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New Facebook Zynga Deal Loosens Ties

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Revised partnership agreement gives Zynga more freedom but fewer perks

Facebook and Zynga have loosened their ties in a new partnership between the two companies. The new agreement replaces their previous 2010 deal, which competitors had suggested gave Zynga preferential treatment on the social network.

Zynga will now have much more freedom to operate a standalone gaming website, but will no longer be able to promote its site on Facebook and draw users from the social network’s estimated one billion-strong user base.

Games such as Farmville will still be available on Facebook, but there will no cross-promotion initiatives directing users to Zynga’s website, while visitors will not be able to see their Facebook friends or deliver updates to their profiles.

New Facebook Zynga deal

The two companies have a symbiotic relationship. Fifteen percent of Facebook’s revenue comes from Zynga, while Zynga itself relies on Facebook for 83 percent of its revenue.

Facebook takes 30 percent of all transactions using Facebook Credits within Zynga games, and has warned that a change in the relationship between its users and the developer could have a significant impact on its financial results.

However the new agreement paves the way for Zynga to look at other payment methods for its standalone site. In addition, Zynga will not have to show adverts to Facebook once the existing partnership expires on 31 March 2013.

Zynga has struggled in recent times as players defect to rival web-based and smartphone titles and has written off half the value of OMGPOP, the developer of popular mobile game Draw Something ,which it acquired earlier this year for $182 million.

However it has highlighted mobile and online gambling as areas of potential growth, while Google has courted Zynga, along with other game developers, for its Google+ social network.

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