Last Updated Jul 20, 2011 6:49 AM EDT
Although Zynga, in theory, is like other developers that use Facebook as an application platform, the company is far too popular and important to fit under a one-size-fits-all agreement. In the amended S-1 filing are two addendums to the developer part of Facebook's statement of rights and responsibilities.
The first addendum either states or suggests that:
- Zynga can choose whether or not to display Facebook ads on its game pages. The pages that don't run ads incur a monthly charge up to some undisclosed maximum for all the Zynga pages.
- Zynga gets some cut of the revenue from Facebook ads that run on its game pages. That means a possibly significant portion of revenue comes from ads and not virtual goods, and it complicates the breakout of revenue and cost of revenue in Zynga's financials. [Update: Facebook told All Things Digital that it has no agreements with developers to share revenue from ads that appear on Facebook. However, it did confirm that Zynga could take a share by running Facebook ads on its own sites, as I mention in the next point.]
- Zynga can apparently display Facebook ads on game-related forums and other web pages that Zynga or its affiliates own and operate, suggesting that Facebook may have ad revenue sources outside of its own social network.
- The current arrangements with Facebook last only until sometime in 2015.
- Facebook demanded a weekly target growth schedule for monthly unique users.
- Zynga had to give Facebook both platform and game title exclusivity, although the most important details are missing. That helps explain why the company remains so dependent on Facebook.
- Facebook is prohibited from deploying its own games.
- All Zynga users must have valid Facebook accounts, apparently whether or not they play one of the games covered by the agreement.