Mark Pincus, along with his bulldog Zinga and 20 more guys, regularly played soccer at San Francisco’s Golden Gate Park for years. Now, Pincus is the CEO of online games developer Zynga Inc. whose shares in an IPO this week on the Nasdaq stock exchange were valued at $9 billion.
Pincus, described to be a control freak, retains company control even after it goes public. Special shares class allows him 37% voting power even if his equity stakes is reduced to 12%. He is quick to recognize new trends though and is passionate about expanding Zynga which gives him an edge to be among Silicon Valley’s elite. Tribe.net founder Chris Law calls Pincus as someone who plays to win and always comes up with new ideas. Popular Zynga games on Facebook include “Farmville” and “Mafia Wars”. Sales of virtual houses, poker chips and other items used in the games earn money for Zynga. Zynga’s IPO at $925 million is said to be the largest since Google Inc’s $1.7 billion in 2004 which grants Pincus C shares with voting power that is 70 times stronger than A shares. Some company insiders own B shares with a voting ratio of 7 to 1. Other companies like LinkedIn Corp’ voting ratio is 10-1 compared to Pincus’s 70-1.
Apparently, Pincus’s Support.com experience caused his ruthlessness for control. Pincus co-founded Support.com (now SupportSoft Inc that went public in 2000) but he was dismissed after a conflict with capitalists. Venture backer Bruce Golden of Accel Partners said Pincus’s departure was harmonious as Pincus wanted to pursue other entrepreneurial interests.
Pincus’s voting power and his control freak reputation made The New York Times write an article about the “data obsessive” man who, they said, tracks employees like Big Brother. Law recalls how he and Pincus argued for weeks about where to place the website’s log-in box. Pincus was so intense about it which was both draining and energizing, added Law. He said Pincus’s Zynga control desire shows his care for the company. Pincus is likened to Apple’s Steve Jobs, both obsessive but visionary. He may have earned criticisms from the venture capital community. But in a meeting with potential Zynga capitalist years ago, a partner advised the capitalist to keep mum on Pincus’s control hunger as Pincus is expected to make them a lot of money.
Pincus, whose career was not entirely technology-devoted, dismisses the autocratic regard about him. He is not as popular as Facebook’s Mark Zuckerberg, Twitter’s Biz Stone and Evan Williams or Google’s Larry Page and Sergey Bin but they all share a singular vision. He may have predicted social network’s revolution before anybody else saw it happening and invested in Napster, Facebook, Twitter and Friendster. He focused on Zynga’s games on Facebook platform, a risk questioned by rival Activision Blizzard Inc. In April 2007, “Texas HoldEm Poker” was released under Presidio Media, later renamed to Zynga after securing $10 million funds. Today, Zynga shares’ price is 9 times its whole year’s sales compared to Activision’s 3 times of 12-month sales.
Pincus said he played “Rise of the Nations”, an Internet game where kids beat him. He wished then that he could buy tools to make him win and so the Zynga idea came up. While with Tribe, Law said Pincus knew how South Korea companies made money with virtual gifts and wanted to experiment on it. Still, analysts question the business life on Facebook where almost all revenues come from. Out of over 240 million players, less than 3% purchase virtual items. From $47 million, net income was reduced to $30.7 million during the first 9 months compared to last year that Zynga invested on new games to expand internationally. On IPO presentation, Pincus has to convince investors that Zynga is capable to be Facebook-independent.
Zynga’s first phase earned criticisms as Pincus admitted to have funded the company himself to immediately get revenues and in an attempt to control his destiny. Greg Cohn, a former Yahoo Inc and Zynga said that Pincus’s aggressiveness was understandable as it was an entrepreneur’s job. It was clear how Pincus recognized an open platform’s potential, he added. In September, Forbes estimated Pincus’s net worth at $2 billion which could change after the final IPO price. Silicon Valley IPO adviser Lise Buyer said Pincus surely will call the shots going forward and will keep up or stay ahead of the competition.
The IPO will come on Thursday December 15th, 2011, the ticker symbol will be called “ZNGA”.