peter alluded to this with the zynga farmville example. hypothetical that is. there is also the complexity of technology and specifically software these day. you think about i actually did work for a while at aol and time warner in the day and you think about the way aol used to ship product and peter can talk about that given his prior background but there are more discreet shipments and today there are code pushers every day. we push code every day. new lines of code written every day at facebook. there are no new products rolled out and subtle changes rolled out constantly. it is very hard for some people in different parts of the company to fully understand what exactly is going on with a product. most of this is irrelevant to -- it is just background, irrelevant to users, but it affects how things work and how the product works and you have to be very in the weeds to understand this, very in the weeds at the company to understand this and it is very difficult almost impossible for regulators to get a good grasp on this, and i think that's different even th

then there are games like zynga's farmville. users can play for free, but there's big money here, too. players can buy virtual goods with facebook credits, which cost real money. the social network's cut, 30%. on a limited edition farmville haunted house, that runs $7. facebook's take, $2.10. and with tons of virtual stuff sold every day, it adds up fast. in 2011 virtual goods in ads from zynga alone generated $445 million in revenue for facebook. with millions already buying those credits with credit cards, it paves the way for the social networks to move into other businesses. apps on facebook already allow users to buy streaming movies and concerts with facebook credits. one more way to get people to spend even more time on the social network. one potential threat to facebook's business model down the line, privacy concerns. facebook points to both regulatory changes, potential regulatory changes, as well as user concerns as one challenge to its business model down the line. carl. >> julia, privacy is one thing. but revenue s

investors watch as electronic arts struggles to compete with social games like zynga's farmville. expected to report $556 million in revenue down 26% from last year on 71% lower earnings per share of 4 cents. that's coming up against tough comparisons to last year ago's call of duty black ops. the stock is sure to move on guidance after hours. those numbers will be based on performance of diablo 3. listening very closely for any information on presales because the company might already have a sense of how well it will do as well as any commentary on their move into mobile gaming. >> julia, thanks. look at shares of pfizer at this point. the stock is down just about 0.5% at 22.10. the fda advisory panel is meet gt right now and reviewing the experimental arthritis pill. seema mody has more on that. >> that's right. pfizer is currently making the case for approval of its novel pill to the fda advisory panel. later this afternoon the panel will run through a series of votes and provide their recommendation. if approved, this drug could compete with the injectable drugs currently on t

the rest of facebook's revenue comes from its cut of payments for virtual goods and games like zynga's farmvilleebook takes 30%. zynga is hugely important to facebook's bottom line. it generated 12% of face back's revenue. another key is mobile ads. facebook just started putting ads on its mobile platform in march and mobile is where a lot of its growth is coming from. >> joining us for more is max wolf and david bloom is still here with us onset. so max, you like facebook. would you be a buyer? >> we think it's a compelling story. it's difficult to value. it's a one of a kind asset here. and i think somewhere about two weeks ago, it became a media and cultural if a nphenomenon and dangerous to chase it. so we like the company, with you as you see the growing offering, we have to figure out about we believe it can grow as fast as its offering. >> could the retail investor who maybe looks at facebook and piles in when shareholders are looking to get rid of their earnings, could that retail investor get burned given what you've described? >> absolutely. we think it's an important business model. w

better go with zynga, thought ashley. i heard of farmville, but there was another problem. 100 shares were nearly $1,000. so to make a bullish bet, ashley sold the july 9th strike put and collected $1. that dollar is the most she can make on the trade, but in order to keep all that money, she needs the stock to stay above that strike put price or above $9 by july. it gets better. that's because of the money she took. she can make money if the stock goes up, down, or nowhere at all. a buck for doing nothing? that sounds as believe as as an internet company of $100 billion. >> this seems like a big deal. >> what's the trade off? when ashley sold the put, she hoped the stock would go higher or stay above $9, but zynga shares fall below, ashley is obligated to buy zynga at that strike put price or $9. with the dollar she collected for selling that put. she couldn't begin to lose money until the stock falls below and that puts the price by more than a dollar that she put in or make money whether the stock goes up or down or nowhere at all. below $

zynga stock. it may not be farmville, but it is on the social media giant and show you how you can get paid too. why are the traders wading into the digital river? "options action" begins now. >> world's largest equity options exchange. these are the traders here in new york's times square. jpmorgan is taken to the wood shed on the $2 billion loss. fitch downgrading the long-term credit rating and the stock is falling in the after hours. the question s is there a new best in breed in financials? let's give them the money and find out. dan, this is early similar to what happened not too long ago to another financial out there. >> it's an interesting point. when you think about goldman sachs, they came out of the crisis and goldman was reaching some precrisis levels in the stock in april of 2010 and then the sec makes these charges about this and all of a sudden the stock got slammed. there is the chart. the thing that's interesting to me t 4 less to do with the fundaments of goldman sacks and more into a pr war against the company and a sediment trade stuck in there and since then, it never recov

