Social Media Stocks Rise: Facebook Inc (NASDAQ:FB), Zynga Inc(ZNGA) and Yelp Inc (YELP)

The week that just went by saw some stocks reverse losses of previous weeks and months and gain on solid results.

One of them was Facebook Inc (NASDAQ:FB), which surprised everyone with its better-than-expected results. But biggest and most pleasant surprise for its investors and analyst community was the rise in revenues from mobile ads by the company.

While Facebook did post a loss of $59 million in the third quarter, its advertising business posted a 36 percent rise in revenues to $1.09 billion.

Better still for the social network, 14 percent of ad revenues came from mobile use, an area where analysts have expressed concerns about making money.

On Tuesday, Facebook shares recorded their biggest single-day gain since it went public in May, while a day later it went as high as $24 a share. The stock closed at $21.94 this week, up 14 percent for the whole week. Since Oct. 10 its shares had been floundering below $20 a share.

Game developer Zynga Inc(NASDAQ:ZNGA) was another stock that saw it making gains after third quarter results proved to be better than analyst estimates.

It also unveiled plans to buy back stock and move into real-money gambling.

Zynga's shares rose 12 percent to $2.39 at the close, recording the biggest gain since February. The stock had depreciated by more than three-fourths from debut price last December.

While its sales rose 3.2 percent to $316.6 million, the company said that it would repurchase stock worth $200 million.

Yelp Inc(NYSE:YELP) was the third social media stock that went on to record hefty gains. The site, that lets users review businesses and products, saw its share price 7.4 percent to $25.77 after its reported quarterly results that exceeded analyst forecasts.

Yelp said third-quarter sales will be about $36.4 million, exceeding its prior forecast and more than analysts’ average $35.7 million estimate. The company’s shares were further boosted by its acquisition of Qype GmbH, Europe’s biggest local review website, for about $50 million to expand beyond its U.S. base.

Its shares have appreciated about 72 percent since its IPO in March.

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Facebook Inc (NASDAQ:FB) comes out in support of struggling Zynga Inc (NASDAQ:ZNGA)

Zynga Inc(NASDAQ:ZNGA) may be struggling and planning to reduce its studios and games in order to pare costs, but its biggest partner and ally Facebook still has faith in the company, which developed social game `Farmville' for it.

A senior Facebook Inc(NASDAQ:FB) executive told some members of the media on Thursday that though the company was going through a struggle, it still reposed confidence in it.

While announcing Facebook's quarterly results earlier this week, Facebook chief Executive and founder Mark Zuckerberg had revealed that its revenues from Zynga had slid 20 percent.

Zynga appears to have lost the plot somewhere and is floundering.

The company has decided to lay off more than 100 employees and close its Boston office, with more closures possibly on the way.

Zynga will also phase out 13 games. While no list has been announced, the sleuths at sister site Inside Social Games examined Zynga’s worst-performing games, exploring possibilities for sunsetting, AllFacebook site reported.

At an interaction with some select journalists Facebook's director of games partnerships Sean Ryan said, "Zynga will come back. They’ve got great games; they are a great partner for us."

Earlier Zuckerberg had said of the gaming ecosystem, "Overall, gaming on Facebook isn’t doing as well as I’d like, but the reality is that there are actually two different stories playing out here. On the one hand, our Payments revenue from Zynga decreased by 20% this quarter compared to last year. But the interesting thing is that the rest of the Games ecosystem has actually been growing. Our monthly Payments revenue from the rest of the ecosystem increased 40% over the past year since Payments has been adopted. This evolution is pretty encouraging."

Shares of ZNGA rose over 12% in Thursday’s session after the company posted better than estimated revenue.

Other Facebook executives downplayed the implications of Zuckerberg's comments.

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Zynga Inc (NASDAQ:ZNGA) rebounds On Upbeat Revenue And Buyback Plans

After posting the worst IPO this year, shares of Zynga Inc(NASDAQ:ZNGA) are showing heavy buying in afterhours session on Wednesday after the struggling gaming company posted better than estimated third quarter earnings.

The company posted net loss of $52.7 million, or 7 cents a share. However, on an adjusted basis, the company broke even, posting 0 cents a share, matching analysts’ target. Revenue during the quarter rose 3% year over year to $316.6 million well above analysts’ target of $256 million.

