Social networking site Facebook Inc. on Wednesday amended its regulatory filing for an initial public offering, revealing details about its partnership with online gaming company Zynga Inc. (ZNGA: Quote) to boost growth.
Menlo Park, California-based Facebook, in early February, disclosed in a regulatory filing that it has filed for an IPO of up to $5 billion of its Class A common stock. The company intends to apply to list its Class A common stock under the symbol "FB", but has not not disclosed in which exchange it plans to list its shares.
Facebook on Wednesday amended its S-1 registration with the SEC to revealed details of a special agreement with Zynga. The company said its developer agreement with Zynga contains a series of growth targets. Zynga accounted for 12 percent of Facebook's revenues in 2011.
Zynga is the world's largest developer of online social games. It was founded by Mark Pincus in January 2007. The company's offerings include FarmVille, CityVille, Words With Friends, CastleVille, and Zynga Poker.
Zynga's games are popular in social networking sites such as Facebook and on mobile platforms. Ahead of its IPO in December, Zynga had said that Facebook accounted for 90 percent of its sales.
Facebook said in its amendment filing that the company and Zynga desire to "work together to increase the number of users of each party's products and services."
Further, Facebook noted that Zynga is making a significant commitment to the Facebook Platform by using Facebook as the exclusive social platform on the Zynga properties and granting Facebook certain title exclusivities to Zynga games on the Facebook Platform. In exchange for such commitment, the companies have committed to set certain growth targets for monthly unique users of covered Zynga Games.
The amendment by Facebook also provides details about the employment agreements with its top two executives, chief executive officer Mark Zuckerberg and chief operating officer Sheryl Sandberg.
Zuckerberg will earn a base salary of $500,000 per year and Sandberg will earn a base salary of $300,000 a year, while both are eligible to receive bonuses equal to 45 percent of their salaries.
Facebook had revenue of $3.71 billion in 2011, up from $1.97 billion in 2010. The company had 845 million monthly active users as of December 31, 2011, an increase of 39 percent from 608 million monthly active users at the end of the preceding year.
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by RTT Staff Writer
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