Facebook And Zynga Hang Together

Brian Caulfield, 05.18.10, 06:40 PM EDT

Game developer will use the social network's payment system for its games.

BURLINGAME, Calif. -- Google, MySpace, Yahoo and Electronic Arts would all have been among the winners in a bust-up between Facebook and Zynga. Which is exactly why it didn't happen.

Social network Facebook and Zynga said Tuesday they have struck a five-year deal that will expand the use of the social network's payment system in Zynga's games, such as FarmVille and Mafia Wars.

A Facebook spokesperson confirmed that the social network will get 30% of every Zynga transaction that makes use of Facebook credits; this is the same percentage fee Facebook charges other developers.

The Business Insider blog speculates that Zynga will get free ad space on Facebook in return. Zynga advertises heavily on Facebook. Facebook declined to comment on Business Insider's report.

A rift between the two companies would have benefited Zynga's rivals, such as EA's Playfish, Playdom and CrowdStar. Zynga builds games that hook into social networking services.

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Facebook, too, could have lost some users to Google ( GOOG - news - people ) and Yahoo's ( YHOO - news - people ) social-networking efforts, as well as rival MySpace, if its largest developer chose to walk away. Instead, Facebook has signed up a partner in Zynga that is sure to pump transactions into its nascent Facebook Credits system.

The biggest winner, however, is Zynga Chief Marc Pincus. He gets to assure investors that the partner on which he has built much of Zynga's business isn't about to ditch him.

That would be critical if Pincus chooses to offer Zynga stock to the public this year.

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