OMG, Zynga Planning “a Few” More Hundred Million-Dollar Acquisitions

Zynga is picking up its pace of acquisitions and is willing to do “a few” more deals over the next couple of years that are equal or greater to its $180 million acquisition of OMGPOP last month.

In an interview with Bloomberg, CEO Mark Pincus said he’s looking for both great teams and companies that have break-out hits.

It’s not a big surprise that the social games company would go on a buying spree.

As the largest social games developer on Facebook, it has created a hits-driven business, and since it is virtually impossible to sustain a near-perfect record of hits, it must also buy them.

The San Francisco company also has the resources to pull it off. Thanks to its IPO last year, it has $1.81 million billion in cash and no debt, and in January, it hired Barry Cottle from EA to head-up acquisitions and corporate development.

OMGPOP is a case in point: It developed a game called Draw Something, which was an instant sensation on iPhones and Android devices. Zynga paid more for the 40-employee company than it did for the past 22 acquisitions combined. Over the past year, it also tried aggressively to purchase both Rovio and PopCap, which ended up selling to Electronic Arts.

And now it’s telling the world that its purse strings are loosening.

“We’re sitting in a very advantageous position,” Cottle told Bloomberg. “We have a significant amount of cash, we have no debt, and we have access to debt to be as aggressive as we need to be.”

Latest Video

View all videos »

Search »

Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work