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Zynga Plans New Social Network

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Zynga is launching its own new social network for its players. It is a place where players can make profiles and connect with other players, spending even more time on the network. Mediapost's article explains that probably part of the motive behind the social network, besides having players spend more time playing is to use the leverage to gain some independence from Facebook. "Zynga has long hinted that it would like to lessen its dependence on Facebook, which takes a 30% cut of revenues generated through sales of virtual goods to casual gamers. These revenues, in turn, still make up a substantial part of Facebook’s bottom line -- some 11% of total revenues in the first quarter, plus another 4% from advertising on Zynga games. While Zynga still relies on Facebook’s payment system for sales on its own site, strengthening its own site may be a preamble to setting up its own payment system, heralding the end of revenue sharing with Facebook (at least for games played outside Facebook)."

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