

Zynga Gunning Up (And Lawyering Up) For War Against Facebook With Zynga Live - chegra
http://techcrunch.com/2010/05/07/zynga-gunning-up-and-lawyering-up-for-war-against-facebook-with-zynga-live/

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naner
Aww too bad... it couldn't have happened to two sleazier companies.

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oldgregg
Yes, but I do feel a little bad for the other 20,000 developers that don't
have the resources to do anything about it.

It's now clear that "open platform" hype is pure marketing spin -- bullshit-
speak to make you think they actually give a fuck.

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mattmaroon
Me too since I'm one of them (and my company now 12 of them) but FWIW, none of
us ever forgot that Facebook is not the web, and that it has a profit-
motivated owner. We've all expected this coming, and any who didn't deserve
what they get for being naive.

I'm writing a blog post on my thoughts about it, story at 11.

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johnrob
Same goes for Apple and the uprising against their banning of non-native
development tools. Facebook is not the web, and iPhones are not computers.

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seiji
You may also like... <http://futureoftheinternet.org/> (hit the Download link
for a free copy)

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potatolicious
Not that I'm a fan of Zynga, but does anyone else think Facebook is moving too
fast, too soon? In the past two weeks they've alienated their developers,
their users, and generally inspired a lot of just plain bad press.

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mcav
If there was a decent competitor to Facebook who had a lot of uptake (or even
a more "open" networking system), now would be a good time to take advantage
of all of Facebook's negative publicity.

Right now I don't see anything good enough to start a transition away from
Facebook, even if many people wanted to move elsewhere.

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elai
Social Networks tend to be regional, bebo for europe, myspace in the US,
friendster & hi5 for South East Asia, Orkut for Brazil, etc. If you decouple
your game enough from social networks you can make them work on all of them
and perhaps add incentives to use the more profitable networks over others.
(10 Facebook credits only gets you 5 farmville points, but buying direct on
farmville gives you 5 farmville points for the same price as 5 facebook
credits, etc)

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pbiggar
FYI, bebo is dead in Europe, its Facebook all the way. (I think I heard AOL
announced they were shutting Bebo down anyway.)

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tbgvi
You would think that DST, who's invested tons of money in both Zynga and
Facebook, would try to keep the peace here. I read they're pretty hands off
though.

Zynga helps Facebook by keeping people on the site and giving them a reason to
come back. Facebook gives Zynga a huge audience to tap into. If Zynga goes off
on its own I don't see it helping either one.

I'd be happy though, less Farmville spam to deal with.

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mrshoe
From what I've read, Zynga's ad spend represents a huge portion of Facebook's
revenue. If that's true, this could pull them right back into the red.

However, it's unclear whether Zynga would continue to advertise on Facebook
even if their games no longer run there. I'm pretty sure much of their growth
is due to ads on Facebook. It really would be the dissolution of a symbiotic
relationship, which I imagine will be tough on both companies. Seems like the
perfect candidate for an acquisition, but who would acquire whom? Does Zynga
bring in more revenue than Facebook?

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lenley
Interesting, I dont think Zynga brings in more revenue than facebook; however,
facebook is trying to gradually acquire 30% of Zynga's revenue through
facebook currency. Fb doesn't even need to acquire Zynga.

Zynga has a very weak hand, and facebook can always give priority placement to
game companies that decide to play by the new fb rules.

Zynga's games are absolutely replaceable all the game companies have games
that are almost perfectly identical.

This "leak" shows how weak Zynga's position actually is.

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allwein
The games themselves may be replaceable, if you're just starting out.

But I don't think that anyone who has invested over a year in gaining
achievements and advancement in FarmVille is going to just switch to a new
farm game and start all over again.

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richardw
Agreed, and these days I'd say most of Zynga's marketing is piggybacking on
their existing games. They use their position as leverage to introduce new
'properties', which I'd guess they could use to direct you off of Facebook.
Especially if this off-FB site of theirs takes off and the bad press
continues.

