A recent set of reports suggested that there may be a move in the gaming community, and in an unexpected direction. The question that should be asked is, is this move likely to prove a success? The answer, sadly, is more complex than some would think.
The recent reports indicate an interesting possibility: Zynga may be ripe for a takeover, at the hands of, of all places, Yahoo. The report came in from Wunderlich Securities, which noted that Yahoo had previously been seen as having an interest in Yelp and OpenTable
. The report then suggesting making advances on Tumblr, FourSquare and Zynga.
Many shrugged this concept off, but some took a more active interest, briefly driving shares of Zynga up on Monday with at least a little extra momentum today. That's enough to make it a point worth considering; is Zynga a good fit for Yahoo?
On the surface, it's not a bad idea. Yahoo's reach is clearly picking up some exciting possibilities. Yelp and Opentable offer some serious restaurant picking help and nightlife options, and Tumblr and FourSquare do a great job adding the social media help that might give Yahoo a little extra perk.
But gaming, now...gaming is a market in which Yahoo's been asleep at the stick for some time. Yahoo has a gaming section, but it's buried in the "more Y! sites" section, and is far from front and center. The offerings are light to say the least, heavy on board, card and puzzle games, analogues of which can be had in several other gaming sites. Augmenting Yahoo's game section would be a terrific idea, but Zynga may not be the game source to do it.
Zynga is quite clearly leaning toward getting its online gambling efforts going in earnest, and that's not exactly the kind of gaming Yahoo really needs. This is especially underscored by reports of a "family-friendly" environment going on in Yahoo.
What's more, Zynga's public image isn't exactly top-notch, either, and some regard Zynga as a company in need for a turnaround. Zynga has been seen losing some major talent, and the company itself has been a little shy on new releases as well. Yahoo has quite a few problems on its own, and putting a lot of investment into Zynga isn't exactly conducive to Yahoo's long-term health.
Perhaps worst of all, Zynga may not even be interested in being acquired in the first place. Most of Zynga's stock is focused with Mark Pincus, and Pincus is pretty well focused on the gambling concept. With Nevada and New Jersey interested in getting in, it looks like Zynga might rather stay solo.
However, there's one company that Yahoo may not have considered to bolster its gaming: Armor Games
. Where GameStop
picked up Kongregate, so too could Yahoo bolster its game division by bringing in the massive online gaming provider that is Armor Games. Armor Games is patently packed with titles, and new updates coming in on a regular basis, making this a great addition to Yahoo that could likely be picked up, and potentially for less than getting hands on Zynga would cost. A lot more bang for the bug overall, and certainly without the issues that might be found with Zynga.
Yahoo has plenty of options; it's still a major market force in many respects, and there are certainly plenty of gaming platforms that would love to work with Yahoo. Zynga may not be the right one for Yahoo, but bolstering the gaming division is not at all out of line.