The Internet And E-commerce Peter F.

Drucker has stated that the Truly revolutionary impact of the information revolution is just beginning to be felt ... the explosive emergence of the internet as a major, perhaps eventually the major, worldwide distribution channel for goods, for services and surprisingly for managerial and professional jobs is profoundly changing economies, markets and industry structure; products and services and their flow; consumer segmentation, consumer values, and consumer behaviour; jobs and labour market. This quote summarizes quite succinctly the tremendous impact that the internet is having on the global marketplace. Online technology provides a low cost, attract customers and handle purchase order. Zynga.com is also a internet venture. It has turned the video game world upside down in its short five-year history. About Zynga Zynga is a provider of social game services founded by Mark Pincus in July 2007 and headquartered in San Francisco, California. The company develops social games that work stand-alone on mobile phone platforms such as Apple iOS and Android and on the Internet through its website, Zynga.com, and social networking websites such as Facebook, Google+, and Tencent. Zynga states its mission as "Connecting the world through games."

More than 240 million monthly active users playing its games, which include CityVille, Zynga Poker, Draw Something, Hidden Chronicles, FarmVille, CastleVille, Words With Friends, Empires & Allies, Scramble With Friends, Caf World, The Pioneer Trail, Indiana Jones Adventure World and Mafia Wars.
In February 2010, Zynga opened a studio in Los Angeles, California as well as Zynga India in Bangalore, the companys first office outside the United States.

Unique Idea of zynga: In the process of launching its games, Zynga would hit upon some unique ideas that it would later describe as its philosophy. It believed games should be accessible to everyone,

anywhere, any time. Games should be social. Games should be free. Games should be data driven. And games should do good. Those were lofty goals, but no one else in the industry believed in trying to make all of those things happen.

Reason behind popularity of Zyngas games: Zyngas games in particular, three core features of their structural design stand out that are frequently referenced as reasons for the success of Zynga. First, Zyngas games are free-to-play. They require no payment by the player to access and participate in the main features of the game. Second, Zyngas games are social. Players perform social interactions as a core part of their playing experience. Therefore, many believe that . . . the runaway success of the online games from Zynga can largely be attributed to how they bring together acquaintances who otherwise wouldnt have much to say to one another . . .. Finally, Zyngas games offer a continuous stream of engaging gameplay. The game environment Zynga provides engages players by offering them new and exciting game content .

Business Model Zynga is supported in two manners: via direct credit card payments and partner businesses.

Hasbro partnership:
In February 2012, it was announced that Zynga and Hasbro had partnered to create products based on Zynga properties and brands. In October 2012, Zynga and Hasbro launched eight face-to-face games resulting from their collaboration: FarmVille Hungry Hungry Herd and Animal Games; CityVille Monopoly and Skies; Words With Friends Classic, Luxe, To Go; and Draw Something. The Hasbro games include ties to Zynga Web and mobile games, such as in-game currency that players can use in the digital versions of CityVille and FarmVille.

Real-money gaming:
In October 2012, Zynga announced a partnership with bwin.party, an international real-money gaming operator, to launch real-money gaming in the U.K., including the release of online poker, a suite of 180 casino games, and the first online FarmVillebranded real money slots game during 2013

Customer acquisition:
Customer acquisition is key to Zynga's business. Zynga's customer acquisition was largely built on Facebook initially and most of its new users came in through incentivized viral loops. However, in addition to viral acquisition, Zynga has also invested in paid marketing

Platinum purchase programme:

favorable rates by making a payment via wire transfer. In contrast, the normal maximum purchase limits are $50 to $200

Viability:
In July 2012, after announcing disappointing second quarter results, some analysts speculated that the sale of virtual items may not be a long-term, viable business model. Analyst Richard Greenfield downgraded Zynga from "buy" to "neutral" in an article titled "We are sorry and embarrassed by our mistake.

Scam ads:

Through 2009, Zynga made money from lead generation advertising schemes, whereby game participants would earn game points by signing up for featured credit cards or video-rental services. How Zynga grew from gaming outcast to $9 billion social game powerhouse
Zynga Games are so successful because of 3 core components.

They are Metric driven They Take in user opinion They Make hard choices

They are Metric Driven

The first and most prominent reason why Zynga Games are so successful has to do with the metrics that are at a games core. There are so many challenges to running a live game on Facebook, or Zynga.com, but one of the primary benefits is near instant feedback. Every action that a user takes can be tracked to understand how the game is performing. This is much more then simply tracking purchases and logins.

Look at a game, every button, every clickable area is in some ways tracked so that analysts can understand how the games are performing. Maybe a button is too small and players are not noticing it. Maybe it is positioned in the wrong spot and thus players dont think to click on it.

They take in user opinions

One of my favourite activities to do as an Engineer at Zynga is take part in their Voice of the Player events. These are events where anyone in the company can sit in the chair of a Customer Service rep and talk directly to the users. This is especially fruitful to do this with a product that you are in charge of or are working on.