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spitfire
I think I can sum it up by saying facebook has become a big, dumb company.
It's a little early to call it, but it's looking more and more like the next
excite/yahoo. Trying to be too smart by a half.

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bobbyi
So are they actually considering leaving Facebook?

The headline implies yes, but from the content of the article it sounds much
more like this is just gamesmanship as the negotiate a rev share and need to
act as if they have other options.

On the surface, this looks as credible as when Time Warner Cable and Viacom
were pretending they could part ways.

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bond
Facebook saw all those millions generated by Zynga and the logic step was to
get Zynga to use their paying system and charge them a percentage...

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rokhayakebe
Zynga makes some 1M a day, Facebook some 2M/day. Obviously Facebook is not so
happy about someone making half what they make within their own platform.

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runevault
Don't forget FB also has way higher expenses maintaining all of the servers
and the larger staff, so their income may be higher but their profits are
likely significantly lower.

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lenley
This is a very weak leak by Zynga, I don't see how they can do anything but
complain about facebook's change in policies.

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ryanhuff
Why can't Zynga use their games as a means to move its users outside of the FB
wall and into a Zynga-only platform? It seems that many of Zynga's users would
do almost anything for some free game credits.

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lenley
Zynga can (and will ) I just think it adds a more difficulty to retaining
customers, and getting the free advertising on facebook through messages and
requests etc. as people log-in zlive and don't play on fb.

But here's the worst from Zynga's side:

I dont think there is anyway Zynga can move people over fast enough -- fb will
own a large chunk of user data (and realistically that's the big advantage
Zynga has right now -- copying gameplay is easy, analytic packages are out
there like mixpanel to optimize ROI on ads).

This really signals fb must really see gaming as a pathway to significant
profits, and fb is will own the data on the most active and profitable players
( time spent, new games tried and with fb currency $ spent etc.) and could
always expose this data to advertisers in some fashion to commaditize the
market further.

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sbov
The way facebook is going about this is absolutely the wrong angle.

I understand its their platform, and they can do what they want, but they
should live and die like any other payment system. Zynga should choose them
because even with the 30% skim, Facebook credits still give Zynga more revenue
than other payment systems. This isn't too hard to imagine - Facebook has the
ability to integrate credits with their site like no 3rd party provider can.

Instead they come across like cry babies.

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mbreese
This is what happens when you live and die behind a walled garden.

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natrius
Huh? Zynga's apps only depend on Facebook for advertising in users' streams.
This is no different than Google refusing to show a company's ads.

This is what happens when you depend on anyone for anything.

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necrecious
Well, the problem is that Facebook hasn't found an as reliable revenue stream
as Zynga.

As a platform owner, it must suck that people are making more money off your
platform than you. So you are tempted to co-op other people's revenue stream
as your own.

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robryan
Facebook could always hire their own team to build games, and give them
priority placement as some kind of special class of application all over the
site. Then launch facebook credits with these games and give more perceived
value with some kind of half price credits on these games deal.

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byrneseyeview
<http://news.ycombinator.com/item?id=1274692>

This is what you should expect. Platforms will maximize their profits if they
"tax" people the way countries do. Unlike a country, a platform can often tax
more efficiently, and closer to the peak of the Laffer Curve.

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enjo
Closed platforms...yay.

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khangtoh
After taking money from the Russians, Facebook all the sudden operate like a
Mafia.

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Aetius
Seriously, how on earth does Facebook expect to get away with a 30% tax _and_
reduce virality to the point of only being able to advertise to get users?

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coolio73
I'm not sure it's a good strategy for Zynga to make enemies of Facebook--for a
number of reasons. The one that comes to my mind is Facebook must have tons of
data on Zynga's deceptive trade practices. If this info gets out, and it's as
bad as the conspiracy theorists suspect, it could shut Zyna down.

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alanh
Since Zynga's in-game credits are essentially a scam on multiple levels
(remember Scamville? and the psychological manipulation / exploitation
involved in the first place), they have absolutely zero moral high ground to
complain about Facebook replacing their in-game credits with Facebook's own,
especially if this cuts down on scammy behavior.

