Some interesting news today about Zynga, just after yesterdays post about Friendster becoming a social games platform. Apparently they are completely dependent on Facebook. Not only has Zynga won Facebook, but they have been captured by FB. This is exactly the kind of thing that I would worry about as an investor. Single platform dependence is a big problem. Anything from a temporary interruption to a permanent change in policy on the part of FB could effect Zynga’s ability to provide it’s games. That dependence should worry investors even if they feel that FB is 100% reliable.
If I were looking to invest in Zynga I would want to see a comprehensive plan that explains how they are going to get themselves off a Facebook dependency ASAP. Just because Facebook has become my main personal social network does not mean that making it the sole foundation of a companies future is a good idea. (Only because I don’t have a Google+ invite yet) Diversification is important to investors.
This does shed light onto yesterdays post. Zynga has huge incentive to ‘play nice’ with Friendster. And Viximo for that matter. This can act as a test of Friendster… Managing a relationship with Zynga could really provide a lot of information about how smart the folks at Friendster are. Knowing that Zynga has no other social networks under it’s belt shifts the balance of power to the networks.
Zynga has an incentive to love and support (and maybe even provide money to) anyone that can help them break dependence on Facebook… Er… “Grow the user base” (That sounds much more friendly). Does Zynga work with Viximo? Hmm. Maybe they should get in contact. Zynga needs to add Friendster, Google+, and Viximo to it’s ‘social network’.