Facebook’s Amended S-1 Illustrates Zynga’s Importance

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It looks like Facebook is really moving on the IPO fast track. The company already has filed an amended S-1, just a week after its initial filing. This step easily can take more than a month to reach. This step in the IPO process easily can take up to a month from the initial filing.

So what’s new with the Facebook IPO? Well, the S-1 provided more details about compensation. For one, Mark Zuckerberg and Sheryl Sandberg will not get mega-golden parachute payments if they are terminated. Of course, they’re already billionaires.

But the thing that stood out to me in Facebook’s S-1 filing was its partnership agreement with Zynga (NASDAQ:ZNGA). The social gaming company currently accounts for roughly 12% of its revenues.

In the agreement, Zynga says it will invest significantly in the Facebook Platform and will use it exclusively for its social games.

What does Zynga get in return? The company is guaranteed certain growth targets and, Facebook also will not build its own social gaming platform. So for now, Zynga’s primary focus is to keep creating popular titles like Mafia Wars and FarmVille.

Also notable about this arrangement is what it means to Google’s (NASDAQ:GOOG) G+ social service, a smaller rival to Facebook. The service is pushing aggressively into social games to keep its users engaged, but Zynga’s absence from the social game free-agency market likely will keep G+ from leveraging some big-time titles down the road.

Tom Taulli is the author of various books. They include Artificial Intelligence Basics and the Robotic Process Automation Handbook. His upcoming book is called Generative AI: How ChatGPT and other AI Tools Will Revolutionize Business.


Article printed from InvestorPlace Media, https://investorplace.com/2012/02/facebooks-amended-s-1-illustrates-zyngas-importance/.

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