Zynga earnings to give clues about Facebook

Adriene Hill:Later today we'll get earnings numbers from online game company Zynga. They make "Words with Friends" and "Farmville". Investors are going to be taking a close look Zynga's numbers for clues about Facebook.

Marketplace's Gregory Warner explains.


Gregory Warner: From "Farmville" to "Mafia Wars," the only way to do well at a Zynga game is to invite your friends to help you.

Rafe Needleman: And the easiest way to invite your friends; really the only way that makes sense today is to use Facebook.

That’s CNET editor Rafe Needleman.

Needleman: So Zynga needs Facebook. Meanwhile, Facebook needs Zynga.

Because every time you buy a virtual cow or a virtual cannoli from Zynga, Facebook gets real money -- almost $450 million last year. Ray Valdez is an analyst for the tech research company Gartner.

Ray Valdez: Facebook is the dog, Zynga is the tail, the question is to what extent does the tail wag the dog.

With so much of Facebook’s revenue riding on this one company, he says investors will be scanning Zynga’s report today for clues about Facebook’s IPO this spring. But watch out.

Valdez: They’re heading in the same direction, but there’s also potential collisions there.

Facebook is reaching out to Zynga’s rivals, and Zynga is branching out to the iPhone. Neither company wants to remain so joined at the hip for long.

In Philadelphia, I’m Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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