Zynga buys 12 companies for fraction of what Disney spent on Playdom

Has Disney been shopping in the wrong places? VentureBeat reports that Zynga spent a total of $123 million in cash and stock for 12 companies over the past year.

That number is about a seventh of what Disney paid--around $763 million--for a single company, Playdom. Not to mention that it's a third of what EA paid for Playfish in 2009: around $400 million.

Of course, Zynga has bought considerably smaller companies, but it's also a sign that Zynga has been far more savvy in its purchases (and its uses for them) than its competitors. The most it paid for a studio was $53 million for Newtoy, the creators of Words with Friends and now Hanging with Friends under the big red dog.

Zynga just filed for IPO last week, valuing the company at nearly $20 billion, which is far more than the two most valuable gaming companies in the world, EA and Activision Blizzard. These small time purchases-turned-big time hit machines is surely a lynch pin in Zynga's strategy--though snagging a few major league execs helps, too. Perhaps the competition should consider going small instead of, say, eying up PopCap for $1 billion.

[Image Credit: Mashable]

Do you think Zynga's strategy for acquiring companies is more sound than the competitions? How do you think EA and Disney will respond to Zynga's IPO?

Zynga CEO's memo to employees: 'We have nothing to hide in our past'

The big red dog bites back. FarmVille maker Zynga came under fire recently from a Wall Street Journal report that claims CEO Mark Pincus and other executives asked early employees for their unvested stock or face termination. Now, Pincus has responded. Well, not directly, but to his employees. Fortune acquired the Zynga chief's memo to his staff of 2,000 plus.

"The wall street journal posted a story last night (copied below) which paints our meritocracy in a false and skewed light," the memo reads. "The story is based on hearsay and innuendo which is disappointing but is to be expected as we move towards becoming a public company."

The guy has a point: The media has employed a laser focus on Zynga since it revealed its intent to file for its initial public offering (IPO), but this report is by far the most ... unfortunate. Before receiving the memo, Fortune issued its own response to the WSJ report, looking to downplay the severity of the issue.

As the memo reads on, Pincus reminds his employees of Zynga's core values. More importantly, the Zynga chief says that Zynga has "nothing to hide." (But we're reminded of a certain TechCrunch story and video.) Read the memo in full below:

    Team,

    The wall street journal posted a story last night (copied below) which paints our meritocracy in a false and skewed light. The story is based on hearsay and innuendo which is disappointing but is to be expected as we move towards becoming a public company.

    We have nothing to hide in our past and present policies and I am proud of the ethical and fair way that we've built this company. As many of you have heard me say -- we're building a house that we want to live in.

    Being a meritocracy is one of our core values and it's on our walls. We believe that every employee deserves the same opportunity to lead. Its not about where or when you enter zynga its how far you can grow. This is what our culture of leveling up is all about and its one of our coolest features.

    we want everyone to put zynga first and contribute to the overall success of our company and all of you have.

    thanks,
    mark

What are your thoughts on the WSJ report? How about Pincus's response?