Zynga 2014 Annual Report Download - page 25

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Table of Contents
Our business will suffer if we are unable to successfully acquire or integrate acquired companies into our business or otherwise manage the
growth associated with multiple acquisitions.
We have acquired businesses, personnel and technologies in the past and we intend to continue to evaluate and pursue acquisitions and
strategic investments. These acquisitions and strategic investments could be material to our financial condition or results of operations.
Challenges and risks from such investments and acquisitions include:
22
•
negative effects on products and product pipeline from the changes and potential disruption that may follow the acquisition;
•
diversion of our management
’
s attention away from our business;
•
declining employee morale and retention issues resulting from changes in compensation, or changes in management, reporting
relationships, or future prospects;
•
significant competition from other game companies as the social game industry consolidates;
•
the need to integrate the operations, systems, technologies, products and personnel of each acquired company, the inefficiencies and
lack of control that may result if such integration is delayed or not implemented, and unforeseen difficulties and expenditures that
may arise in connection with integration;
•
the difficulty in determining the appropriate purchase price of acquired companies may lead to the overpayment from certain
acquisitions and the potential impairment of intangible assets and goodwill acquired in the acquisitions;
•
the difficulty in successfully evaluating and utilizing the acquired products, technology or personnel;
•
the potential incurrence of debt, contingent liabilities, amortization expenses or restructuring charges in connection with any
acquisition;
•
the need to implement controls, procedures and policies appropriate for a larger public company at companies that prior to
acquisition had lacked such controls, procedures and policies;
•
the difficulty in accurately forecasting and accounting for the financial impact of an acquisition transaction, including accounting
charges and integrating and reporting results for acquired companies that do not historically follow U.S. GAAP;
•
under purchase accounting, we may be required to write off deferred revenue which may impair our ability to recognize revenue that
would have otherwise been recognizable which may impact our financial performance or that of the acquired company;
•
risks associated with our expansion into new international markets and doing business internationally, including those described
under the risk factor caption “
Expansion into international markets is important for our strategy, and as we expand internationally, we
will face additional business, political, regulatory, operational, financial and economic risks, any of which could increase our costs
and hinder our efforts
”
elsewhere in this Annual Report on Form 10
-
K;
•
in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the
particular economic, currency, political and regulatory risks associated with specific countries;
•
in some cases, the need to transition operations and players onto our existing or new platforms and the potential loss of, or harm to,
our relationships with employees, players and other suppliers as a result of integration of new businesses;
•
in certain instances, the ability to exert control of acquired businesses that include earnout provisions in the agreements relating to
such acquisitions or the potential obligation to fund an earnout for a product that has not met expectations;