Facebook and Zynga Reach a Deal

It seems as though the fight over Facebucks is over, at least between Facebook and Zynga... and at least for 5 years. (By which time, who knows where Facebook might be... or Zynga, for that matter.) As you might expect no details were released as to the nature of the deal. My guess (completely speculative) is that Zynga got Facebook to reduce the 30% charge by some amount. That makes sense to me; Zynga's 244 million Monthly Average Users (MAU) are a significant chunk of market, and certainly Facebook wouldn't want that to go away, or even any significant part of it. At the same time, it's not at all clear how many of Zynga's users would move from Facebook to Farmville.com or other game sites. Zynga could have lost a significant number of users.

The obvious result of all this hullabaloo is that neither Zynga nor any other game company with Facebook games will be putting all their eggs into the Facebook basket in the future. Efforts are already underway to diversify the user base, as Farmville.com would indicate. You don't want your entire business tied to a platform you have no control over, one that could arbitrarily start charging any sort of fee or placing any restrictions they like on your business.

At the same time, Facebook should be concerned about the future of its platform. If they make life too difficult or expensive for companies like Zynga, users could start moving away, or spending less time on Facebook. Which could leave an opening for some friendlier competitor to create a better alternative. You're only a click away from another web site; the past of social networking is littered with companies that were once market leaders.

It will be interesting to see how this issue progresses over time.