Zynga Teams With Yahoo On Social Games

Mafia Wars/Farmville-Zynga

Highlighting efforts to ease its reliance on Facebook, social game company Zynga Wednesday announced a partnership with Yahoo to offer its games throughout the Web portal's network including the home page, Yahoo Games and Yahoo Mail.

The deal comes on the heels of a new five-year agreement that Zynga struck last week with Facebook, where it operates hugely popular games like "FarmVille" and "Mafia Wars" that have aided the social network's growth.

But relations between the companies have more recently become strained over Facebook's plan to take a 30% cut of revenue from Zynga's sales, forcing it to use Facebook's virtual currency in applications. Zynga had reportedly also considered leaving Facebook altogether to launch its own social gaming network.

Terms of the Facebook-Zynga deal were not disclosed. But by pursuing more outside distribution deals with major sites like Yahoo, boasting 600 million monthly users, Zynga can presumably expand its user base beyond Facebook.

Earlier this year, Zynga reached a similar deal with Microsoft, putting up games including "FarmVille" across the company's online properties including MSN Games and Windows Live Messenger. The company, whose valuation has been reported as high as $4 billion, also provides games on MySpace and the iPhone.

For its part, Yahoo said the agreement would "bring top-notch social game experiences" to the site, although it wasn't clear what Zynga games specifically would be rolled out in the coming months. The deal is part of Yahoo's wider effort to keep users hanging out on its Internet real estate by integrating social media services like Facebook and Twitter.

J.P. Morgan analyst Imran Khan in a research note Wednesday said the Zynga alliance will "help position Yahoo to become a single access center to multiple places for people to play social games, access and share information, and connect with friends. Additionally, we think the new game content will help Yahoo increase user engagement."

Yahoo unveiled the deal during its investor day on Wednesday.

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