Zynga plans to build a gamers' social network

By Gerry Shih and Malathi Nayak

SAN FRANCISCO (Reuters) - Zynga Inc unveiled a social network for gamers dubbed "Zynga with Friends" on Tuesday, hoping to wean itself from a longstanding, symbiotic relationship with Facebook Inc, while becoming a major Internet destination.

The company founded by Mark Pincus will also provide programming tools to help third-party developers devise online and mobile games based on its own software, expanding its slate further beyond mainstays such as "Farmville" and "Mafia Wars."

"We're opening our doors today and opening Zynga Partners for Mobile. We are inviting developers from all over the world to come and join our network," said David Ko, chief mobile officer.

Zynga wants to create an ecosystem with "best-in-class mobile developers and best-in-class mobile games," Ko said.

Zynga shares closed 5 percent lower on Tuesday as investors saw little in the announcement - which included the planned social network, as well as some new, casual games - to drive strong long-term growth.

The stock has lost a third of its value this year on concerns about its dependence on Facebook for the lions' share of its revenue - on a platform experiencing slower growth.

The new social network "is a natural step in the right direction," said Colin Sebastian, an analyst with Robert W Baird. "It might help them become less dependent on Facebook but ... they will continue to remain dependent on Facebook for quite some time.

"One area where they may have disappointed people is, they are not showing any games in development that target a more core gamer, or so-called mid-core gamer. That's something where we've seen a lot of growth for Facebook, and that's potentially a missed opportunity for Zynga."