1) There is probably a significant overlap in the DAU for Zynga and Draw Something, so doubling would be somewhat of an overstatement. Completely agree, however, that this is a quick and dirty way to acquire new users.
2) Saying that casual gamers are fickle is probably as much of an argument against Zynga buying OMGPOP as it is for OMGPOP selling to Zynga.
I’m surprised that Zynga didn’t just clone the game, as it has done with Tiny Tower. Arguably, pretty much every mobile game right now is a re-invention of an older game, so why pay such a high price tag for something they can easily build very quickly?
Judging by the number of job openings at Zynga, the company is aiming to scale quickly, and this acquisition may just be an easy way to gain a team of engineers, designers, and business folks that are already familiar with what Zynga is all about. At the end of the day, what makes this an accretive acquisition is the fact that it’s as much of a talent hire as it is a product integration and user acquisition.
Recently, someone asked me why Zynga is winning on Facebook, and I responded that I wasn’t so sure Zynga could actually maintain a leading position despite having first-mover advantage. Aside from rising marketing costs and low customer retention, Zynga also faces a highly-fragmented and growing market with a large number of incumbent and disrupters. The OMGPOP acquisition could also be an attempt to consolidate the space and remain a market leader.
As history has shown with RIM and Yahoo, early winners are not necessarily the dominating victors in a nascent industry. I think that Zynga is well aware of this fact and will strive to maintain its leading position through a balance of innovation and business strategy.
(On a side note, what kind of valuation metric would make sense for an acquisition like this? A revenue or EBITDA multiple? Discounted cash flow? Or something more start-upy like price per engineer?)