Chris DeWolfe on Building a Social Gaming Giant, Zynga's Problems and Lessons From MySpace

Chris DeWolfe on Building a Social Gaming Giant, Zynga's Problems and Lessons From MySpace

“Never have a business that is only reliant on one platform,” the internet innovator tells TheWrap. “Companies that totally rely on Google and have great SEO that drives traffic are in trouble.”

Five years after leaving MySpace, the internet company he helped put on the map, Chris DeWolfe is still living social.

His search for the next big thing in new media has pushed him into the world of online gaming as the head of Social Gaming Network (SGN).

The internet innovator tells TheWrap that his experience founding, leading and eventually selling MySpace to News Corp. for $580 million in 2005 has helped him chart a course for his new startup. He's applying what he learned changing the way that internet users track, chat and share with their friends and family to help SGN games such as “Panda Pop,” “Rainbow Rush” and “Bingo Blingo” go viral. The company posted revenue of more than $50 million in 2013 and plans to release between six to eight games this year.

He's also remembering what not to do. MySpace's time at News Corp. coincided with it being supplanted by Facebook and eventually being sold for pennies on the dollar to Specific Media Group and pop star Justin Timberlake. It's also from observing other white hot technology companies that went cold, such as Zynga. The social gaming revolutionary was too slow to embrace mobile platforms and its share price nose-dived as a result.

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DeWolfe spoke with TheWrap about the need to stay ahead of the pack, the growth of the mobile market and the future of gaming.

TheWrap: How did your experience at MySpace prepare you for the world of online gaming?
Chris DeWolfe
: Everything on the internet and mobile has become more social. To do something right, you have to build in social elements.

You built the company through acquisitions — first with Mindjolt then with Social Gaming Network, which gave your company its name, and most recently with Mob Science. Why did you decide to go on this route?
It's always difficult to start a platform. You can have great games, but it's kind of like if a tree falls in the forest, if nobody knows who you are, it can be hard to get people to find it.

Are you done buying?
We're always looking for opportunities and at other companies that might make sense to acquire down the road, but we're not actively looking. Right now, we believe we have the core components to become a huge gaming company by adding to our talent base organically. We're hiring the best artists and designers in the world. We have the infrastructure and we're filling it in with super polished talent.

Zynga has struggled since going public. What lessons can be learned from its troubles?
Never have a business that is only reliant on one platform. Companies that totally rely on Google and have great SEO that drives traffic are in trouble the second Google changes its algorithm. You have to be diversified to do well on the web. You have to leverage Google and Facebook and viral features, but you can't be completely reliant on any one of them.

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Are there risks with acquisitions?
The majority of acquisition made in any space have been screwed up. Of all of the acquisitions made in the last 10 years, the most successful one was probably YouTube. Most other companies have been acquired for hundreds of millions of dollars and lost billions. You have to make acquisitions thoughtfully and have a strong process in place that incentivizes talent and keeps that entrepreneurial spirit alive.

Did your experience selling MySpace to News Corp. change your view of acquisitions?
There were positives and negatives in that experience — a lot of things done wrong and right.

I also acquired companies during my MySpace years, and I found that it was tricky to decide to what degree you integrated services. It's OK to find synergies, but if you push too hard you may be fitting a square peg in a round hole and you could ruin the company and the things you liked in the first place.

Look at Facebook's acquisition of Instagram. That was supremely well timed and executed. [Mark] Zuckerberg was highly criticized for spending a billion dollars, but it's going to go down as one of the better acquisitions. Mark has left Instagram alone to a degree, but he's still thinking heavily about ways to monetize it.

It seems like society is moving faster and faster, particularly when it comes to technology. Is it difficult to stay ahead of the curve?
You always have to be ready for what's next in technology and consumer behavior. A lot of people saw the rapid move from the web to mobile coming, but it happened a lot faster than most of us thought it would.

What trends are you monitoring closely?
Everyone is looking at Asia. By that I primarily mean China, Japan and Korea. There are different characteristics to each market. In Korea, for instance, the primary distribution platform is an instant messaging platform called Kakao. In China, it's social networks and texting. In Japan, the app market is getting bigger and bigger. There are a lot of opportunities for new platforms to emerge abroad.

You've had great success with two games, “Panda Pop” and “Panda Jam.” Why have players responded so strongly?
The game art is fantastic. There's cute animation, a strong story arc and people like pandas.

  • IronCity412

    The lesson from Zynga is take your head out of your spreadsheets and look around once in awhile. You can't run a business by data analysis alone.

    Another lesson, treat people with respect. Zynga has the worst corporate culture I have ever seen mostly derived from treating people like dirt.