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Zynga R&D, Marketing, Infrastructure Costs Soar In 2011

Zynga R&D, Marketing, Infrastructure Costs Soar In 2011

July 1, 2011 | By Kyle Orland




Zynga is spending an increasingly large amount of money on R&D, marketing and infrastructure, newly revealed data from today's IPO filing shows, with spending in all three areas more than doubling from last year in the first quarter of 2011.

Spending on R&D was $27.9 million in the first quarter of 2011, up 158 percent from the year before, while marketing costs for the quarter were $40.2 million, up 130 percent from 2010.

Both costs were dwarfed, though by a staggering $119 million spent on servers and other computers for the company in the first quarter of 2011 alone. That number exceeds infrastructure spending of $84 million for the entirety of 2010.

Despite the rising costs, Zynga still saw a profit of $11.8 million for the quarter, up 84 percent from the same period in 2010. The company was also sitting on a huge cash stockpile of $738 million as of the end of 2010.

A huge majority of Zynga's revenue now comes from social good sales, which represented $575 million for the company in 2010. That's compared to just $22.8 million in revenue from advertising in 2010, a 36 percent decline from 2009.

Executive salaries represent a relatively small portion of Zynga's total spending, with CEO Mark Pincus making just $300,000 before bonuses and stock compensation.


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