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Cowen Group Senior Research Analyst Doug Creutz on the outlook for Zynga and whether the company’s earnings will be a predictor for Facebook’s IPO...
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-- Zynga is set to report quarterly earnings -- for the first time since going public in December.
-- the stock closely linked to the much anticipated FaceBook IPO Wall Street is going to be watching.
We thought we bring in a day before all of the news a preview of what to expect from the social gaming company.
Doug price is senior research analyst at -- -- first of all -- let's get your opinion on the stock of how do you like it what's your column it.
Or not a huge fans think your stock really because of the valuation of trading at a very high multiple of earnings for.
Companies essentially contact company I think that they're a little bit of a misnomer people call an Internet company and certainly -- gains are on the Internet.
But their business is making in monetizing gains and generally content company stocks traded.
Lower multiples awards and is right now.
OK they've just gone public we should let people know in the past couple of months and therefore.
At first they weren't doing well and then suddenly as soon as FaceBook announced an IPO Xena took off like -- bat out of hell of me that was pretty impressive but is -- much behind it.
Well I think people are doing the oldest leader in the space is going public at this big multiple but we can put a -- -- formal the other.
It's of similar companies not just think -- took off but also companies like Groupon and when can also had a big move since the FaceBook IPO was announced.
And the question is whether that will be sustained after faced FaceBook actually goes public and that catalyst sort of plays out I tend to be a little skeptical -- we'll -- You know people are looking at one or the other to get clues about what's gonna happen Wear them.
Some people are looking at Zynga add to see how how FaceBook -- -- be doing.
Other people are looking at that at the FaceBook filing to see any details about Zynga.
Is there anything to be -- there.
Yes some people tried to look at Facebook's numbers which they reported for the entire county -- 2011.
And in Q what they thought fingers Q4 numbers are gonna look like -- argue if there was just too many moving parts of really good get a good read on that.
On the other hand when -- reports that's whatever they report is already essentially embedded in Facebook's numbers.
I think the one thing I'd say about Zynga -- -- -- we have that our read was that although.
-- account for 12% of Facebook's revenue during the entire year it appeared to us as if that number was decreasing during the years that by the end of the year may have -- that -- Well is it of shattered this farm bill thing I just to see people.
Here in the Greenberg jumping of the computer to bite to pixelated cows communal thing I just don't get it but and now I don't see that anymore.
-- well I don't know that I'd say it's a fat mean I think Zynga and I would also say things like Iowa -- an android have really expanded.
Gaming on to new platforms into new markets that.
War really gaming markets before you know this is not the average call of duty player who's going on farm bill -- words of friends.
But -- and it's a very competitive market -- one it's evolving very rapidly.
And so although I think that that market is real and there's -- money diminish the name.
I think -- -- ability to maintain its leadership position will be very difficult done I gotta ask one quick question what about gaming what about real gambling if if real gambling is allowed on the Internet -- -- -- and a great position.
To take advantage of it.
-- it's -- for -- it's been talked about is that there's there's been some indications -- -- government they may -- -- -- legalizing over the -- think it does have a very popular.
Virtual poker game on FaceBook and on on mobile platforms.
But I would -- that if they were to go in that direction that would be a very very different business in the business are now.
Old one that requires a whole different sort of confidence -- one that would bring -- a whole new set of competitors through of course.
I would assume the casinos wouldn't sit on their hands -- this happened and they would probably wanna coming content so.
There is an opportunity there but I think it's one that that could be difficult for -- to -- exploit fully.
-- great to see thank you very much -- -- -- -- like.
