Zynga shares tumbled nearly 13 percent in after-hours trading Thursday
after the online game company and Facebook disclosed that they changed
their relationship status to become less attached to each other.
Zynga
Inc. said in a regulatory filing Thursday that it will no longer have
to display Facebook ads or use Facebook payments on its own properties
such as Zynga.com. In addition Zynga will no longer be required to use
Facebook as the exclusive social site for its games, or to grant
Facebook exclusive games.
Facebook Inc., which filed a similar
disclosure, will also be able to develop its own games after the end of
March. Its deal with Zynga previously prohibited that.
In a
statement, Facebook said it has no plans to compete against Zynga.
"We're not in the business of building games and we have no plans to do
so," Facebook said. "We're focused on being the platform where games and
apps are built."
The company, which is based in Menlo Park, Calif., said it intends to keep working with Zynga, which is based in San Francisco.
The
amendments change the companies' 2010 contract that gave Zynga special
status among Facebook game developers. Zynga relies on Facebook for most
of the revenue it generates, but the company has been working to
establish its independence - while also maintaining ties with Facebook.
Zynga's
titles range from "FarmVille" to "CityVille" to "Words With Friends,"
the Scrabble-like game made popular on mobile devices.
Zynga
shares fell 33 cents, or 12.6 percent, to $2.29 in after-hours trading.
The stock closed up 11 cents, or 4.4 percent, at $2.62 in the regular
session.
Facebook shares dipped 4 cents to $27.28 in extended
trading. Its stock has surged by nearly 30 percent this month on
increasing optimism about the company's ability to make money on the
traffic visiting its service on smartphones and tablet computers.