Zynga loses Facebook’s favor, shares drop 7%

Nov 30, 2012
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Zynga and Facebook aren't the bosom buddies they used to be, and as a result, Zynga's shares are down 7-percent. This comes after a regulatory filing revealed the contract between the two companies has loosened their ties quite a bit. Among other things, Facebook will be able to start producing its own games for the social network next year, something it previously was not able to.

Zynga is no longer contractually bound to exclusively provide its games on Facebook, nor to give Facebook any exclusive games. Likewise, the company is no longer required to have Facebook advertisements on its properties. For Facebook's part in this, although the social network is now allowed to produce its own games, it stated the it does not have plans to do so.

This, of course, boots Zynga from the Facebook pedestal upon which it perched, wherein it previously had a special status with the social network. While the company has been taking steps to become more independent, it garners most of its revenue from Facebook, making this move a bit precarious. The relationship is symbiotic, however, with Facebook also making a decent amount of revenue from Zynga, although the amount has dropped almost 50-percent in the last year.

Zynga has been under fire lately for its quiet layoff that took place during Apple's event last month. Employees were backhanded, given only two hours to pack up their stuff and get out. This came after reports that the company experienced a $23 million loss in the second quarter of this year.

[via Wired]


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