Zynga flexes muscles and leaves MSN. Yahoo! Next?

Even quicker than you can harvest your heirloom tomatoes (on my mind since it is tomato season here in California), FarmVille has upped and left MSN.

That, according to a news article from our ever so observant friends at Inside Social Games. As Inside Social Games points out, this is not the first time that Zynga has taken a game away from a distribution partner, having removed its games from Tagged.

When Zynga announced deals with MSN and Yahoo! earlier this year, the social games world and Wall Street (these announcements were not coincidently timed to earning reports) were excited at the prospect of Zynga opening new distribution channels beyond Facebook for social games.

Two things have changed since these deals were announced.

One, Zynga was in the midst of a dispute with Facebook about notifications and Facebook Credits. Zynga needed to send a message that they were not as dependent to Facebook as Facebook may think. Fast forward to now, Zynga and Facebook have signed a five-year deal and Zynga no longer needs MSN or Yahoo! to dangle as bargaining chips in front of Facebook’s face.

Two, though the MSN (and Yahoo!) deals were announced with great fanfare, it may not have generated enough traffic to Zynga to make the partnership worth keeping.

Portals such as MSN and Yahoo! have an insane amount of traffic to send to Zynga. But, if all they are doing is linking from the games page or a Messenger button, they are only sending a small portion of the traffic. It would be like if Walmart agreed to sell your product, but only in stores in Alabama. It’d be nice, but won’t raise the bar for a company like Zynga.

Many companies are hedging that Zynga can lead the way to create new distribution channels for the social games industry. As Inside Social Games points out, if Zynga could not find success with MSN, one of the biggest sites on the Web, that is not a good sign that there is life for social games beyond Facebook.

Though this news is about MSN, I think the hidden message is for Yahoo! Since Zynga and Yahoo! announced their deal, the only integration I have noticed is the presence of Zynga messages (e.g., game alerts, friend messages) within my Yahoo! Mail. There is no way this is driving enough traffic to keep Zynga interested in this deal. By leaving MSN, Zynga is sending Yahoo! the message: promote us on your home page (where all the Yahoo! traffic is) or we’ll leave you too.

Yahoo! has a tremendous opportunity to be a contender in social games based on their brands and users. But if they don’t up their game and start to promote social games on their home page, Yahoo! will be the next company Zynga leaves at the alter.

Final note: I wonder if Google’s investment in Zynga has anything to do with this move to leave MSN. Probably not, but all is fair in love and war in social games.

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