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Rumors that Yahoo may be looking to purchase the world’s biggest provider of free online poker have Zynga’s shares soaring in recent days.
While down around 4 percent in midday trading Tuesday, the price of Zynga’s shares had risen 10 percent during Monday’s trading.
From the Wall Street Journal:
The speculation stems from comments a Yahoo’s M&A head made last week about working on two “significant” acquisitions and about six smaller talent “acquihires,” comments reported by All Things D. That had analysts playing guessing games and throwing around the gaming company.
Matthew Linley of the Wall Street Journal doesn’t see a whole lot of common synergies between the two companies:
To buy Zynga in its current form would be to essentially buy an aspiring mobile gaming company — whose games don’t monetize as well as the old Facebook ‘Ville games — and a company in transition that’s still trying to figure out the rest of its business, like its own platform for connecting players. Unless Yahoo has a master plan when it comes to mobile games, there isn’t a lot of utility here.
With the online gambling landscape beginning to change in the US with a handful of states legalizing real money play, Yahoo would certainly enjoy the biggest advantage should it elect to enter the industry.
Payton O’Brien of Gambling911.com noted that Zynga would likely dominate every aspect of search rankings.
“At least where Yahoo is concerned, Zynga would probably be propelled to the top of the SEO food chain,” O’Brien suggests. “Real money online gambling is, after all, a multi-billion dollar industry that will only continue to flourish with US regulation.”
- Gilbert Horowitz, Gambling911.com
