Will Zynga Inc (NASDAQ:ZNGA) Survive Without Facebook Inc (NASDAQ:FB)?

Posted by Lynn Eisler September 27, 2013 0 Comment 6046 views


The fact of the matter is that Zynga Inc (NASDAQ:ZNGA) created its vast customer base and popularity quotient by creating numerous online games especially for the Facebook platform. However, somewhere down the line, Facebook Inc (NASDAQ:FB) transitioned to the current “Timeline” layout. The latter’s users have lauded and castigated this change. But the flipside is that Zynga Inc (NASDAQ:ZNGA) has been affected too.

Business model suffers

The company’s business model took a big blow and its stock suffered as well. Zynga’s online games were a staple on the social networking platform. Ever since Facebook moved to the “Timeline” format, these games got shuttled into the shadows. In fact, many users could not even locate the games. Even if they did, they found the entire process so troublesome that they felt the effort was just not worth the hassle.

The downslide

And slowly but surely, players stopped bee-lining for Zynga Inc (NASDAQ:ZNGA)’s games and the company obviously took a major hit. Over the last year, the company’s shares had been trading at $16.00/share. In Thursday’s trading session, Zynga Inc (NASDAQ:ZNGA) stock dropped by 4.62% to a close of $3.61. The 52-week low of the shares is $2.09 and the 52-week high is $4.03. These figures speak for themselves.

The one way out

No doubt, the company has been trying to diversify and is offering mobile games to leverage the growing mobile usage trend and it has been making some progress without any FB support. Now, the latter is also more reliant on business from mobile users. Zynga Inc (NASDAQ:ZNGA) definitely pulls in some revenue by selling games on mobile devices but Facebook Inc (NASDAQ:FB) will have to sell advertisements in that very same space.

In order to gain an upper hand, Zynga Inc (NASDAQ:ZNGA) will have to launch an aggressive strategy to beat Facebook Inc (NASDAQ:FB) in the mobile domain. That is probably its one and only hope for revival and survival.



About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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