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Zynga stocks nosedive after a disappointing quarter
Zynga stocks nosedive after a disappointing quarter
July 25, 2012 | By Tom Curtis

July 25, 2012 | By Tom Curtis
More: Social/Online, Business/Marketing

Things didn't go too well for Zynga in its most recent fiscal quarter. While the company's revenue increased year over year, its figures fell far below estimates as it struggled to grow its social game business.

Before Zynga announced its earnings Wednesday afternoon, Wall Street expected Zynga to pull in roughly $344 million. Instead, the company saw revenues of $332.5 million. While that's still an increase of 19 percent year over year, the company posted a loss of nearly $23 million, causing investors to bail and Zynga's stock to plummet roughly 40 percent in after hours trading.

Zynga says it suffered during its second quarter because its daily bookings per average daily player fell from $0.051 to $0.046 year over year, meaning users are paying less when they're playing Zynga's games. Its monthly active users, meanwhile, increased to 306 million, up slightly from 292 million in the prior quarter.

Overall, the company's bookings reached $301.6 million. That's a 10 percent increase from the second quarter in 2011, but an 8 percent decline compared to the first quarter of 2012.

Zynga CEO Mark Pincus said the company saw its bookings decline in part because of some recent changes to the Facebook platform hurt that user engagement. He added that the company also suffered because it launched its major Facebook game, The Ville, later than originally expected.

Zynga also lowered its outlook for the rest of 2012, as the company has reduced its expectations for Draw Something -- the Omgpop-developed title that it paid $210 million to acquire earlier this year.

One a more positive note, two of the company's newest games, The Ville and Bubble Safari, have performed well since their launch, and currently boast than 6 million daily players each.

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TC Weidner
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40% in after hour trading is a beat down. The market is insane and makes little sense to me, and this is coming from some one with a wall street background.

Elizabeth Boylan
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Just wait till October...another beat down. Stock Trading ought to be evening entertainment with drinking games every time a stock like Zynga goes down.

That might make the markets more bearable to follow !!

Jane Castle
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Face Book is next on the chopping block......

Carlo Delallana
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Wonder if there's a ripple effect. There are many "Zynga-lite" publishers/studios out there.

Justin LeGrande
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If only this kind of money were circulating in humanitarian efforts...

Harlan Sumgui
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yup. I read today that malaria deaths could be wiped out with an extra 6 billion/year. the world is fubar when it comes to priorities, and whats worse is that the majority believe that the way things are now is some kind of natural order and the best that can be done.

Benjamin Quintero
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Agreed. But the bottom dollar is where it's at. Believe me, the moment it becomes more profitable to be a humanitarian you will see all kinds of "humane" people come out of the wood works. It will be the hot new thing to be generous to others and gumdrops will rain from the heavens. It will be glorious!! =)

Alan Rimkeit
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Pump N Dump, nuff said.....