Facebook Inc (FB) Slags Off Zynga Inc (ZNGA) In Earnings Call


A number of tech and finance writers are presently asking the question of why Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg singled out Zynga Inc (NASDAQ:ZNGA) during Facebook’s most recent earnings call? The easy and quick answer might be he’s a bit of a d#&k. If Jesse Eisenberg’s portrayal of him was even close to accurate in “The Social Network” perhaps more digging isn’t necessary. However, Zynga Inc (NASDAQ:ZNGA) has made itself an easy target for such attacks owing to the company’s warbles since it went public as an investor’s darling only to disappoint millions.

Facebook Inc (FB) Slags Off Zynga Inc (ZNGA) In Earnings Call

Once the leader in online gaming, Zynga is having a bit of an identity problem. Is mobile its future? Gambling? A return to its roots? They don’t seem to know so you can certainly forgive investors and the public for asking the question.

In the most recent earnings call, Zuckerberg stated that games represented 12 percentage points of Facebook Inc (NASDAQ:FB)’s 15 percent year-on-year growth in payments revenue, and that was done largely without Zynga or in spite of them. While Zynga has struggled to become a cross-platform developer, you mustn’t forget the bulk of Facebook’s games revenue still comes from the desktop.

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Facebook Inc (NASDAQ:FB) says Q1 was its largest three-month quarter of games revenue in the company’s history — despite a 37 percent drop in year-over-year payments from its largest developer. For those who follow Facebook Inc (NASDAQ:FB) it’s quite clear who Facebook was referring to with this statement.

However, it’s the following statement from Mark Zuckerberg that is encouraging calls of “douchery,” when rather than keeping his company’s statement vague he said….

“With the exception of our largest partner, Zynga — whose growth hasn’t been as awesome as everyone had hoped, the rest of the community is actually growing quite well and is quite healthy. And so we’re pretty happy with that, and it’s a pretty diverse group. We’re up to 81 of the top 100 top grossing iOS apps and 70 of the top grossing Android apps are connected in with Facebook……….”  (This statement was cut well short as Zuckerberg stopped slaying Zynga Inc (NASDAQ:ZNGA) and simply sang Facebook’s praises).

So what has Zuckerberg so angry? One can imagine that he, like others, views Zynga Inc (NASDAQ:ZNGA) as a bit of a one trick pony, whose most popular titles were developed years ago with few new offerings to stave off the likes of Candy Crush Saga which is crushing Zynga’s FarmVille 2 in active daily users. The former has 15 million while Zynga can only boast 7 million farmers.

Additionally, Zynga Inc (NASDAQ:ZNGA) rarely releases cross-platform and takes a long view on their productions. In Zuckerberg’s world that’s just not fast enough.