Wednesday, May 12, 2010
*** WAR DECLARED *** FACEBOOK vs ZYNGA
*** WAR DECLARED *** FACEBOOK vs ZYNGA ... Thats right it is a war. Facebook want 30% of Zynga's profits and Zynga says no. So what does Facebook do they shut of Zynga's ability let users post anything. 2 rich kids fighting. So Sad !!!
Hello Everyone. This week has been one for the books. Zynga is listening to us and asking us questions on what we would like to see and giving us answers to some of our questions. Facebook on the other hand are just ignoring us as usual and wont even respond to anyones questions. I have called numerous times and sent emails to them and I am ignored now.
Ok lets right to it. Facebook does want 30% of Zynga's profit and Zynga says no. Zynga is stating that when they signed up they were told they get to keep all the profits from their applications and I confirmed that was TRUE. But agreements tend to change especially when rich kid Mark Zuckerberg feels it suit him. They saw all the money they were making and decided they wanted a piece of the action.
Facebook does not own Zynga so it is not entitled to their profits. Zynga does pay between $5 -8 million a month to advertise on Facebook. But alot of good that does when the word cant get out because Facebook shuts down the feeds. So you will see a either a lawsuit, an agreement or Zynga leaves Facebook or a combination of things on this topic.
Think of it this way Zynga makes $350 million on Facebook. Facebook wants 30% or $105 million PLUS the $5 Million per month for advertising, another $60 Million, so that is $165 Million or Almost Half of Zynga's income before Zynga's expenses. And they dont even own they company. Is That Fair ? I think Not !!!
As far as Zynga leaving Facebook well it is unchartered territory for a social game to do this. It has never been done before. Rumors are everywhere that this is happening. Zynga has taken steps to making this a reality by registering Zynga Live back in February as they saw the writing on the wall with Facebook.
Zynga is also looking into the possibility of even taking the company public. Now this could be good for us and them. They would be able to break away from Facebook cleanly and not look back. It would give them the money needed to make sure they have a stable platform and the ability to do what they have can to make games successful.
The good thing for us is that they will forced to answer to the shareholders and regulators so all those glitches and bugs will have to fixed at once. I am not saying you wont have any but when you do they will have to fixed ASAP or their stock price will drop and they will lose shareholders and millions if they dont fix them. Also the regulators will be on them to make sure they offer the public a safe and viable product. So that is a plus for us.
Will it happen? I dont know but Zynga has been putting people in place to see if it is viable and this has been going on since last year. They have now linked all the accounts to a special ID # which will enable them to transfer everyones account over so no one loses any thing especially those who have invested in some cases $1000's of dollars. So the plan is in place now we sit back and watch the war.
Some say this cant be done but I think it can quite easily. Dont believe me, ok check this out. A clan can go make a site just by going to lets say Google. They chose a template, theme and just plug in the applications they want in it such as chat, a forum, games, music and they can even make money with it by allowing ads on site. So It is all plug and play stuff not very hard. So do you think that Zynga with all their money cant make the site. The main issue Zynga will have is with servers and that is really not to much of an issue as they have plenty of servers available to use. Pretty easy to build. But the big worry is "If You Build It Will They Come."
Well the outcry by all Zynga players is yes they will especially if it means the games run better and they aren't handcuffed with Facebook rules. They already have a stand alone version of Farmville. Clans will flock over especially if Zynga makes a section on the site for groups and they are assured they will not be restricted like they are on Facebook. But they will not only come from Facebook but watch for the other sites like MySpace that have Zynga games too.
So the answer to the question. "If they build it will they come " The answer is YES. Will Zynga be successful ? Probably, if they do it right. What will happen to Facebook ? They will go on but they will take a big hit to their membership initially but they too will survive.
Who wins the war ? I think it will be Zynga as long as they stick to their guns and dont cave to the loanshark tactics of Facebook. They will set the bar for other companies and force Facebook to conduct business properly. Besides the fact that Facebook is now coming under the scrutiny of the federal government they are going to have more damage control to do than Zynga. So In my opinion Zynga Wins.
There are rumors Zynga Is leaving June 1st well they are just that so far I am waiting on a confirmation on this from Zynga Corporate as we speak so I will keep you informed.