Facebook IPO: Zynga Generates 12% Of Our Revenue

Posted on Feb 2 2012 - 1:15am by Editorial Staff

Facebook SEC filing revealed a lot of interesting numbers – including the one from its client list – the company mention in its IPO filing that social game-maker company, Zynga, accounts for 12% of the social networking giant revenue. Facebook generated $3.71 billion in sales last year – with some $445 million of that came from its Zynga partnership – Facebook made $1.97 billion in 2010.

Facebook’s S-1 filing notes states, “We currently generate significant revenue as a result of our relationship with Zynga, and, if we are unable to successfully maintain this relationship, our financial results could be harmed.” The filing points out that Zynga generates “a significant number of pages on which we display ads from other advertisers” and that if Zynga were to launch games on or migrate to competing platforms the company’s financial results could be adversely affected.

Zynga – which too went public just three months ago is the vivid developer behind many of the popular online social and mobile games – including its very own FarmVille. The company host its number of games on social networking site, through which it reportedly sells virtual goods using Facebook’s payment system. Zynga’s cut on each transaction accounts for 30%. The news that Zynga makes up a significant percentage of Facebook’s revenue should definitely bolster investors confidence somewhat as Facebook, it turns out, is also dependent on Zynga.

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Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.