Sunday, December 2, 2012

Zynga’s Changing Facebook Relationship May Not Be Such a Bad Thing

Becoming less reliant on Facebook may ultimately not be such a bad thing for Zynga .

Zynga shares are sliding today in the wake of last night’s disclosure that the social gaming company and Facebook are changing the rules of their relationship. Zynga says it will now be able to host its Web games outside of Facebook’s platform, suggesting less of a reliance on Facebook.

At the onset, that doesn’t sound like such a good development. Shares are down sharply, mainly since the new arrangement leaves the potential for Facebook to produce its own games and become a direct competitor to Zynga.

But analysts are taking the glass-half-full approach about the future prospects for both companies. “Zynga now has an incentive to expand the reach of its most popular social games beyond Facebook and Zynga.com and be able to offer additional payment options, likely resulting in additional payers who are not Facebook users,” says Michael Pachter, an analyst at Wedbush Securities.

Keep reading…

Read also:

Facebook changing Zynga terms heats up social games competition (Washington Post)

Fiscal cliff? Zynga faces the Facebook cliff (MarketWatch)

Facebook: SEC Should Investigate the Pump and Dump (Huffington Post)

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