As the name behind the huge success that is FarmVille, you might expect Zynga to be on the up and up when it comes to profits. In fact, the reverse is true. Revenues may have been better than some predicted they would be, reaching $311.2 million during the fourth quarter, but this has not stopped the company from struggling to enhance its user figures.
Zynga has close ties with Facebook, but it might provide a cautionary tale to the social media giant as it prepares to go public. Zynga itself went through its IPO last year, and although its shares received a boost owing to the Facebook news, they dipped by a dollar each on the news of the quarterly revenues. Some people appear to be wondering whether Zynga can continue to find significant numbers of new members to carry on boosting their business in the future. The numbers have been noted as stagnant in recent times, and this has proved to be a point of concern just a few months after their initial public offering.
No doubt, those in charge at Facebook will be watching Zynga’s share price fluctuate, as it may have lessons for them to learn as well. However, Zynga also took the time to release a new game very soon after the earnings report was made public. Was this a well-timed effort to boost the user numbers? It could well be the case. We shall be watching to see what happens next.