Zynga Pursues Mobile Growth Strategy with Acquisition of Five Mobile

Head upon the heels of its July 1 IPO announcement, Zynga announced the acquisition of Canadian mobile application development firm, Five Mobile on July 8. Five Mobile specializes in developing mobile applications for the iPhone, Android and Blackberry platforms. The deal marks Zynga’s 15th acquisition in 13 months, and represents an aggressive move to diversify from the Facebook platform and capitalize upon the increasing popularity of mobile platforms for gaming purposes. Zynga noted that “Continue Mobile Growth” constituted a key component of its business strategy in its July 1 S-1 filing as follows:

Words with Friends is one of the leading social game franchises on mobile platforms. We believe there is a large opportunity to extend our brand and games to mobile platforms such as Apple iOS and Google Android. We will continue to make our games accessible on a large number of mobile and other Internet-connected devices and invest in developing and acquiring mobile development talent, technologies and content. Our DAUs on mobile platforms grew more than ten-fold from November 2010 to June 2011.”

The acquisition of Toronto based Five Mobile gives Zynga access to customers, products, talent and a base for its expansion in Canada. Five Mobile’s founders, Ameet Shah, Jeff Zakrzewski, Oliver Tabay, and Troy Hubman, will all join Zynga as part of the team of the renamed Five Mobile entity called Zynga Toronto. Five Mobile’s Managing Partner Ameet Shah will direct Zynga Toronto and report to David Ko, director of Zynga’s mobile operations. Zynga’s acquisition of Five Mobile promises to change the dynamics of the competition for engineering talent between Toronto and Waterloo. For years, Waterloo served as the hub of the startup community in Ontario due to the presence of companies such as Research in Motion (RIM), maker of the Blackberry product line. RIM brought an estimated 9000 employees to Waterloo and created a ripple effect on related companies and tech startups in the city. Zynga’s acquisition of Five Mobile recognizes the talent based in Toronto and promises to transform the geography of talented technical labor in Ontario, particularly given the recent interest of global companies interested in startups in the mobile and social media space.

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