6 ms·

Facebook and Zynga Enter Into Long-Term Relationship

60 points by jsm386 16y ago

bemmu 16y ago
I guess they negotiated most of that 30% facebook credit cut to themselves.
whakojacko 16y ago
Sounds like Zynga got a discount on Facebook credits in return for staying committed to the FB platform. Of course, I could be horribly wrong
- gabrielroth 16y ago
  Seems more likely that any discounts would go the other way. Facebook provides Zynga with a massive installed and networked user base. What does Zynga offer Facebook that couldn't be replaced? If I were Zynga, my biggest fear would be that Facebook would decide to compete with me. So I'm guessing this agreement prevents that from happening, at least for five years, and in return Facebook gets a bigger chunk of Zynga's revenue stream. Disclaimer: I don't pay a ton of attention to this stuff, so let me know if I'm off base.
  - pchristensen 16y ago
    Much of recent FB growth, especially international, has been driven by gaming. FB has users, but Zynga has over 200M players. FB couldn't compete with Zynga in games without giving shady preferential platform features to their own games - even the other big, successful game companies aren't competing with Zynga.
    - pxlpshr 16y ago
      Yep, I think people severely underestimate how much gaming is a contributor to technology adoption. Mac OSX could have gained a lot more market share had Steve not been so stubborn. Case in point, iPhone app popularity is heavily skewed toward games.
  - deleted 16y ago
    [deleted]
  - fierarul 16y ago
    My wife created her Facebook account to play some Zynga game a colleague was playing. Later on I had to make a Facebook account in order to be a neighbor to this Zynga game. At least 3 other people in our circle use Facebook only for and due to Zynga. The social issue becomes just a side issue.
- Bossman 16y ago
  Yeah, that's what I was thinking. I remember hearing all those rumors about Zynga being really unhappy with Facebook and how they were taking their games to their own website and leaving Facebook behind in the future. It's amazing how quickly things can change.
deleted 16y ago
[deleted]
andrewljohnson 16y ago
Facebook really annihilated any meaning in their mission statement, and all the passive language indicates the leadership doesn't really embrace the new statement or take any ownership over it. Since when is Facebook about open and connected? Facebook connects me with my friends across the globe, in a private forum. Facebook's mission statement should honestly read "anything for another billion bucks," but instead some marketing stooge wrote this: Founded in February 2004, Facebook's mission is to give people the power to share and make the world more open and connected.
- julio_the_squid 16y ago
  I too am somewhat put off by the various statements from the CEO that his mission is to 'change the world'. I can think of another 2-3 rather manipulative, drive, self-oriented business founders who insist this about themselves, too. "Anything for another billion bucks" would be a much more honest assessment of their personal motivations.
macrael 16y ago
re: Zanga My impression is that they are making use of the user data they are able to collect when people start using the app. Is ther any evidence that they are selling that data or otherwise doing something uncouth with it?
- teej 16y ago
  I'm not sure how much you think "user data" is worth. I can assure you that Zynga makes more money playing virtual Monsanto than they ever would selling user data.
  - friendstock 16y ago
    so Farmville and Fishville are the High Fructose Corn Syrup of the internet? :)
  - macrael 16y ago
    Ok. I didn't really understand that they were charging so much for playing the game. I'm happy to be wrong.
vtail 16y ago
That's a lot of words for saying "Facebook and Zynga entered a 5-year agreement on using Facebook credits in Zynga games, but details of that are not disclosed". Reading all those press releases, I'm wondering who is the target audience for them? * Surely it's not an average Facebook user - she does not read press releases. * Surely it's not a journalist or a technical person - they don't need all the marketing mumbo-jumbo. * Surely it's not an (educated) investor, for the same reason. My question is, who?
- vtail 16y ago
  My conspiracy theory is that bigger firms are expected to have PR departments, and people working in PR departments are expected to write longer paragraphs to justify their existence.
  - stanleydrew 16y ago
    Sounds like a regular non-conspiracy theory that is probably spot-on.
    - andrewljohnson 16y ago
      Having worked in PR, there are no length requirements or even people valuing wordiness. What does exist is a stifling press release style that everyone loves to write and no one loves to read. It doesn't mater how long each thing is, but you need "about this company" and "about that company." You need garbage quotes from the execs (written by the PR guy of course), and you need everyone's statement of business in the first paragraph. So, with all that crap, you already have a page of nonsense. Then, add in a few paragraphs on the actual announcement, and that is how the sausage is made. Some press release writers are better than others, but no one can write good press release. Personally, I don't write press releases anymore. I write casual blog posts.
- thorax 16y ago
  I pretty much assumed it's for the small/medium journalists on a deadline who can use some of the mumbo-jumbo as filler so they have a full article without having to do more than a little bit of their own research.
friendstock 16y ago
I'm a little disappointed... I was looking forward to an epic showdown. Also, this means fewer opportunities for the smaller app developers.
- nano81 16y ago
  Not true. Zynga adopting FB credits for all of its games is very much a good thing for smaller developers on the FB platform. Having Zynga on board is a big step to having FB currency used as a standard for all FB games, which levels the playing field for small developers who can't build huge payment systems themselves.
  - sabon 16y ago
    Unless Zynga has 10% fees (my guess) and everybody else the usual 30%. I think they wouldn't sign the agreement otherwise.
  - friendstock 16y ago
    There's no problem with using SocialGold, Spare Change (Playspan), Gwallet, TrialPay, Offerpal, SuperRewards or many other payment/offer systems that are easy to integrate into Facebook apps.
derekc 16y ago
So by strategic relationship, would that be a less than 30% cut?
rmorrison 16y ago
Terms of the agreement between Facebook and Zynga were not disclosed. Any guesses as to the terms? = ) I'm thinking ~0.00% instead of 30% fees for the credits. Edit: I meant that I suspect it's much less than 30%, not really 0.00%
- Aetius 16y ago
  15%. I think that's what Zynga was expecting internally.
- vtail 16y ago
  I don't think it's 0%. That would imply that Facebook has no negotiations power in this dispute. But I think quite the opposite is true: Zynga cannot really afford leaving Facebook platform right now, so they don't have any credible threat, other than creating more bad publicity for Facebook. Based on how things are evolving recently, it doesn't look like Facebook is paying too much attention to it.
- nano81 16y ago
  http://techcrunch.com/2010/05/18/central-to-the-facebook-zynga-deal-credits/ http://techcrunch.com/2010/05/18/central-to-the-facebook-zyn... Facebook’s VP of communications Larry Yu tells us that the 30 percent fee has remained the same for this deal.
yason 16y ago
Even if it's in writing it doesn't mean the bigger party can't screw the smaller party.
iamdave 16y ago
There was once a time where the phrase 'innovative' had been used so much, you pretty much knew from the get go a company that touted it's success on being 'innovative' or 'forward' to be guilty of exactly the opposite. Same thing with the word 'proactive'. I learned the hard way that a supervisor who interviews you and makes it an explicit point to say 'I'm not a micromanager' is exactly that. In 2010, the buzzword became 'open' and the theme was 'transparency'. I'm starting to learn that a company that calls itself 'open' and 'transparent' is either exactly the opposite, or has decided to redefine what 'open' and 'transparent' mean in order to fit their own archetype of rhetoric. Oligarchies by way of Nielsen's Law.
- prewett 16y ago
  I've come to the opinion that "if you have to say so, you aren't." If the tofu were really yummy and tasty, you wouldn't have to say so on the package. (I like tofu, btw)
zephjc 16y ago
5 years is a long time on the internet. Who is to say it either Zynga or FB be relevant by then.

