Zynga Scores Again in DefectionVille: CFO David Wehner Jumps to Facebook
Posted 3:02PM 11/14/12 | AOL Original
Here's a free game idea for Zynga (ZNGA).
It's called DefectionVille, and you're basically running a company while trying to stop other executives from leaving.
Unfortunately for the social gaming giant, it's losing this game. Zynga reported on Tuesday afternoon that the exodus continues: CFO David Wehner is leaving the company.
Zynga executives have been leaving for months as the cascading share price and negative business trends have crafted a perfect storm that the company hasn't been able to artfully navigate.
However, Wehner's departure may sting a bit more than the rest. He's actually leaving Zynga to take on a lesser role -- vice president of corporate finance and business planning -- at Facebook (FB).
Zynga Won't Be Clicking 'Like' on This Move
Facebook and Zynga seemed like inseparable partners just a year ago. Zynga's business relied heavily on reaching Facebook players for its "FarmVille" and "Mafia Wars" games. And Facebook was relying on Zynga for the lion's share of its non-advertising revenue.
Both companies have struggled since going public over the past year.
Facebook has seen its share price nearly cut in half since its May IPO, but Zynga has had it worse. Since it went public at $10 last December, Zynga has seen its stock shed nearly 80% of its value.
Investors aren't happy with either company, but at least Facebook isn't suffering the kind of executive and managerial defections that have become far too common at Zynga. The fact that Facebook's business is growing at a time when Zynga is posting sequential declines in its bookings also stings.
The High Price of Shopping Socially
Facebook and Zynga do have another thing in common: Zynga overspent to buy Draw Something parent OMGPOP earlier this year. Facebook also coughed up more than it probably should have for photo-sharing speedster Instagram.
However, even there Facebook has the upper hand. Zynga had to recently write down roughly half of the price that it paid for OMGPOP. Instagram may eventually need to be written down at Facebook, but it's growing in popularity at a time when OMGPOP's flagship game is languishing.
"Mark, David, Barry and Steve are rooted in our culture, committed to our future and part of the talented bench of leadership at Zynga," CEO Mark Pincus said about the four executives who will take on expanded roles to fill the voids left behind by recent departures.
However, if history is any kind of teacher -- and it's been quite the cruel instructor, at that -- it won't be long before those promoted executives are also looking for work somewhere else.