Skip to main content

IPO Filing Reveals Extent Of Facebook Control Over Zynga

Zynga in its IPO filing has revealed the relationship it shares with leading social networking giant Facebook Inc, after both entered in to an exclusive agreement last year.

Casual game maker Zynga on Monday filed its IPO with SEC in a 600 page long addendum detailing the relationship it has with various investors especially the Palo Alto, California-based Facebook Inc. Both the companies entered an agreement for five long years in 2010, however, details of the agreement were vague until Monday.

According to Business Insider, Facebook does not merely share advertisement revenue with its third party game platform Zynga, but it also exercises some rights over its functioning.

Under the signed agreement, Zynga has to inform Facebook at least a week prior to releasing any new game. Also it can not develop games for Facebook’s rival companies such as MySpace and Google Plus.

While the games that are integrated with Facebook are exclusive titles for the social networking website, in return, Zuckerberg’s Facebook will help Zynga meet its target users every month.

The disclosed details have made us believe that Zynga’s relationship with Facebook is not merely based on sharing revenues but direct control exercised over the game developer by Facebook which, according to experts, is not an ideal situation for long term business plans.