60 points by jsm386 16y ago

bemmu 16y ago

I guess they negotiated most of that 30% facebook credit cut to themselves.

Sounds like Zynga got a discount on Facebook credits in return for staying committed to the FB platform. Of course, I could be horribly wrong

gabrielroth 16y ago
Seems more likely that any discounts would go the other way. Facebook provides Zynga with a massive installed and networked user base. What does Zynga offer Facebook that couldn't be replaced? If I were Zynga, my biggest fear would be that Facebook would decide to compete with me. So I'm guessing this agreement prevents that from happening, at least for five years, and in return Facebook gets a bigger chunk of Zynga's revenue stream. Disclaimer: I don't pay a ton of attention to this stuff, so let me know if I'm off base.
- pchristensen 16y ago
  Much of recent FB growth, especially international, has been driven by gaming. FB has users, but Zynga has over 200M players. FB couldn't compete with Zynga in games without giving shady preferential platform features to their own games - even the other big, successful game companies aren't competing with Zynga.
  - pxlpshr 16y ago
    Yep, I think people severely underestimate how much gaming is a contributor to technology adoption. Mac OSX could have gained a lot more market share had Steve not been so stubborn. Case in point, iPhone app popularity is heavily skewed toward games.
- deleted 16y ago
  [deleted]
- fierarul 16y ago
  My wife created her Facebook account to play some Zynga game a colleague was playing. Later on I had to make a Facebook account in order to be a neighbor to this Zynga game. At least 3 other people in our circle use Facebook only for and due to Zynga. The social issue becomes just a side issue.
Bossman 16y ago
Yeah, that's what I was thinking. I remember hearing all those rumors about Zynga being really unhappy with Facebook and how they were taking their games to their own website and leaving Facebook behind in the future. It's amazing how quickly things can change.

deleted 16y ago

[deleted]

andrewljohnson 16y ago

Facebook really annihilated any meaning in their mission statement, and all the passive language indicates the leadership doesn't really embrace the new statement or take any ownership over it. Since when is Facebook about open and connected? Facebook connects me with my friends across the globe, in a private forum. Facebook's mission statement should honestly read "anything for another billion bucks," but instead some marketing stooge wrote this: Founded in February 2004, Facebook's mission is to give people the power to share and make the world more open and connected.

julio_the_squid 16y ago
I too am somewhat put off by the various statements from the CEO that his mission is to 'change the world'. I can think of another 2-3 rather manipulative, drive, self-oriented business founders who insist this about themselves, too. "Anything for another billion bucks" would be a much more honest assessment of their personal motivations.

