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Zynga Filing Reveals Company's Extensive Exclusivity Deal With Facebook

An addendum to Zynga's IPO filing reveals that in addition to committing to Facebook's universal Credits system, the company has agreed an extensive exclusivity deal for its most popular games.
In an addendum to Zynga's IPO-related S-1 filing with the SEC, the company revealed that its exclusivity deal with Facebook, first established last year, covers more than just Facebook Credits. In May 2010, Zynga and Facebook resolved a dispute over the implementation of the universal Facebook Credits system by establishing a five-year agreement, under which Zynga would adopt the new over-arching currency in its games, with Facebook receiving a cut of the profits. This new filing, however, reveals that in addition to committing to Facebook Credits, Zynga has agreed to allow any game it builds with Facebook integration or data to become exclusive to the platform "for the duration of the agreement," reports the Wall Street Journal site AllThingsD. Titles currently listed in the exclusivity agreement include FarmVille, PetVille, FishVille, Treasure Isle, Mafia Wars, YoVille, Cafe World, and Live Poker. The agreement also notes that Zynga cannot release its titles on a list of several redacted rival social networks, though the company has permission to release games based on email or SMS. (It appears that the company's current iOS titles are unaffected.) In addition, Zynga has agreed to inform Facebook of any new games on the platform at least a week before launch, and exclusivity terms apply to these titles as soon as they go live. To hold up its own end of the bargain, Facebook has committed to help Zynga reach "certain growth targets for monthly unique users of Covered Zynga Games," and the S-1 filing implied the company will share an undisclosed cut of the revenue if Zynga creates ads within its games. However, Facebook representatives told Inside Social Games, "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." AllThingsD also reports that if Zynga titles exceed or fail to meet Facebook's promised growth targets, the terms of the agreement will change.

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