Zynga’s Mattrick to Cut 15% of Staff

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Jan. 31 (Bloomberg) –- Bloomberg’s Cory Johnson discusses Amazon’s profit trailing estimates, Zynga’s staff cuts and Microsoft’s CEO search. He speaks with Erik Schatzker on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

Well, and possibly microsoft.

But amazon, the behemoths of the e-commerce industry, beloved by many -- and for good reason, right?

Things are cheap and if you sign up for amazon prime, most everything arrives at your door and does not cost -- arrives at your door in two days and does not cost any more for shipping.

They had a very strong quarter.

25 billion dollars in revenue, but people are disappointed.

The stock is insane.

It had demonstrated at about 1000 times earnings.

The next p/e ratio even close to that is adobe at 100 times earnings.

The stock was priced to perfection, as the cliche goes.

And it was 30 times earnings.

And there was also the belief that it would be a good quarter because traffic is so high on the site.

The unit sales were not as strong as they had hoped.

That said, the business grew at more than twice the pace of the clock -- of e-commerce in the fourth quarter.

And gross margins, an elusive thing for amazon, got a little bit better.

But that is not their game right now.

Their game is growing their business and they think they will do it for many years to come by going through -- growing through lots of different areas.

And not i spending, but spending in that order.

Let's talk about amazon prime.

Do you have it?

I do.

There are probably boxes showing up at my house in california right now.

Today's shipping on just about everything -- two days shipping on just about everything.

But it has been thought to be a money loser for them.

Up to $2 billion a year from what i've seen.

They talked in the conference call about the possibility of raising the fee.

By $20 to $40. and that would make a significant difference in the, got forget -- god for bid, operating cost of this company.

A guy came over for microsoft into zynga and he's making changes, including getting rid of some staff.

They went through a crazy hiring spree before the selloff.

There was a crazing selling spree in the secondary offering.

But the remaking of this company is well underway.

These layoffs have seem to have shore them up to help them survive and maybe make money some day.

There is an acquisition of the company called natural motion.

They raise a ton of money in the ipo, as much as the insiders for selling and the outsiders were buying.

One of the things that we have really learned from zynga is that the game business is hit driven, even online.

When those games are no longer hot, they've got to go back to rebuild new games.

They have not always been good at that.

Do you play csr racing or clumsy ninja?

I am known as a clumsy ninja, but i have not played it.

Those are the two titles they are picking up with this company, natural motion.

But before we talk about microsoft, jon erlichman, our colleague, was to broke the story last night.

The board has pretty much settled on satya nadella, the guy who runs the cloud services business at microsoft, as the next ceo to replace steve ballmer.

And perhaps more broadly, bill gates may no longer be chairman of the board.

And he may not even stay on the board command fact.

We do not know what will happen with that.

The collection of satya nadella makes it easier for -- the selection of satya nadella makes it easier for the needs to step away.

There were other insiders being considered.

Tony bates was being considered.

But this guy is truly a technologist.

And therefore, maybe product focused first.

And that will make some unlike the dates, who is truly technology focus, a little bit more -- feel a little more easilyy.

We will do even more on "bloomberg west." is a topic that merits discussion.

It is not like microsoft is a small company.

And it is not a small matter.

I was like to say that if people are running a pc, they

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