal and CBS. At this year's International CES, Cnet, owned by CBS, pulled their Best of CES Award from the Hopper because the parent company's lawyers said they couldn't post a review of the product, let alone give it an award. They have since lost the Best of CES Awards entirely.

This week, the lawsuits, which allege that the Hopper's commercial skipping feature Auto-Hop is tantamount to piracy, hit a roadblock. The Ninth US Circuit Court of Appeals upheld a ruling by a lower court that said that the Hopper was likely legal. Because of this, the injunction that the networks were seeking was not granted and the case is likely to go to trial.

Obviously DISH Network is excited about the ruling. R. Stanton Dodge, DISH general counsel, said of the ruling,

This decision is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control.

A statement from FOX said,

This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract.

As this case continues, it will be a fascinating face-off between two companies approaching the same topic from very different angles. DISH believes this is a battle over consumer choice and technological advances. The Auto-Hop feature gives consumers the choice on when and how to watch television programming.

The networks, on the other hand, believe this is a battle over content and business model control. In the same way that FOX limits Hulu availability because of a fear of business model change, or CBS's lawsuit against Aereo for the same reasons, the networks are afraid of their broadcast business changing.

Just as Aereo has already won over the networks, so has DISH Network. At this point, the networks have 2 choices: adjust their business models to live in the new media world, or make way for companies like Netflix and Amazon Instant Video, both of which have found a way to succeed in this new world.

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