Zynga's fine. They correctly figured out that once you're the biggest on Facebook, it's very easy to stay there. It'd take a competitor insane money to buy up t

Zynga's fine. They correctly figured out that once you're the biggest on Facebook, it's very easy to stay there. It'd take a competitor insane money to buy up the advertising necessary to introduce a game, whereas it takes Zynga an intro to their 'try these games' bar. When a smaller competitor happens to beat the odds and get to the top for one game, Zynga must make a copy-or-buy decision. Copy if you think the competitor can't leverage (or be used as leverage by a bigger competitor) the game's temporary eyeballs, or buy if you can make good use of those temporary eyeballs to cross-sell your other games. Draw something is a fad on fire. So rather than build (and cross-sell existing Zynga users who you 'own' already), buy the fad, cross-sell hopefully new users, cut off anybody who could have done the same. Extra points if those new users are a different type of user who wouldn't normally be caught playing X-ville junk. Now if in six months Zynga is raking in tens of millions of dollars a month on Draw Something I will eat crow. I have a feeling that isn’t going to happen. Zynga don't have to. Zynga doesn't care which if their games you play once you're in the system. They care about the total customer lifetime value of each user, not the 1-game value.