This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Call the Cops, Mark Zuckerberg Just Killed Zynga

NEW YORK (TheStreet) -- This is the last thing Zynga (ZNGA) CEO Mark Pincus wanted to hear Facebook (FB) CEO Mark Zuckerberg say on his Tuesday earnings call:

Now, I want to talk specifically about Games for a bit, because I think the story here is a little misunderstood as well. Overall, gaming on Facebook isn't doing as well as I'd like, but the reality is that there are actually two different stories playing out here. On the one hand, our Payments revenue from Zynga decreased by 20% this quarter compared to last year. But the interesting thing is that the rest of the Games ecosystem has actually been growing. Our monthly Payments revenue from the rest of the ecosystem increased 40% over the past year since Payments has been adopted. This evolution is pretty encouraging.

Wow.

Just a few weeks ago, I suggested that Facebook Should Put Zynga Out of Business Immediately. While the social network didn't quite do that yesterday, it flashed serious signals.

Of course, this slap across the face comes on the same day as the multi-millionaire Pincus sent a memo to staff detailing austerity plans, which include blowing out 5% of the company's workforce.

It must feel awesome to work at Zynga these days.

You have a front row seat to an all-out implosion that just so happened to begin shortly after insiders sold your company's stock into a secondary offering for roughly $12 a share. Here's hoping Pincus will at least invite some of the recently fired to his recently purchased San Francisco mansion for a meal.

Zynga stock closed at $2.20 on Tuesday.

Remaining Zynga staffers must be wondering if the company will reprice their stock options, again, on the way down the sub-$2.00 abyss. If I'm a Zynga wage slave, I have given up. But I know I have talent and deserve better, so I'm burning through company time on LinkedIn and Monster.com (do they still exist?).

In any event, the New York Post was a bit harsh when it reacted to the end of baseball season in New York with the headline: Dear Yankees, We Don't Date Losers. It's only a game. Don't be such self-entitled sports fans.

Zuckerberg ain't playing, though. There's no time and no reason to be nice. He sent that message, loud and clear, not only to Pincus, but to Wall Street on Tuesday's call.

... we want to build a strong monetization and economic engine to build Facebook into one of the world's most valuable companies.
... we're focused on executing on our advertising, Payments, and new business opportunities to translate our product successes into a strong and valuable business

"Valuable."

The word only came up once in Facebook's first conference call as a public company, though not as an adjective to describe the business.

And, while Facebook did refer to building "a strong and valuable company" one time in its last pre-IPO public filing, it wasn't used in quite the same context as it was yesterday.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs