BUSINESS

Facebook bot suspicions; EA exec disses Zynga for “hitting the wall”

TAGs: bots, Electronic Arts, Facebook, social gaming, Zynga

facebook-bots-zyngaShares in social network Facebook dipped as low as $19.83 on Thursday before closing out the day at $20.04, off 4%. At this point, you have to figure Zuckerberg & Co. are just hoping to get through Friday without falling below that psychological $19 barrier, which would represent a 50% haircut from the $38 IPO price (which was only two months ago). But the bad news just keeps on coming, as company filings this week revealed that almost 9% of Facebook’s 955m active accounts are illegitimate – duplicate profiles, personal profiles for businesses or pets, and accounts with fake names set up primarily for spamming purposes – which further calls into question the value of advertising on the platform.

Worse, Limited Run (formerly Limited Pressing), a digital distribution outfit that caters to music labels, artists and designers, made waves late last week by claiming that its own analytics software had determined that 80% of the clicks on its adverts within Facebook came from bots. In a widely distributed post on its FB page, Limited Run said: “Bots were loading pages and driving up our advertising costs … Do we know who the bots belong too [sic]? No. Are we accusing Facebook of using bots to drive up advertising revenue. No. Is it strange? Yes.” Limited Run’s post ended by encouraging people to connect with them via Twitter, “where we don’t get shaken down.” Zing! Facebook subsequently released a statement saying it was “investigating” Limited Run’s claims.

Continuing our social media deathwatch, Zynga shares lost slightly less than 4% on Thursday to close at $2.70. The question is, will Zynga be able to stage any sort of significant rally before Aug. 16, when another stock lock-up period expires, allowing Zynga employees to dump another 150m shares onto the market? (Excuse us while we check our Biz 101 textbook for that ‘supply v. demand’ section.)

Game publisher Electronic Arts (EA), which has provided the (ahem) inspiration for a few Zynga titles, also saw its stock fall over the past month, but by a comparatively paltry 7.5%. (Since April, EA has dropped 30%, while Zynga has lost over 78%.) COO Peter Moore told Bloomberg his company hadn’t been negatively affected by the Facebook algorithm change that Zynga CEO Mark Pincus blames for Zynga’s recent woes. Moore credited his company’s diversification for insulating EA from much of the carnage Zynga is experiencing, making the analogy that if this were the Olympics, EA would be a decathlete: if they do lousy in one event, they’ve got nine others to make up the difference. Zynga, by comparison, “is running a marathon. They just hit the wall and dropped to their knees.” He neglected to add ‘while you’re down there, Pincus, you mind blowing me?’ but based on EA’s recent promo (below), we assume he was thinking it.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com