Zynga Spends More IPO Cash
Zynga (NASDAQ:ZNGA) shares were riding high after news that it had finally acquired OMGPOP, the maker of the game “Draw Something.” The deal will reportedly cost Zynga $210 million. OMGPOP chief executive Dan Porter will be appointed Zynga’s general manager and all its workers will join Zynga, though the New York-based company will not move to California.
“Draw Something” lets users take turns guessing what their friends draw. It grew rapidly to currently clock 22.4 million monthly users on Facebook in just six weeks. A version for iPhones and iPads that was released in February is currently the most popular program in Apple’s App Store, with 35 million downloads and 1 billion drawings.
“Six weeks ago, we released this game and it has been an incredible and wild ride since,” Porter told TechCrunch. “What’s exciting for us is that this is a game that people of all ages and all over the world have been playing. It’s a game where the content and the game itself is made by the players. This is about players first.”
Zynga, which gained popularity through Facebook, is trying to bring down its reliance on the social networking platform. Almost 90 percent of its sales still come from Facebook, which takes a 30 percent cut.
The San Francisco-based gaming company had recently launched Zynga.com, which will provide its gamers a location separate from Facebook. It has also been spending heavily on acquisitions, having bought as many as 22 companies in 2010 and 2011 for a total $147.2 million. That included $53.3 million being spent on “Words With Friends” developers Newtoy. Zynga raised $1 billion in a December initial public offering.
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