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Once more, Zynga (Nasdaq: ZNGA ) is getting clobbered. The stock was down more than 6% on Friday after filing a revised partnership agreement with Facebook (Nasdaq: FB ) that ensures Zynga's freedom to develop games for other platforms, but at the price of granting its benefactor the right to pursue game development in-house -- should it ever want to. Shares of Facebook were up slightly in Friday morning trading.
Investors' nervousness is understandable. Existing efforts to place games on Facebook competitors such as Google+ have done little to boost growth. Meanwhile, in its latest 10-Q quarterly filing, Zynga disclosed that 80% of its quarterly bookings and 84% of revenue could be traced directly to its relationship with Facebook. The FarmVille creator is risking a lot in seeking to go solo.
Can Zynga make this deal work for shareholders? How about Facebook? Fool contributor Tim Beyers addresses these question and more in the following video.
Zynga's post-IPO performance has been dreadful, and investors are beginning to wonder if it's "game over" for this newly public company. Being so closely related to the world's largest social network can be a blessing and a curse. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.