Zynga, Groupon Need More Than ‘Less Than Awful Earnings’

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Zynga Inc (NASDAQ:ZNGA) and Groupon Inc (NASDAQ:GRPN) remain wallowing in lows despite “less than awful” earnings, and new CEO’s at each company are making efforts to revive these companies from serious downturns. Both companies are lagging behind their competition along with unimpressive business model, says a report from 247 Wallst.com by Douglas A. McIntyre.

Zynga Inc (NASDAQ:ZNGA) is at present trading at $3, which though relatively better than past year, is still dismal as in early 2012 shares were above $14. Groupon Inc (NASDAQ:GRPN) is facing a similar fate as it surged up to $10 in the past year and was $25 in 2011.

Zynga earnings beat consensus but future still uncertain

Earnings from Zynga Inc (NASDAQ:ZNGA) can be broken in two parts. The company performed better than Wall Street expectations in top and bottom line in the previous quarter. Zynga recently decided that it will not offer online gaming in the United States, which was anticipated to be a significant driver for the company. The social game maker can boast of three games on Facebook Inc (NASDAQ:FB) that are in the top ten lists, but overall its popularity is declining.

Don Mattrick, the new CEO of Zynga Inc (NASDAQ:ZNGA), is trying to push the games into the mobile segment after Facebook did so. Investors can hold their hopes for the time being and be optimistic, but taking a wider view on the company, it appears that Zynga is more dependent on Facebook and is beaten too low by a series of free games that are available on mobile.

Groupon needs more action than words

Eric Lefkofsky, newly appointed CEO of Groupon Inc (NASDAQ:GRPN), is encouraged by the results posted by his company. He said that Groupon will gain more traction in mobile e-commerce than a failed coupon business model. He said that Groupon will be turned into a first-stop online shop for shoppers and will take on Amazon.com, Inc. (NASDAQ:AMZN). It will transform itself from just a site where people visit to get better deals on goods and services already for sale. Investors bought what Lefkosky said, and shares surged 20 percent. But Groupon needs to do something in order to increase its sales and compete with dozens of Groupon competitors.

For investors, the quarterly results often reflect the health of the company along with its performance. As of now there is no tangible point in the plans of Zynga Inc (NASDAQ:ZNGA) and Groupon Inc (NASDAQ:GRPN), which can make investors optimistic towards the company.

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