Investors didn't appreciate Zynga's
The social gaming giant hopes that a revenue-padding marketing deal with DreamWorks Animation
DreamWorks Animation wants to promote Madagascar 3: Europe's Most Wanted, which is hitting theaters in two weeks. Paying Zynga for posting display ads and promoting video trailers for the computer-rendered flick may seem like obvious marketing moves, but Zynga's Draw Something offers advertisers something that other promotional outlets do not: a starring role.
Draw Something is a Pictionary knockoff with a social gaming bent. Players get a choice of three words and then have to draw one using a limited number of colors. Don't be surprised if some of the Madagascar animals -- or even some of the countries featured in the movie -- begin to pop up as word choices.
Sponsored word choices? Talk about the mother of all product placements.
Zynga hinted at this tactic earlier after shelling out $183 million for the game maker. It sounds smart. The rub is that engagement metrics for the game are trending lower. Usage on Facebook
The title's popularity also seems to be fading on mobile. As of this morning, the game that was once on top of Apple's App Store chart is now down to No. 25 for the free ad-supported version and No. 14 for the premium $1.99 version.
Zynga apparently bought OMGPOP just as Draw Something was peaking. It was easy to see this coming. Anyone who has played the game even casually knows that it's a mess. Drawing can be a chore on small smartphone screens, and a lot of people just cheat by scribbling the words that they're supposed to be depicting.
The silver lining for Zynga investors at this point is that the stock has shed nearly $5 billion in market cap since the $183 million purchase of OMGPOP, so obviously this is no longer a case of the company overpaying for an acquisition.
Zynga is also striking deals that may seem silly to the outside world -- like today's DreamWorks Animation deal and its recent partnership with American Express
It's a wild world out there, but a caged Zynga isn't ridiculously overvalued anymore.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.