Zynga reports disappointing earnings

Facebook has changed our lives, and few companies have benefited from this development more than Zynga, the company that brought you FarmVille. There are tons of people on Facebook playing annoying (to most of us) but addictive (to some of us) games that clog up our timelines, unless you block them of course.

The problem for Zynga is that it’s getting harder and also much more expensive to develop the new addictive games, and that led to disappointing earnings, which then led to its stock getting crushed. That then led to the further decline of Facebook’s stock as well, making this a very tough week for social media companies.

As gadgets keep evolving and as new social media platforms evolve, companies like Zynga can rocket to success, but then it’s hard to keep up that pace. Consumers are incredibly fickle these days. Just ask phone makers like Blackberry and Nokia. You’re on top of the world, and then Steve Jobs puts out the iPhone and soon your high-flying company is staring into the abyss.

Zynga is trying to avoid that fate. One of their latest games might help them, as Zynga Poker was launched for Facebook and has taken off as the #1 poker app on iOS. The key here, however, is that Zynga is looking past casual gaming. As the feds try to sort out online poker regulations, Zynga is one of many companies that want to take on the most popular poker sites. They want a piece of what could be a very large pie when we finally get uniform poker regulations. They’ll have to battle the big casino companies of course, but this could be a much-needed boost for a bruised social media star.

  

Google drops $100 million in Zynga

Zynga.Everyone knows Farmville as a Facebook phenomenon, but the people at Zynga are getting to know it as a cash cow. The Facebook game has gotten so much attention that Google has decided to invest more than $100 million in Zynga, supposedly in preparation for the launch of Google Games.

Can Zynga really stand as the cornerstone for Google’s Games operation? Absolutely. The company is projected at $350 million in revenue for the first half of 2010, half of which is actual operating profit. Total profit for 2011 is expected to be over a billion dollars. A billion, people. With a “b.”

Here’s TechCrunch on why Zynga is so important for Google:

Zynga continues to work on high level strategic business development deals. The reason these deals are so attractive to companies like Yahoo and now Google is this – Zynga allows them to rebuild the massive social graph, currently controlled by Facebook. For whatever reason people love to play these games and get passionately addicted to them, coming back day after day. That’s helped Facebook become what it is today. Google, Yahoo and others want some of that magic to rub off on them, too.

Who knew a silly social game could make such a huge impact.