Zynga Finally Gets a Chance to Prove Itself

By Tim Beyers – Dec 2, 2012 at 8:30AM

NASDAQ: ZNGA

Zynga

The stock plummets as investors raise questions about Zynga's solo act.

Once more, Zynga (ZNGA) is getting clobbered. The stock was down more than 6% on Friday after filing a revised partnership agreement with Facebook (META -0.52%) 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.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares of any of the companies mentioned in this article at the time of publication. Check out Tim's Web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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