New Zynga S-1 Docs: Traffic Guarantees From Facebook, but No Canvas Ad Revenue
A recent set of updates to Zynga’s S-1 document sheds new light about the company’s business position, as it prepares for an initial public offering. For starters, Google has indeed invested, although the terms were not disclosed.
More interesting is the special relationship that Facebook and Zynga have formalized over revenue and traffic, in two developer addendums. (You can find the full set of docs here, although sadly some of the most interesting bits have been removed).
At first glance, the terms read as if Zynga had a special deal with Facebook, where it gets a portion of the ad revenue from Facebook ad units that run alongside its games in canvas apps. However, the terms specified that it is not canvas app ad revenue — instead, it’s referring to Zynga web sites like FarmVille.com, or even Facebook ads that might run within games.
We asked Facebook about the matter and got this response: “We don’t have agreements with any developers, including Zynga, to share revenue from ads next to their Facebook canvas apps. We did agree with Zynga to work together in the future on providing ads on their properties beyond Facebook, but we have no current timeline for when we might start working on that.”
Facebook also appears to have guaranteed Zynga certain growth targets in exchange for continuing to invest in games on the platform, whether web or mobile. Facebook has, since the launch of the platform, rewarded and punished individual developers through increasing or decreasing the number of invites, notifications and other communications allowed per user, or by providing some games with special access to features or in-house advertising.
However, Facebook has not to our knowledge previously guaranteed traffic levels in writing. Other developers are no doubt wondering if they can get the same sorts of guarantees, and why they haven’t gotten them in the past. Unless they have their own undisclosed agreements, of course.
As part of the addendum terms, Facebook appears to have gotten Zynga to agree to make Facebook the exclusive “Social Platform” that it uses, for the unspecified time-frame of the agreement. This helps explain Zynga’s closure of its games on Tagged, MySpace and other social networks, although we’re not sure how that might conflict with anything Google might want to launch with Zynga’s participation. Facebook also appears to have required Zynga to include itself as an option for mobile apps, for the agreement’s duration. However, Zynga can also use mobile platforms as well.
Another interesting point here is that Facebook has given Zynga permission to create some sort of “Zynga Platform,” although we don’t know what that is. It also has given the developer access to new features, including a proposed “Game Friends Protocol” API, apparently offering a new way for social gamers to find and play together.
Finally, with Credits, the virtual currency exclusivity kicked in for most of Zynga’s major games over the third quarter of 2010. As we examined when the filing first came out this month, the company has continued to grow revenues after the Credits implementations kicked in; some growth rate decreases are visible, but other factors, like communication channel reductions, appear to have affected it as well.
July 19th, 2011 at 12:05 pm
[...] > Continue reading on Inside Social Games. [...]
July 19th, 2011 at 3:17 pm
Does Zynga get special treatment with its request bucket allocations?…
Well, whaddya know, the S1 Filling by Zynga tells a different story then Siqi Chen http://www.insidesocialgames.com/2011/07/19/zynga-s-1-update-traffic-revenue/…
July 19th, 2011 at 11:09 pm
Hmm its time we woke up and faced the reality that Facebook is just about dead when it comes to a gaming platform. It had a good thing, then it got squeezed. Now with Google+ coming out soon, and their in-game payment options coming into beta.. best start looking there if you want to get in early.
July 22nd, 2011 at 11:01 am
[...] developer in the form of Superpoke Pets! developer Slide. It was also recently revealed that Google did indeed invest in Zynga. Even if the FarmVille developer gets some kind of edge from the funding, social game [...]
July 30th, 2011 at 9:57 am
[...] with Facebook as part of its S-1 filing to go public, because it seemed to show that Facebook was promising traffic for Zynga’s games on web and mobile [...]
August 30th, 2011 at 2:10 pm
[...] first moved toward IPO with an S-1 filling early this summer that has since been amended to include or exclude details on valuation, traffic target agreements with Facebook, and the exact [...]
September 20th, 2011 at 9:54 am
[...] a result of declining platform performance or perhaps due to an exclusivity agreement with Facebook revealed in Zynga’s IPO filings. On Facebook, the game has been in decline over the last year, showing only a brief spike in [...]
February 8th, 2012 at 2:13 pm
[...] year, TechCrunch writer Eric Eldon reported on these same documents when Zynga filed them. He explained how the documents show that: Facebook also appears to have [...]
February 8th, 2012 at 2:17 pm
[...] to have the same redactions as when Zynga filed them. Last year, TechCrunch writer Eric Eldon reported on these docs explaining how they show that: Facebook also appears to have guaranteed Zynga certain growth [...]
February 8th, 2012 at 4:16 pm
[...] to have the same redactions as when Zynga filed them. Last year, TechCrunch writer Eric Eldon reported on these docs explaining how they show that: Facebook also appears to have guaranteed Zynga certain growth [...]
February 8th, 2012 at 5:33 pm
[...] Eldonが これらの文書についてその内容を説明している。 [...]
March 1st, 2012 at 2:50 pm
[...] else, too. They allowed Zynga to run its own canvas ads on its properties, as I detailed on Inside Social Games last July. You don’t see ads right now, but Zynga could plug all of its advertisers — [...]
April 16th, 2012 at 1:02 pm
[...] Zynga’s updated stock filings are causing much ado, we’re seeing dollar signs all over the fact that people [...]
June 22nd, 2012 at 10:22 am
[...] year, Facebook told us it had agreed to work with Zynga to provide ads on their properties beyond Facebook, though at the [...]
June 22nd, 2012 at 3:39 pm
[...] notes that the social networking company said last year that it would provide ads on Zynga.com — and share revenue with Zynga — in the [...]
June 22nd, 2012 at 8:01 pm
[...] records that a amicable networking association said final year that it would yield ads on Zynga.com — and share income with Zynga — in a [...]
June 24th, 2012 at 4:11 pm
[...] notes that the social networking company said last year that it would provide ads on Zynga.com — and share revenue with Zynga — in the [...]
June 25th, 2012 at 6:17 am
[...] year, Facebook told us it had agreed to work with Zynga to provide ads on their properties beyond Facebook, though at the [...]
August 3rd, 2012 at 2:35 am
[...] personalized ads and sponsored stories on Zynga.com as per the developer addendums announced last [...]
October 25th, 2012 at 1:36 am
[...] personalized ads and sponsored stories on Zynga.com as per the developer addendums announced last year, but it does not currently generate meaningful revenue from these [...]
November 29th, 2012 at 3:14 pm
[...] deep integration with the Facebook platform that appeared to be born of the developer’s privileged relationship with Facebook. Zynga.com previously supported Facebook ads and Facebook payments in a deal unlike [...]
November 29th, 2012 at 3:25 pm
[...] deep integration with the Facebook platform that appeared to be born of the developer’s privileged relationship with Facebook. Zynga.com previously supported Facebook ads and Facebook payments in a deal unlike [...]
February 5th, 2013 at 8:24 pm
[...] personalized ads and sponsored stories on Zynga.com from June 2012, as per the developer addendums announced in [...]