Rumour: Rovio shunned $2.25bn Zynga takeover

A new report from The New York Times claims that Angry Birds creators Rovio rebuffed an astonishing $2.25bn takeover offer from Zynga in the summer.

The context placed on the revelation is that potentials targets are being scared off by a ruthless corporate culture that, while serving Zynga well on the business front, is jeopardising operations behind the scenes.

The company operates like a federation of city-states, with autonomous teams for each game, like FarmVille and CityVille,” the piece reads. At times, it can be a messy and ruthless war. Employees log long hours, managers relentlessly track progress, and the weak links are demoted or let go.

But that culture, which has been at the root of Zynga’s success, could become a serious liability, warn several former senior employees who agreed to speak on the condition of anonymity because of fear of reprisals.

As the discord increases, the situation may jeopardise the company’s ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119m on acquisitions in the last two years.

It adds that the reason behind Zynga’s failure to secure a $950m acquisition of PopCap was the concerns of PopCap’s founders about rumoured share award rescindments.

PopCap, of course, went on to accept a $750m takeover bid from EA which could in time rise to $1.3bn.