You see things differently when you view then through the users eyes. When you hear of the frustrations they experience you realize where your game or tech has reached various limits and edge cases. Maybe you build solutions around those edge cases or maybe it enables you to approach problems differently.

They make hard choices.

This grand attention to detail mentioned above enables game makes to better understand their own games and their players. Where most game makes fall short however is that they do not make the hard decisions that need to be made. Maybe they feel passionate about how a game mechanic should be setup or they feel like they cant justify the cost to redo an aspect of a game.

Making the right bet

In the May 2007, Facebook opened up its applications programming interface, inviting other companies to make applications on top of its social network in hopes of beating MySpace. That move helped Facebook gain users as well as developers, creating a virtuous circle. Mark Pincus, CEO of Zynga, decided to go along for the ride.

The company released its first game for Facebook in September 2007. It created a free social poker game on Facebook, chosen because it was simple and it was a universal game that enabled friends to plan a poker night with each other no matter if they were far apart or not. Zynga was riding a wave of resurgence that poker had seen since 2003. Zyngas first game was successful enough to make the company profitable.

At the time, the speed was important. Not everyone realized it, but Zynga was in a monumental race to beat others to the treasure. If it learned the most about how to make money from social games and executed the fastest, it would own the market, regardless of whether giant companies came into it later.

Getting fund from Venture capitalists at right time: Mark Pincuss intent was to create a real business before he needed to go into a venture capitalists office. He was also able to secure investors that he was already friends with. But it had a path to growth because its user count was growing fast, and it was already profitable. As a result, Pincus was able to command unusual terms, like giving himself stock that had 10 times the votes of common shares and maintaining control of his board of directors. In a deal announced Jan. 15, 2008, Zynga was able to raise $5 million from Union Square Ventures, Foundry Group, Avalon Ventures, Reid Hoffman, Peter Thiel and other angels. With the new money, Zynga was able to move even faster at a time when the great Facebook land rush was under way. The social network constantly revamped its platform and app makers had to adjust in real-time. So just a few months after its first round, Zynga raised another, larger pile of cash.In July 2008, the world took notice as Kleiner Perkins Caufield & Byers invested $29 million in Zynga. The amount of money was huge for a gaming startup at the time. Few other companies had amassed such a large amount. It meant that Zynga was always going to have a pile of money to invest in its next major titles. That was a luxury that many of its competitors didnt have, and it was why they fell behind.

Zynga's Decline Points

Zynga spots a successful app and decides that it could be a lucrative IP. So they attempt to acquire the developer outright. Numerous social and mobile games have been cloned by Zynga.
Zynga came to prominence in the gaming industry with games like Farmville and Mafia wars, which were based on concept honed in earlier games by other companies.

Zynga became public in December 2011. Originally priced at $10, ZNGA shares
reached a price of $14.50 in March 2012, but fell steadily after that point, hitting $2.09 in 2012.

Revenue According to the companys first-ever earnings report, revenues from advertising and the sale of virtual goods grew by 59 percent compared with the same period the prior year. The company's top three games FarmVille, FrontierVille and CityVille accounted for 57 percent of online game revenue. Total revenue was $329 million for the quarter ending March 31, 2012. SWOT analysis

Strengths

Online growth Loyal customers Market share leadership Strong brand equity Pricing Strong Financial Equity

Weaknesses

Low R&D Not innovative Weak management team No barriers to entry

Opportunities
Acquisitions Asset leverage Online Product and services expansion

Threats
Competition External changes (government, politics, taxes, etc) Lower cost competitors or imports

Conclusion Zyngas social network games have seen success due to the fact they are often freeto-play, social, and have engaging gameplay. Zynga games are not really free-to-

play, but are instead a hybrid between free-to-play and pay-to-play. The games are able to offer the flexibility of a free-to-play game with easy access for new players and flexible payment options, while monetizingin one way or anothertheir entire player market like a pay-to-play game. They do this by offering players a hidden choice between paying real currency or paying media value through word-of-mouth marketingwhich triggers an incredibly effective viral referral marketing campaign to continue engaging with the game. They are a hybrid, offering the basic benefits of social gamingthe alone together shared experiencewhile not requiring the same time commitment required by most full-fledge social games. By turning players friends into resources, the friends become similar to NPCs, entities that can be used when necessary and can be ignored when desired allowing the greatest flexibility possible in multiplayer gaming. Ironically then most of the arguably social mechanics are instead actually a result of implementing a basic world-of-mouth marketing strategy as opposed to the design of the experience. Zynga games are a perfect example of gamificationspecifically the gamification of clicking. Instead of having created an engaging independent game environment Zynga has, in fact, done something much more unique: Zynga has created an enjoyable way to better engage an incredible number of people in the act of clicking. These above mentioned facts are the reasons why Zynga is a successful and its other competitors are still struggling.