Shares of Zynga dropped as much as 10 percent after it reached a deal with Facebook that will decrease its dependence on the social networking giant. According to the regulatory filings made by the two companies, they have reached an agreement to amend a 2010 deal that has given Zynga its privileged status on the world’s largest social network.
Zynga will now be able to operate its own gaming web site. It is allowed to promote the site on Facebook and let the existing 1 billion users of the social network log in on the Zynga site. Analysts said that even if Zynga investors have reacted negatively to the announcements made Thursday, the amendment would have long term positive benefits for both companies.
Zynga will now have more payment options that subscribers can use even if they are not Facebook users. Both companies are trying to decrease their interdependence. Facebook is trying to attract more game developers while Zynga started its own platform, Zynga.com.
According to the new agreement, Zynga will now be covered by Facebook’s standard terms of services. It allows the gaming company to offer games on other web sites including on Zynga.com. It is not obligated to display Facebook ad units or use Facebook credits as its in-game currency.
According to Zynga chief revenue officer Barry Cottle, the amended agreement continues its long partnership with Facebook. It allows the gaming company to make sure that its products and services are available for everyone. Facebook said that it is not in the business of making games and have no plans to do so in the near future.
