The fact that Farmville may soon be made unavailable on Facebook is certainly a bad news for over 80 million users hooked onto their virtual farms day in and day out – it is reported that the partnership between Facebook (evidently the world’s largest social networking site with close to 500 million users) and Zynga (the $4 billion worth gaming company and the creator of Farmville, Mafia Wars, Cafe World, YoVille, et al) is at rocks with Facebook revising the terms of agreement between the two parties. Under the revised agreement, Facebook will be reportedly entitled to claim 30% commission on the financial transactions made through the site for Farmville, where players spend real money on virtual items to move ahead and level up in the game. While it is believed that Zynga now has the resources and capabilities to leave the platform of Facebook and open its own portal, gaming experts claim the move will be a huge loss for Facebook as there is a huge chunk of users who’ve registered only for the game. Duh!

Mahendra Mohan Gupta, Chairman & MD, Jagran Prakash Ltd.
Jagran Prakashan Ltd. (JPL), the publisher of the Hindi daily Dainik Jagran has announced the merger of the print business of Mid-Day Multimedia Ltd (MML, which comprises afternoon newspapers – Mid-Day, Sunday Mid-Day, Gujarati Mid-Day, Urdu newspaper Inquilab & website mid-day.com) with itself through an all stock deal. Here, the immediate task for JPL would be to turnaround MML’s financial fate (MML has a debt of around Rs.35 crore). In the long run, while JPL will get entry into Mumbai, MML’s Inquilab (one of the largest selling Urdu dailies in India) will get a boost from JPL’s strong presence in J&K, UP and Bihar. JPL, which was trying to tap into the burgeoning English newspapers’ market through its Inext and City Plus will now have some new regions to explore. Further, JPL’s strong network will help Mid-Day to strengthen its brand presence and recover ground that was perhaps being lost due to resource constraints. As per IRS 2009, Mid-Day’s average issue readership has fallen to 4,17,000 in 2009 from around 6,63,000 in 2006.

As per analysts, synergies in marketing could bring in 10-15% expansion in revenue for JPL in the near future. Joint marketing and printing facilities, newsprint procurement, et al, will further bring down costs for both. But what still needs to be seen is how the cultures of the two entities will avoid conflicts, which generally occur during mergers.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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