Separately, investors are also cheering the company’s surprise announcement of a $200 million buyback program.

“While the last several months have been challenging for us, Zynga remains well positioned to capitalize on the growth of social gaming,” CEO Mark Pincus wrote in the release.

Shares of ZNGA soared 16% in after hours session, but still down 75% from its $10 IPO price in December 2011.

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Zynga Inc (NASDAQ:ZNGA) cuts jobs, studios and games to reduce costs

Games developer Zynga Inc(NASDAQ:ZNGA) is in serious trouble.in a bid to cut costs, the company is eliminating games, studios and jobs in a drastic move.

The one-time close ally of Facebook, for which it created the popular social media game `Farmville' said on Tuesday that it intends to reduce bout 5 percent of its workforce of 3,200 employees.

This is the first time that Zynga, which went public late last year, is resorting to job cuts.

Zynga also said it will get rid of 13 older games and reduce its investment in the game "The Ville." It will close its studio in Boston and may close studios in Japan and the U.K. It runs 18 studios worldwide.

Zynga's stock has depreciated about 70 percent since its stock market debut, though on Tuesday it rose more than 3 percent after the announcement was made. The company is scheduled to report its third quarter results on Wednesday.

The fortunes of Zynga are closely allied to that of Facebook, from whom it derived about 15 percent of its revenues. With Facebook reporting better-than-expected results for the third quarter, investors are hopeful that Zynga may also follow suit.

Zynga said earlier this month that it expected to post a third-quarter loss due to weak demand for some of its titles. It said its revenues would likely be nearly flat compared to the same period last year.

It had also warned about taking some measures to reduce costs that would help improve its performance.

CEO Mark Pincus said that the job cuts were the most painful part of the overall cost-reduction plan, which also includes significant cuts in spending on data hosting, advertising and use of contractors.

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Zynga Inc (NASDAQ:ZNGA) Sues Former General Manager, Accuses Him Of Theft Of Sensitive Trade Information

Zynga Inc (NASDAQ:ZNGA) is getting back at a number of high-level employees, who have left the company. Zynga is filing a lawsuit against one of its ex general managers b y accusing him of extensive theft of some very sensitive and commercially precious data.

The complaint was filed in Superior Court in San Francisco on Friday. It was filed against Alan Patmore for misuse of trade secrets and contravention of written contract.

A spokesperson from Zynga has refused to comment on this matter. Alan Patmore has not yet responded to emails seeking comments.

In August, Zynga’s general manager of City Ville, Alan Patmore had left the company to work with a social games maker based in San Francisco. Patmore had joined Zynga in June of 2011 and had served as the general manager of City Ville before joining Kixeye as VP of Product. Kixeye happens to be a much smaller games developer of Facebook that has been immensely unabashed about recruiting talent from Zynga.

In the filling, Zynga has claimed that Patmore amassed about 760 documents from his work PC and backed them up online before he left the company. Also, Zynga has mentioned in its complaint that the information is crucial enough to improve a rival’s internal understanding of core game mechanics and monetization techniques, its implementation and eventually its market rank to compete more efficiently with Zynga.

According to Zynga, Patmore took files that are crucial to the business of the game maker. It includes monetization plans, revenue projections, over 10 unreleased game designs, planned road maps, Patmore’s whole email inbox and employee reimbursement details.

Zynga was at the court on Friday to get a temporary restraining order. A judge had granted the request, restricting Patmore from disclosing any data to anyone or from infringing the information or getting involved in activities related to making online games that include business secrets of Zynga.

Shares of ZNGA are down 0.74% to $2.41.

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Zynga Inc (NASDAQ:ZNGA)’s Shares Fell After Piper Jaffray Posted Its Survey Results – YELP, P

Stocks of Zynga Inc(NASDAQ:ZNGA) dropped nearly by 3.50% on Wednesday after Piper Jaffray estimated a decline in revenue for social gaming firms would take up pace next year, with lesser teens showing interest.

Michael Olson, an analyst, had downgraded the shares from ‘Overweight’ to ‘Neutral’. Piper Jaffray has surveyed more than 7,700 teenagers and came to the conclusion that their view of social gaming is more negative than it used to be before. Two years back, 56% of teenagers had said that they would lessen their social gaming time on websites like Facebook. This figure has increased to 90% ever since, as per Olson.

