Zynga Inc (NASDAQ:ZNGA) COO, David Ko, in an interview on Tuesday, emphasized on the importance of discipline for the company’s future acquisitions. “We are going to be very disciplined in our approach and in [sic] making the right decisions,” he remarked.
Ko’s take on discipline comes a year after the renowned gaming company went on the public market. After raising $1 billion in its IPO, Zynga Inc (NASDAQ:ZNGA) swiftly proceeded to ink an acquisition deal that saw it own OMGPOP, a then fast growing gaming company. Nonetheless at the wake of the acquisition, Zynga’s fortunes did not grow. Instead, they plunged; pushing the company’s share price more than 75 percent down through the rest of the year.
Following the tough year that succeeded the OMGPOP acquisition, Ko maintains that the company now has a more conservative inclination toward acquisitions. Zynga had $1.65 billion in cash at the fall of last year. Despite this huge muscle for acquisitions relative to its competitors, COO Ko said making the right decisions with acquisitions would be the top-most priority. Ko narrowed the company’s criterion for prospective acquisition targets to three primary aspects.
Firstly, Zynga Inc (NASDAQ:ZNGA) will be looking for companies that can help improve profitability. Also, the acquisition target should be able to accelerate the company’s existing franchise. Zynga will also be looking for a deal that will be able to support its existing network of players.
“All of these things have to come together. If they don’t fit in with this criteria, then we’re not likely to move on them,” said Ko. The COO further noted that the company’s discipline was the driving force behind it’s fourth quarter, citing the $25 million cost cuts during the quarter. In the Tuesday interview, Ko noted that Zynga’s corporate development team had been actively engaged in talks with different developers.
Profits surprising considering executive exodus in 2012
As we reported on Tuesday evening, Zynga did manage to post surprise profits of 1 cent. Although this marks a decline compared to the 4 cents profit a year ago, it was impressive considering the mass executive exodus that rocked the company in 2012. Between mid-2012 and December 2012, Zynga Inc (NASDAQ:ZNGA) lost quite a number of top executives including its former Vice President, Roy Sehgal.
In fact, David Ko assumed the role of COO after longtime EA veteran, John Schappert, left the company. Before his promotion, Ko was in charge of Zynga’s mobile efforts