It’s complicated: Facebook is in a relationship with Zynga
FACEBOOK has added 26 new documents to its filing with the SEC – originally submitted last week in preparation for the firm’s IPO – which outline its relationship with Zynga.
Facebook last week disclosed that 12 per cent of its 2011 revenues came from the gaming company, sending Zynga shares rocketing 17 per cent.
However, the FarmVille creator’s stock dropped four per cent yesterday as Facebook revealed the exclusive nature of their relationship, which stipulates that Zynga uses Facebook as its sole social platform and offers the network some exclusive titles.
In return, Facebook will enable the game-maker to build its own platform on top of the social network’s, and has agreed not to develop its own games – otherwise Zynga can terminate the relationship.
The companies share a mutual commitment to reach certain growth targets on monthly unique users for both brands’ products and services.
While similar terms were included in Zynga’s IPO filing last year, a new clause has been revealed which discloses an ad revenue sharing agreement between the two platforms, referring to Zynga’s implementation of Facebook ads on its non-Facebook.com platforms.
Zynga said in December it relies on Facebook for 90 per cent of revenues.