Olson has also noted that 60% of Zynga’s revenue comes from mature, waning games like Zynga Poker, City Ville and Farm Ville. He is now predicting an 8% decline in revenue in the upcoming year, as compared to the 2% reduction expected by most of the analysts.

The online gaming firm is trying to depend on Facebook games to games played on the smartphones. However, investors are being pessimistic. The shares hit an all-time low on Friday, at $2.21, after Zynga predicted a third-quarter loss. It is also taking a charge associated with its March acquisition of mobile gaming firm OMGPop.

Piper Jaffray has also noted some doubts on the potential success of City Ville 2, a sequel to its huge hit City Ville that had attracted more than 10 million users daily. City Ville 2 is essentially an updated 3D version of City Ville, however, it experiences headwinds as Zynga’s Web-based games business is facing challenges. Zynga’s strategy looks as if it still needs to be decided.

Shares of Yelp Inc(NYSE:YELP) fell 6.64% to $25.61 and Pandora Media Inc(NYSE:P) were down 3.50%

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Facebook Inc (NASDAQ:FB) Explores New Ways As Zynga (ZNGA) Wanes

It is evident that Facebook Inc(NASDAQ:FB) is trying out new ways to increase gaming on the platform as Zynga Inc(NASDAQ:ZNGA) persists on struggling.

Product manager of Facebook games and apps, Matt Wyndowe has recently spoken to Christian Nutt of Gamasutra about the future prospects of Facebook as a gaming platform and the strategy it uses for alluring more game developers.

Wyndowe disclosed that Facebook wishes to do more than it has done to allow synchronous gameplay on the platform. He said that it is on the to-do list of the things that Facebook would love to help enable.

He said that Facebook is keen on enabling synchronous gameplay. Obviously, developers can attain a lot on their end, however, there are a lot of features that the firm would love to put in its API to aid in enabling that kind of stuff. It is something that is a clear win for both developers and users. He also said that the firm has nothing to declare as of now, but whenever a group of developers start talking about it, it is included in the priority list.

The majority of games on the Facebook platform are asynchronous, which means that a user is not playing with someone in real-time but taking turns.

If the social networking site includes more resources into synchronous gaming, it will encourage users to spend more time on the platform that can mean more revenue for Facebook.

Considering that Zynga brought 20% of Facebook’s revenue and is presently tanking in the stock market, maybe it is not a bad idea for the social networking site to provide more incentives for developers to create games on the platform.

Zynga has said in a statement that it estimates revenue from bookings for the year to fall in the range of $1.085- $ 1.1 billion, due to lower than expected demand for online games. 

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Groupon Inc (NASDAQ:GRPN), Zynga Inc (NASDAQ:ZNGA) worst performing stocks So far This Year

Social media stocks Zynga Inc(NASDAQ:ZNGA)and Zynga Inc(NASDAQ:ZNGA), once the hottest Internet companies, are the worst performing stocks so far this year.

Groupon, which provides daily discount deals, raised about $700 million in an initial public offering last year and was valued at $13 billion.

Today the company’s valuation has dropped to $3.6 billion in terms of market capitalisation. The shares, which were offered to investors at $20 apiece in the IPO, have now dropped to $5.5.

Game developer and close ally of Facebook, Zynga raised $1 billion in its IPO in December last year and was valued at nearly $9 billion. Today that valuation has dropped to $1.8 billion, while the shares are trading at a dismal $2.4.

At the start of 2012 and just after going public, Zynga's chief Executive Officer Mark Pincus had said, "“Our goals were we want to raise a billion dollars. Through going public, we wanted to add some more great long-term investors to the company. All of that was successful.”

Zynga's investors would like to differ with that strongly. So far as they are concerned what the company has done is take their money and made them poorer for it.

Groupon and Zynga shares have depreciated by three-fourths since their debut. According to Forbes, their shares are now the worst performing among U.S. companies with market capitalisation of more than $1 billion.

There are just a couple of more months to go before the year ends and it does not look as if these two stocks are going to recoup their losses in hurry. In fact their claim to fame would be that 2012 will be remembered as the year when stocks of social media companies went bust.

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