Zynga Is More Vulnerable Than You Think

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Losing a key executive is bad enough. Losing a key executive responsible for key elements of your strategy is worse. Losing a key executive with broad strategic responsibility because said executive thinks a competitor's tech is better? Time to run for the exits.

According to TechCrunch, Zynga (NAS: ZNGA) has lost CTO Laurent Desegur to start-up Game Closure because its technology for creating mobile games is apparently too awesome to ignore.

"I vote with my feet. After first-hand experience with the Game Closure SDK and the people behind it, I knew that I had [to] be involved in the growth and refinement of the team and technology," Desegur told TechCrunch.


To be fair, he isn't slamming Zynga per se. But there's at least a hint of faint praise. After seeing the technology and evaluating it against what he had been working on -- specifically, directing all of Zynga's engineering efforts -- Desegur decided to make a move.

In good company?
Interestingly, Zynga and Facebook (NAS: FB) were also interested in Game Closure. TechCrunch says each company made bids for the start-up, which chose instead to take $12 million in new funding from a group of venture capital firms. 

Right now, that looks like the right move. Shares of Facebook and Zynga are crashing even as Game Closure is gaining interest for a development kit (i.e., the "SDK" referred to above) written in Javascript that allows coders to write and distribute apps to any platform.

The company calls its strategy "Games Everywhere," a possible nod to Sun Microsystems' messaging with the original Java programming language, which promised to help developers "write once and run anywhere." In this case, "everywhere" amounts to iOS, Android, HTML5, and Facebook. Windows Phone isn't mentioned among the list of supported platforms at Game Closure's website.

Color me thrilled by the prospects, even if it is a thumb in the eye of Apple (NAS: AAPL) . The late Steve Jobs actively discouraged developers from trying to build cross-platform iOS apps. Instead, he wanted coders writing directly to the iPhone programming interface.

Game Closure sees that as wasted work, and has come up with a solution to fix the problem. Bravo.

And Zynga? I'm not optimistic. The company, already bereft of original game ideas, badly needs as much programming talent as it can get its hands on. Desegur's departure only widens the gap.

Think I'm right? Wrong? Weigh in using the comments box below. And if you're interested in more social-media stock ideas, consider the Fool's newest special report, "Forget Facebook -- Here's the Tech IPO You Should Be Buying," which profiles a social-media stock that has an even longer runway for growth than either Facebook or Zynga. The report won't be available forever, so click here to get access today -- it's totally free.

At the time this article was published Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Facebook and Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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