Facebook And Zynga Make Up, Make Deal
Facebook and Zynga have apparently put aside their squabbling long enough to forge a five-year deal that promises to "increase their shared commitment to social gaming on Facebook and expands use of Facebook Credits in Zynga's games," according to a joint press release Tuesday. Terms of the deal were not disclosed.
Facebook and Zynga have enjoyed a fruitful symbiotic relationship over the last few years, with the social network providing an ever-growing audience for Zynga's social gaming apps and Zynga helping attract users to Facebook with wildly popular games like "Mafia Wars" and "FarmVille."
With 243 million monthly active users, Zynga is expected to post hundreds of millions in revenue this year and has reportedly been valued as high as $4 billion as a result of its tight relationship with Facebook.
But the two companies more recently had been at odds over steps Facebook has taken to limit the virality of apps and its rumored plan to require developers to use its virtual currency called Facebook Credits within apps. Facebook takes a 30% cut of revenue from in-app transactions through Credits, which is still being tested in a limited number of apps.
So disgruntled was Zynga that the company was reportedly threatening to launch its own social games network called Zynga Live, that would potentially exclude Facebook and Credits. But the companies for now appear to have put their differences behind them to reach a new long-term arrangement, although details about the deal were sparse.
The announcement said Zynga is testing Facebook Credits and will expand to more titles in the coming months.
"We are pleased to enter into a new agreement with Zynga to enhance the experience for Facebook users who play Zynga games," said Sheryl Sandberg, chief operating officer at Facebook, in a statement. "We look forward to continuing our work with Zynga and all of our developers to increase the opportunities on our platform."
But with the intense coverage Facebook attracts, including two full-time company-tracking blogs, it won't be surprising to see more aspects of the deal leak out in the coming days and weeks.