One more Facebook post- Zynga partnership and Facebook 0

May 18, 2010 § Leave a comment

I promise I’ll take a break from posting about Facebook after this one.

Two different pieces of news caught my eye and I wanted to share them here. The first one concerns Facebook and Zynga, the topic of an earlier blog post. Speculation was rife that Zynga was planning on starting its own game network dubbed Zynga Live. The fallout was being attributed to notifications, royalties and what not. Surprising one and all, and taking the most obvious route for both parties concerned, the two giants patched up and signed a five year agreement today.

What does it mean for Facebook?

Facebook will continue to draw all those casual social gamers that are hooked on Zynga published games (all 300 million of them). They will also start earning royalties (rumored to be 30%) on in-game micro-transactions when a user wants to buy the latest super fertilizer for their farms. A definite win for Facebook. If Zynga had left, not only would Facebook have lost some users at this critical time for the company, it would have also lost some credibility with other social game developers using its platform.

What does it mean for Zynga?

When the problems between Zynga and Facebook surfaced, there was a lot of speculation about the future success for the game company since much of its growth has been attributed to Facebook. Zynga definitely had a lot more to lose than Facebook if it left the latter. The deal means that there will be a drop in revenue for Zynga as Facebook will now claim its royalty share but it can count on more users to beef up the bottom line. The deal definitely means more to Zynga than Facebook and in a sense this deal was a very smart and practical move for them.

What does it mean for the users?

More games, more notifications, more addictive hours. What else did you expect?. A Treasure?

On a completely unrelated note, Facebook announced the launch of Facebook zero, a data charge free version of the social network for mobile users in emerging markets. This is definitely a good move whereby Facebook can rack up more users more page hits to garner more ad dollars. Further more importantly, it also gets them more user data for whatever they choose to do with it. It will be interesting to see the uptake in the coming months, but I expect it to be huge in India which already boasts a big Facebook user base. This might warrant a new post sometime in the coming months.


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