Facebook Inc (NASDAQ:FB) has broken out of its box and has started displaying ads on Zynga Inc (NASDAQ:ZNGA)’s website.
According to Reuters, it is the first time the company has gone outside the borders of its own site, increasing possibilities that some time down the road it could have its own online advertising network.
There has been much talk in recent years about disruption and trying to pick companies that will disrupt their industries. The debate continued at the Morningstar Investment Conference as Bill Nygren of Oakmark Funds faced off with Morgan Stanley's Dennis Lynch. Q2 2021 hedge fund letters, conferences and more Persistence Morningstar's Katie Reichart moderated the Read More
Now when users connect with Facebook on Zynga.com, they’ll see personalized ads and sponsored stories similar to how they appear in Facebook, as noted by the social network’s site. Facebook has said only sponsored stores about activity that’s shared will be seen and for the ads you don’t like, they can be moved by clicking the infamous X in the corner–similar to how it’s already done on Facebook.
In a statement by Facebook Inc (NASDAQ:FB) spokesperson Tucker Bounds via Reuters, he said, “People may now see ads and sponsored stories from Facebook on Zynga.com.” He added that the company will neither share information about people nor advertisers with Zynga, and that its advertisers do not include “targeting criteria.”
Reuters noted that the question had been posed to Facebook on whether it planned to developed a full-blown online ad network that will delivers ads to other sites, Bounds responded, “We are only showing ads on Zynga right now.”
Zynga did not comment about the new ads. As noted by All Things D, the advertising partnership shouldn’t come as too much of a surprise. In July 2011, Zynga filed a S-1 and included the revenue sharing agreement it had with Facebook ads appearing on its properties.
The news does come at an interesting time as Facebook’s stock faces continued pressure after May’s IPO, including worries about its declining revenue growth. In 2011, the company made $3.7 billion in revenues from ads shown on its website.
With the inclusion of an ad network, it could expand the range of Facebook ads and provide a new revenue growth source.
On Friday, shares of Facebook Inc (NASDAQ:FB) rose 4.4 percent in mid-afternoon trading before closing up 3.8 percent to $33.05.