Zynga Game Network Inc

After a promising start, Zynga Inc.'s shares dropped below its $10 offering price the day it debuted on Nasdaq, closing at $9.50, as investors show signs of weariness over companies with major social networking components. Zynga's two dozen online games -- including Words With Friends, CityVille and Mafia Wars -- draw more than 150 million players every month on Facebook, mobile phones and other social networks. Its meteoric rise has caught the attention of many prominent investors, including Bing Gordon, a partner with Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, and Jeffrey Katzenberg, head of DreamWorks Animation SKG Inc. "In four years, Zynga has grown from nothing into a company that now has 2,000 employees and produces exceptional work," Katzenberg said.

After a promising start, Zynga Inc.'s shares dropped below its $10 offering price the day it debuted on Nasdaq, closing at $9.50, as investors show signs of weariness over companies with major social networking components. Zynga's two dozen online games -- including Words With Friends, CityVille and Mafia Wars -- draw more than 150 million players every month on Facebook, mobile phones and other social networks. Its meteoric rise has caught the attention of many prominent investors, including Bing Gordon, a partner with Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, and Jeffrey Katzenberg, head of DreamWorks Animation SKG Inc. "In four years, Zynga has grown from nothing into a company that now has 2,000 employees and produces exceptional work," Katzenberg said.

Facebook Inc. and Zynga Game Network Inc. ended weeks of tense negotiations by agreeing Tuesday to a five-year deal to keep Zynga's social games on the social network. The agreement between the Bay Area companies officially puts an end to a high-stakes game of corporate poker, one that involved tens of millions of dollars. At issue is a virtual currency Facebook wants all developers on its platform to use in any online commerce, with Facebook taking a cut of all sales. Zynga — which created Farmville, Mafia Wars and several of the most popular apps on Facebook — threatened to start taking its games elsewhere.

Showing it is focused on conquering mobile the way it has the personal computer, Zynga Game Network Inc., the biggest maker of games on Facebook Inc. including FarmVille, said Thursday it had bought Texas mobile-game company Newtoy Inc. Newtoy makes such popular games as Words With Friends on the iPhone, a Scrabble-like game. Zynga, a San Francisco social-gaming juggernaut, launched FarmVille on the iPhone five months ago. Since then, the game has been downloaded more than 7 million times.

Google Inc. made another play for the social networking space Friday with its acquisition of Slide Inc., which makes games, applications and widgets for websites such as Facebook and MySpace. The San Francisco developer makes free apps that Facebook users can install on their profiles in order to play simple games with friends or to arrange photo slide shows. Slide's SuperPoke application and its animal-centric variations, for example, are a family of popular social games with which players can virtually hug friends or raise a pet pig. A feature similar to Slide's Top Friends was eventually implemented by Facebook into every profile, allowing users to rank online buddies.

If anyone tells you to be realistic about your possibilities on Valentine's Day, simply reply, "Who needs reality?" Online, communities of virtual romantics are already exchanging all manner of digital bouquets, chocolates, teddy bears and love notes at a speed that could never be equaled in old-fashioned real life. In the world of FarmVille, the popular Facebook game in which users cultivate crops in an effort to build agricultural empires, love-struck users have plowed under their corn and soybeans to plant vast expanses of virtual roses.

Yahoo Inc. reported sales on Tuesday that missed analysts' estimates as marketers devoted online advertising spending to rival search websites. Excluding revenue passed on to partner sites, Yahoo had sales of $1.13 billion, the Sunnyvale, Calif.-based company said. That compares with the average estimate of $1.16 billion among analysts surveyed by Bloomberg. Yahoo is grappling with competition from companies such as Google Inc. and Facebook Inc., which have benefited from gains in market share and user growth.

Walt Disney Co. is looking to become Hollywood's biggest player in the fastest-growing segment of the video game business. The Burbank media giant is in talks to acquire Playdom Inc., one of the largest makers of online "social" games, in which people play games together on social networks such as Facebook, according to people familiar with the situation. The main sticking point is price: Negotiators for Disney and privately-owned Playdom, the people said, have discussed amounts ranging from $400 million to $750 million.

The 700 people lucky enough to work for online social-games maker Zynga Game Network Inc. feast on exotic gourmet grub prepared by professional chefs. They soothe stress with a visit to the company masseuse or reflexologist. And they take a break to get their hair cut. All for free. If singled out for a quarterly award, an employee can win a weekend spin in a $200,000 Lamborghini or a carload of vested stock. No perk is too small. Administrative assistants are even dispatched to engineers' homes to wait for the cable guy so engineers can stay laser-focused on developing the next hit game.

The future of the video game business is playing out very differently on two sides of Los Angeles. In Westwood, nearly 200 people recently lost their jobs when Pandemic Studios, the maker of Saboteur and other gritty video games, shut its doors. But 12 miles east, at Nexon Corp.'s U.S. division, bustling staffers are upbeat as they prepare to double the size of their workforce. The South Korean publisher best known for its lighthearted game MapleStory saw sales climb 12% in 2009.