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Zynga CEO Needs to Whack Headcount

Stocks in this article: ZNGA

NEW YORK ( TheStreet) -- It's been three months since Don Mattrick took over as CEO of Zynga (ZNGA).

First, here's the good news.

Don's already well-regarded by the troops within the company. He's brought a sense of urgency and accountability to the company that was lacking before. He's questioning people and the "same old same old" process they've always followed to doing things at the company.

And there's probably even a little bit of fear that Don is sizing up specific employees and specific divisions. They're likely thinking, "If he doesn't think I'm/we're adding value, he might be thinking of getting rid of me/us."

That's a healthy sense of paranoia.

Here's the other bit of good news for long-term investors: So far, it seems that Mark Pincus is letting Don take full charge of this company. From what I understand, after welcoming Don in to the company in July and showing him where the cafeteria was, Mark quickly left San Francisco for an extended Hawaiian vacation.

I think that was a great move to let Don be Don. No henpecking from Mark. No, "Oh, I wouldn't do that; you should do this" second-guessing. It may still be Mark's company, but he was staying true to his word to stay out of the way.

That's very important. Recall that Ben Horowitz wrote a famous blog post after Mattrick's hiring saying that essentially Mark would never give up control and that Zynga employees were going to struggle figuring out who to report up to on certain matters.

From Ben's blog (quoting the Geto Boys):

Cause two suckers can't agree on something a thousand mutherf**kers die for nothing

All indications to date suggest that there is not shared command at Zynga today. There's Don's command with the tacit approval of Mark and the Zynga board.

By the way, nobody ever talks about it, but I think Zynga has one of the best boards in Silicon Valley. John Doerr, Bing Gordon and Reid Hoffman are on this board (among others). Of course, Doerr and Gordon are there because Kleiner Perkins Caufield & Byers still has a huge investment in Zynga, and one day they want to cash out at much higher levels than $3.50 a share. That they and Hoffman are there in the first place, however, is a testimony to how highly they think of Mark Pincus and how big they still believe Zynga can be (and it can).

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