what does this mean? That Zynga will pay OMGPOP less than what we had heard? How can they do that?
A writedown (see http://en.wikipedia.org/wiki/Write-off#Writedown) means that they are revising the previously announced value of an asset they own downwards. It means the actual value of the asset has turned out to be less than they thought. It's important to investors because the value of company stock is based in part on the value of the company's assets, so if one of those assets turns out to be a lemon, the value of the company overall is less than it was, which can drive the stock down.
how does this influence/affect the guys that came with the acquisition?
The article says that the last $30 million of the acquisition price was structured as an "earn-out," meaning that to get it the OMGPOP unit would have to have met certain mutually agreed-upon performance benchmarks. If the value of OMGPOP today is that much less than it was six months ago, it's unlikely they've hit those marks, so that payment probably won't happen.
For rank-and-file employees who didn't have an ownership stake in OMGPOP, there's less impact except insofar as it shows OMGPOP not performing, which increases the chance of Zynga dumping the unit, shaking up staff, bringing in new managers, etc.
The author speculates that the OMGPOP team did not hit their $30M "earn-out."
When one companies purchases another, part of the deal is often variable based on future earnings, and if the acquired company doesn't hit the projected numbers, they get less money.
"Those figures hurt all the more when put into perspective: Zynga paid between $180 and $210 million for OMGPOP. The final $30 million of the deal was structured as an earn-out."
The author speculates Zynga paid $180M, instead of the maximum deal value of $210M.
Of course, that story is from TechCrunch ("You got your speculation in my journalism! YOU got your journalism in my speculation! Wait, you're BOTH right!"), so it may not be the definitive statement it appears to be.
Yes, that was what I was saying. Given the steep writedown in less than a year, I doubt that OMGPOP hit its targets that would have earned it its full earn out. I could elab, but I really think that statement makes sense?
Keep in mind this is Zynga, so this could just be the normal fuzzy-accounting we've seen in record and movie industry recoupables for decades. Even if they're not playing games with O's numbers to short them on the earnout, at the end of the day I still see it being possible that Z is just stuffing outside debt into OMGPOP because it makes better PR sense.
(Sorry I'm not from around here and don't understand the "write down" language. I presume it's different than "underwrite").
Edit: from trotsky's comment I'm assuming it means they now value it for $x less than what they valued it before (what they paid for).
So how does this influence/affect the guys that came with the acquisition?