the one percenters once to serve 22 million people that play "farmville" on facebook and elsewhere every month. american express and zyngafor a card that awards "farmville" points when you use the card to buy something. for singh fwa a way to stretch the "farmville" franchise which is getting long in the tooth. ad revenue made up less than 10% of $300 million that zynga raked in last quarter. the rest of the sum came from selling online virtual goods that don't exist in real life which actually is kind of weird. for american express the new prepaid "farmville" card is a way to boost underlying financial network which already handles $800 billion a year in purchases. amex typically does awards cards with likes of mercedes-benz. cards aimed with the swells with zynga. amex taps 290 million users that play zynga games every month. "farmville", citiville, words with friend. no words how many points amex will require to purchase the virtual tractor to plant the non-existent crops on the nonexistent farms. jon: i like points i can use. whatever, i don't play "farmville". some folks like it. dennis kneale. thank you. >> reporte

so again the thought experiment i would give you is if you thought of a company like zynga with the game of farmville and you say we have to take that through fda approval before we allow them to produce the game and see whether we have to have a phase, maybe we'll skip the animal trial and let's go straight to the phase 2 and phase 3 trials and you have to test for efficacy and safety. so you have to test is it actually safe for people to use? you have to have a double blind tests with lots of different people and then you have to have a test for efficacy. does it actually improve your brain functioning? if it doesn't do that, you can't do it and if you change one line of code you have to start all over from scratch. you would not have a video game industry in this country or any entertainment industry if you had that. i think there has been sort of a catastrophic set of government policies basically destroyed most of technological innovation and we see this in manifesting itself in an economy with stagnant wages, median wages flat since 1973 and increasingly broken political system which is becomin

what is the slow pace of regulation, peter alluded to this with the zynga farmville example. hypothetical that is. there's also the complexity of technology, specific of software these days. you think about, i actually did some work fo for a while and aol time warner back and do anything think about what a love used to ship product and peter can talk about this, given his prior background, but they were more discreet shipments here. today to push his everyday. we push for every single day. new lines of code written every single day at facebook. there are new products rolled out, and subtle changes of products rolled out causally. and it's very hard for some people in different parts of the company to fully understand what exactly is going on with a product. most of this is irrelevant, it's just background, irrelevant to users but it is, in fact, how things work, how the product actually works. you have to -- very in the week at the country to understand this. it's very difficult almost impossible for regulars to get a good grasp on the. and i think that's different than even

zynga makes offline games, such as the popular farmville any facebook. 90% of zynga's revenue is tiedis down 13%, halted trading at $7. facebook up 6%, trading at $42. >>> it will be sunny today, nice, a little warmer on saturday. some fog works it's way back to the coast sunday. cooler monday and tuesday. >> that will do it for us. thanks for watching, everyone. have a great weekend. >> bye, now.

zynga, which is a game developer of games like farmville, which are very popular on facebook, is a significant source of revenue, but advertising is the primary source of revenue. and i had i it's fair to say it will continue to be that way. there's a lot of debate over the efficacy of facebook advertisements. gm pulled out. that's still an open question. anecdotally i've also heard very pod things. if you like a brand on facebook you're essentially signing up to receive constant engagement from them. i know that people have referred to it as a branding tool rather than a marketing tool. perhaps that's a nuance that's beyond most of the viewers' interest. but i do think that there is unrealized potential there. people spend more time on facebook than any other portion of the internet. and so that's a captive audience. >> what about when it comes to cyber security? has facebook in the past cooperated with government agencies as far as giving information? we've seen these stories about verizon and at&t and google, et cetera, sharing information with government agencies. >> i haven't seen the spe

zynga? >> a lot of people might be familiar with words with friends, draw something, farmville, citiville.s to work. it's like a six-story amusement park. you're going through a light-up tunnel. and the people to dog ratio. for every nine people there's one dog. there's also a kitchen, an you was bar, a sweet shop. there's a basement rec room with arcade-style games, ping-pong, a full bar, shuffle board, vintage arcade games. also a full gym and wellness center. also 100-person ampitheater. a genius bar, so if you have any problems with your computers, you can walk right up and they'll solve it for you. and there's a mother's room to take care of all of your mom needs. >> i just hope they're setting the trend for the rest of us. eventually that will make its way across the rest of the country so we'll have swings and slides and the bartender. i love that. seriously. think that's going to work out? >> i think so. i think we should

zynga? >> a lot of people might be familiar with words with friends, draw something, farmville, citiville.s to work. it's like a six-story amusement park. you're going through a light-up tunnel. and the people to dog ratio. for every