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Facebook made $445M in revenue off of Zynga alone in 2011

Facebook made $445M in revenue off of Zynga alone in 2011

February 1, 2012 | By Frank Cifaldi

It is no secret that social gaming giant Zynga generates substantial revenues for Facebook, but it wasn't until Wednesday that the company revealed just how much it depends on the FarmVille and CityVille maker.

According to paperwork filed by Facebook with the SEC ahead of its initial public offering, Zynga alone was responsible for 12 percent of the $3.7 billion in revenue it saw in 2011, or approximately $445 million dollars.

Though the company did not provide a breakdown, that revenue was split between direct advertising from Zynga on the website, ad impressions from ads displayed on its games' pages, and Facebook's 30 percent cut of its virtual goods sales.

With such a dependency, Facebook warned potential investors that a rift between the two companies could provide a substantial risk to the company's performance in coming years.

"If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected," said Facebook in the filing.

There is a history of tension between the two companies: when Facebook introduced its Facebook Credits system, Zynga fought back, attempting to wrest back control over how it monetized its games.

That tension was alleviated after a 2010 agreement. The agreement saw Zynga agreeing to use Facebook Credits as its primary currency, allowing Facebook to retain fees of "up to 30 percent" of the value of Zynga's in-game purchases through May of 2015.

The exact terms of the agreement -- importantly, what Zynga got out of it -- remain undisclosed.

Update: The initial version of this story incorrectly identified Zynga's 2011 revenues as being $3.1 billion. That figure -- as well as the adjusted estimate of revenues specific to Zynga -- has been corrected.

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