Zynga stock falls following new Facebook deal

Shares in troubled Zynga fell 6 percent Friday after the Web gaming giant revealed new terms with Facebook that led to investor concern it would lose preferential treatment on the world’s No. 1 social network.

Under the terms of an amended agreement between the two companies, disclosed by Zynga late Thursday, Facebook is no longer prohibited from making its own Web games, ending its role as the special partner. The gaming company is now covered by Facebook’s “standard terms of service.”

The amended agreement also allows Zynga for the first time to offer games on other websites, including its own. It is also no longer obligated to display Facebook ad units or use Facebook credits as in-game currency.

That could help bring new players to the company, which has experienced slowing growth in many of its games this year, and seen others flop completely.

But investors were skeptical, concerned that the terms of the new deal could do more harm than good. Zynga shares lost 6.1 percent Friday, closing at $2.46.

Both companies issued statements in an apparent effort to mitigate Wall Street’s concerns.

“Our amended agreement with Facebook continues our long and successful partnership while also allowing us the flexibility to ensure the universal availability of our products and services,” Zynga chief revenue officer Barry Cottle said, according to the Wall Street Journal.

“We’re not in the business of building games and we have no plans to do so,” added a Facebook spokesperson.

So far this year, Zynga stock is down 74 percent.

—-

&Copy;2012 Los Angeles Times

Visit the Los Angeles Times at www.latimes.com

Distributed by MCT Information Services

—————

Topics: c000047573

More in Herald Business Journal

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Suitors, beware: In Seattle, Amazon also brought disruption

The company has grown there from a workforce of about 5,000 to more than 40,000 in 33 buildings.

Boeing rushes to bring back retirees as temps

It’s unclear if this could be a definitive turn in the downsizing tide.

Tax cuts won’t generate as much economic growth as Trump says

There’s little historical evidence that tax cuts actually pay off in boosting economic growth long-term.

City of Marysville adds HR director

The City of Marysville has hired Bill Kolden as its new human… Continue reading

Economic Alliance to host After Hours event at Clothes for Kids

The next Economic Alliance Snohomish County Business After Hours event is from… Continue reading

Speed Networking planned by Lynnwood Chamber

The next Good Morning, Lynnwood Chamber Speed Networking is from 7:30 to… Continue reading

More self-awareness could help build a better medical system

Marcy Shimada of Edmonds Family Medicine writes the second in a series about fixing our health care system.

Scratch-and-sniff brochures aimed to prevent disaster

Puget Sound Energy has distributed more than a million scratch-and-sniff brochures to… Continue reading

Most Read