CEO calls Zynga his 'crowning achievement'

— -- SAN FRANCISCO — Before Zynga traded its first share on Friday, nervous investors in the social-gaming company didn't know whether to expect a killing or to be killed.

Everyone, that is, but Mark Pincus. He didn't become the founder and CEO of the Internet's latest monster IPO by being timid or lacking verve.

"Zynga is the crowning achievement for my career," Pincus said in a phone interview here from Zynga's headquarters shortly before the company's Nasdaq debut. "I wanted to build a company, products and culture that mattered. It is an extension of all of us."

The highly anticipated IPO stumbled out of the gate. Zynga lost 5% in its market open. But it raised $1 billion, creating a $9 billion market value for the company, in the Internet's biggest stock offering since Google in 2004.

"This is a (seminal) event for an Internet boom," says John Doerr, a partner at Kleiner Perkins Caufield & Byers, the largest venture investor in Zynga, who spoke before Zynga started trading. "Zynga's IPO is a commencement of a new phase (for Internet companies), and a springboard for the company."

The lackluster IPO will likely draw questions whether the opposite is true, raising the specter of another Internet crash. Zynga could at the very least be a harbinger for the IPO prospects of Facebook, a key business partner of Zynga that is expected to go public in the first half of 2012. Both sky-high valuations — Facebook is at around $80 billion now — raise typical questions about financial hype.

But despite nearly two decades of success in Silicon Valley, Pincus is not your typical tech CEO. In a field full of twentysomething leaders, Pincus, 45, could be Facebook CEO Mark Zuckerberg's father. (Zuckerberg is 27.) Further, Pincus' moment isn't in games just by happenstance.

"Mark has been through every step of the process, and drawn every single lesson," says Marc Andreessen, a venture capitalist and co-founder of Netscape who has invested in Zynga. "Zynga is the culmination of the work he has done the last 20 years."

Pincus didn't just make popular games. He relentlessly monitored data on traffic, user behavior and employees, drawing on investment-banking chops. Zynga's sales more than doubled through September, to $829 million, and it has earned $121 million since the start of 2010, according to its SEC filing. What's more, the top five games on Facebook are Zynga titles: CityVille, CastleVille, FarmVille, Zynga Poker and Words With Friends.

About 3% of Zynga's estimated 240 million players pay for virtual goods, such as a cow in FarmVille or a machine gun in Mafia Wars, according to Zynga.

"Companies like ours show that consumer Internet services can be profitable," Pincus said.

The boyish-looking Pincus, nicknamed "Pinky" by his wife, Ali, on her Facebook page, has Zynga squarely under his thumb. He owns 38.5% of Zynga's voting power and exerts as much control over the business. Zynga's stock structure gives Pincus his own class of C shares that carry 70 times more voting power than regular A shares.

No matter how Zynga stock fares — and many may openly wonder after its underwhelming first day of trading — Pincus will make out handsomely. His stake? More than $1 billion, by some accounts.

Risk taker

The fortunes of Zynga's offering are as much a referendum on Pincus, its flashy leader, as the culmination of his rip-roaring narrative in the tech world.