macrael 16y ago

re: Zanga My impression is that they are making use of the user data they are able to collect when people start using the app. Is ther any evidence that they are selling that data or otherwise doing something uncouth with it?

teej 16y ago
I'm not sure how much you think "user data" is worth. I can assure you that Zynga makes more money playing virtual Monsanto than they ever would selling user data.
- friendstock 16y ago
  so Farmville and Fishville are the High Fructose Corn Syrup of the internet? :)
- macrael 16y ago
  Ok. I didn't really understand that they were charging so much for playing the game. I'm happy to be wrong.

vtail 16y ago

That's a lot of words for saying "Facebook and Zynga entered a 5-year agreement on using Facebook credits in Zynga games, but details of that are not disclosed". Reading all those press releases, I'm wondering who is the target audience for them? * Surely it's not an average Facebook user - she does not read press releases. * Surely it's not a journalist or a technical person - they don't need all the marketing mumbo-jumbo. * Surely it's not an (educated) investor, for the same reason. My question is, who?

vtail 16y ago
My conspiracy theory is that bigger firms are expected to have PR departments, and people working in PR departments are expected to write longer paragraphs to justify their existence.
- stanleydrew 16y ago
  Sounds like a regular non-conspiracy theory that is probably spot-on.
  - andrewljohnson 16y ago
    Having worked in PR, there are no length requirements or even people valuing wordiness. What does exist is a stifling press release style that everyone loves to write and no one loves to read. It doesn't mater how long each thing is, but you need "about this company" and "about that company." You need garbage quotes from the execs (written by the PR guy of course), and you need everyone's statement of business in the first paragraph. So, with all that crap, you already have a page of nonsense. Then, add in a few paragraphs on the actual announcement, and that is how the sausage is made. Some press release writers are better than others, but no one can write good press release. Personally, I don't write press releases anymore. I write casual blog posts.
thorax 16y ago
I pretty much assumed it's for the small/medium journalists on a deadline who can use some of the mumbo-jumbo as filler so they have a full article without having to do more than a little bit of their own research.

friendstock 16y ago

I'm a little disappointed... I was looking forward to an epic showdown. Also, this means fewer opportunities for the smaller app developers.

nano81 16y ago
Not true. Zynga adopting FB credits for all of its games is very much a good thing for smaller developers on the FB platform. Having Zynga on board is a big step to having FB currency used as a standard for all FB games, which levels the playing field for small developers who can't build huge payment systems themselves.
- sabon 16y ago
  Unless Zynga has 10% fees (my guess) and everybody else the usual 30%. I think they wouldn't sign the agreement otherwise.
- friendstock 16y ago
  There's no problem with using SocialGold, Spare Change (Playspan), Gwallet, TrialPay, Offerpal, SuperRewards or many other payment/offer systems that are easy to integrate into Facebook apps.

derekc 16y ago

So by strategic relationship, would that be a less than 30% cut?

rmorrison 16y ago

Terms of the agreement between Facebook and Zynga were not disclosed. Any guesses as to the terms? = ) I'm thinking ~0.00% instead of 30% fees for the credits. Edit: I meant that I suspect it's much less than 30%, not really 0.00%

Aetius 16y ago
15%. I think that's what Zynga was expecting internally.
vtail 16y ago
I don't think it's 0%. That would imply that Facebook has no negotiations power in this dispute. But I think quite the opposite is true: Zynga cannot really afford leaving Facebook platform right now, so they don't have any credible threat, other than creating more bad publicity for Facebook. Based on how things are evolving recently, it doesn't look like Facebook is paying too much attention to it.
nano81 16y ago
http://techcrunch.com/2010/05/18/central-to-the-facebook-zynga-deal-credits/ http://techcrunch.com/2010/05/18/central-to-the-facebook-zyn... Facebook’s VP of communications Larry Yu tells us that the 30 percent fee has remained the same for this deal.

yason 16y ago

Even if it's in writing it doesn't mean the bigger party can't screw the smaller party.

iamdave 16y ago

There was once a time where the phrase 'innovative' had been used so much, you pretty much knew from the get go a company that touted it's success on being 'innovative' or 'forward' to be guilty of exactly the opposite. Same thing with the word 'proactive'. I learned the hard way that a supervisor who interviews you and makes it an explicit point to say 'I'm not a micromanager' is exactly that. In 2010, the buzzword became 'open' and the theme was 'transparency'. I'm starting to learn that a company that calls itself 'open' and 'transparent' is either exactly the opposite, or has decided to redefine what 'open' and 'transparent' mean in order to fit their own archetype of rhetoric. Oligarchies by way of Nielsen's Law.

prewett 16y ago
I've come to the opinion that "if you have to say so, you aren't." If the tofu were really yummy and tasty, you wouldn't have to say so on the package. (I like tofu, btw)

zephjc 16y ago

5 years is a long time on the internet. Who is to say it either Zynga or FB be relevant by then.