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Zynga Q&A: Gambling, Facebook, Sinking Share Price (Update 1)

Stocks in this article: ZNGAFBGOOG

Ciaccia: What about plans for console gaming? Are there any plans for that or is everything going to stay on mobile platform or Web?

Gupta: No plans for console. We're focused on both Web and mobile at this point.

Ciaccia: Acquisitions. The latest one was OMGPop a few months ago. Social gaming companies are seemingly popping up overnight. Does Zynga have any plans to continue adding companies as they see fit, or is growth going to become organic at this point?

Gupta: So we are always looking at and evaluating opportunities that will span the spectrum of IP-related acquisitions, talent related acquisitions, and technology related acquisitions. The fair majority of them have been talent related acquisitions. OMGPop, which was our most recent acquisition, was an acquisition we did around a specific franchise, which has a strong team behind it, and other games. But for the most part, they've been talent related. Going forward, we'll evaluate opportunities, but we'll do so with strong financial discipline.

Ciaccia: That brings me to my next question. The rumored price point for OMGPop was somewhere around $200 million and was at the height of the popularity of Draw Something. Draw Something's popularity has come down. Does that signify financial discipline, or is that something that in retrospect, was "buying at the top?"

Gupta: So, Draw Something, or OMGPop is the second acquisition where we actually acquired IP or a franchise, with Words With Friends being the first one a couple of years ago. We take a long-term view on these things. In OMGPop, we saw an interesting brand and franchise in Draw Something and the team behind that. With Draw Something, they had some interesting turn-based mechanics and the player generated content with the drawings that were being shared virally. I think that's also another interesting aspect of social gaming. So again, we take a long-term view shortly after buying Draw Something. We have a joint release with some of the folks here at Zynga, which improved some of the sharing across. We've recently now launched Draw Something in multiple languages. I think we added something like 12 additional languages and we have the release on Sina Weibo. We think about this much more long-term. We think this is a game and a franchise of which we can build upon.

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