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Zynga Planning On More Acquisitions With Huge Cash Hoard

Zynga Planning On More Acquisitions With Huge Cash Hoard

April 17, 2012
If you think Zynga is done using its huge cash hoard to acquire other companies, I’ve got some bad news for you. Zynga made waves with its acquisition of Draw Something developer OMGPOP for $200 million last month. But Zynga’s CEO told Bloomberg in a recent interview that the company wasn’t done yet.
Chief Executive Officer Mark Pincus expects to do “a few” deals the size of OMGPOP or larger in the next three to five years, he said in an interview at the company’s San Francisco headquarters. “We love finding great, accomplished teams that share our mission and vision,” Pincus said. “If we ever see breakout opportunities that massively accelerate social gaming at Zynga, we’ll aggressively pursue those, too.”
And after its recent IPO, Zynga has a staggering $1.8 billion in the bank. Much of that money will apparently be focused on the mobile segment. According to the story, Angry Birds maker Rovio thankfully turned down a $2 billion dollar acquisition offer from Zynga recently.
The company’s next targets are likely to be mobile-game makers, since it increasingly competes for the attention and dollars of gamers who download apps from Apple Inc.’s App Store and Google’s Android marketplace, said Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles. “They are not really that competent in mobile, and they need to be,” said Pachter, who rates shares of Zynga outperform and doesn’t own the stock. “It’s the way that a big chunk of the world accesses the Internet.”
Our dislike of Zynga and its tactics are well known here at AppAdvice. Along with blatant copying of other successful game formulas, the company’s treatment of “whales” that spend thousands of dollars to purchase virtual goods is suspect at best. What do you think of Zynga? With that much cash, will the company be able to control the large majority of the mobile app gaming market? Here’s hoping Zynga will lay off and let the small developer thrive.

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