Zynga and Facebook end their stand-off with five-year deal, while dispatching a rare press release to squelch speculation.
Zynga and Facebook announced a five-year deal today, which, according to the companies, expands the use of the Facebook's credits in the Zynga games like Farmville. A prepared release states that Zynga is testing Facebook credits in select games and will include them in more titles in the coming months.
While financial terms were not disclosed, the agreement ends a two-week standoff between the brands over money. Facebook was requiring Zynga to use the social site's credits and pay 30 percent of every transaction - a number much higher than the 3.5 percent online payments providers normally charge.
Palo Alto, CA-based Facebook was reportedly also limiting Zynga's ability to contact users via the social site's direct messaging channel. That restriction may have forced Zynga to buy more Facebook.com ad inventory than it would have otherwise. The San Francisco-based social gaming company declined an interview request for this story.
By securing an agreement, Facebook keeps the profoundly popular Zynga property, "Farmville," and its nearly 100 million users - and the traffic that comes with them. And Zynga no longer needs to consider how it might get those users to migrate to a different platform.
Indeed, the announcement - made via a rare press release by the privately held Facebook - puts an end to industry speculation about whether Zynga might land on its own site, on MySpace, or on Twitter. The $300 million business will call the Facebook platform home though 2015.
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Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.
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