Social networking site Facebook Inc(NASDAQ:FB) and
game developer have a symbiotic relationship with each other.
Their shares rise and fall in tandem.
Late Thursday Zynga Inc(NASDAQ:ZNGA)said that it would
be reporting weak quarterly earnings and revenues and also cut the earnings
forecast for the full year. Zynga provides the popular `Farmville' game for
Facebook as well as other social games
Zynga shares fell and on Friday it closed down nearly
12 percent at $2.48 a share. Shares in Facebook also slumped in sympathy and
ended down 4.7 percent at $20.91 on Friday.
A significant portion of revenues of Zynga is
generated from Facebook and any problems that Zynga faces is bon to have a
spin-off effect on Facebook as well.
In fact recently Zynga has been trying to reduce its
dependence on Facebook by creating games that are not for the Facebook platform
and has also made an entry into the gambling business.
For Zynga, the continued success of its partnership
with Facebook will also hinge on how well the social networking site is able to
monetise its billion users.
Finally all these users have to be converted into
revenues and profits and the whole issue is what Facebook is doing in that
direction.
Facebook has been very late in getting on to the mobile
bandwagon and it is only now that it is waking up to the fact that so many of
its users are no longer on their desktops or PCs but are there on their mobile
devices.
While both founder Mark Zuckerberg and Chief Operating
officer Sheryl Sandberg recently made all the right noises, we still have very
little clarity about what the company's game plan is for the near and medium
term.
No comments:
Post a Comment