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The Zynga gamble – following Facebook at all cost

Can Zynga pull themselves back up or will they have to hope Facebook does it first?

It seems like an eternity since last Friday’s “IPO of the Century”. The pre-IPO hype is long gone and all that’s left is the price of Facebook and the investor’s ire. If only things were that good.

Can Zynga pull themselves back up or will they have to hope Facebook does it first?

Zynga and Facebook share a symbiotic relationship – for better or for worse. Facebook relies on Zynga for a large slice of income while Zynga relies on Facebook for a huge audience. Things looked great until last Friday.

According to most financial news sources, this was the first time since The Great Recession that retail (home) investors got back into the market. Those who were able to buy shares of Facebook got them hours after placing an order. By that time, share values were down and investors ended the week very disappointed.

Where Facebook goes, Zynga follows. According to Forbes, Zynga is shedding users like never before. Zynga’s marketing department never denied not focusing on customer retention. That’s fine and dandy when you always have “the next big thing” about to be released. Today, a game with the word “ville” is old news. Even bored Facebook users are moving onto other things.

According to AppData, CityVille is down from 39.5 million users to 26.1 million users in the past 2 weeks. The same goes for many of Zynga’s formerly popular titles. This is not a good time for a company that relies on investors.

Since Facebook went public last Friday, Zynga’s shares are down 16%. Will they recover? Maybe – but not without a recovery from Facebook as well.

Keeping up with the latest trends in entertainment, Matt Holden brings celeb news to the front page of OCA. Matt loves numbers games and researches the highest paying lottery draws to play.

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