Zynga co-founder and CEO Mark Pincus just revealed something about his company's relationship with Facebook that may come as a shock to many. Zynga and Facebook were considering a break up back in 2010.
That should surprise you because the companies are very, very close partners. When Facebook was getting ready to go public, it disclosed that 12 percent of the social networking giant's 2011 revenue came from Zynga. More recently, in Q1 2012, that number was 15 percent (down from 19 percent in Q1 2011), including both payments revenue and advertising displayed alongside Zynga games. Oh, and let's not forget Pincus is a Facebook investor.
So, how bad was it two years ago? Here's what Pincus told PandoDaily (video interview embedded below):
Both companies were very prepared to break up, to go their own way. We were prepared to offer our games off Facebook and they were prepared to not have our games.
Thankfully for Zynga (and Facebook), Pincus had a conversation with Facebook co-founder and CEO Mark Zuckerberg:
I think Mark and I sat in a room till very late at night (he stays up late) and we both said, 'We think that this is in the best interest of our users and our companies and we just have to figure out how to make a partnership work.' At the end of the day I think that we said that we trust each other.
That last part hasn't changed, Pincus says:
We're good friends. I trust him and I trust that he's going to stay true to Facebook's mission. I think that's the only thing that you can count on. That he's going to go whichever direction he thinks is, in the long term, in the interest of Facebook being an interest treasure. For me to figure out where his platform's going and whether that's in alignment with us, I need to look where that is.
It should go without saying that a fall out between Facebook and Zynga would be absolutely terrible for both. I don't buy the "it was in the best interest of our users" crock for this one.
The fact of the matter is Pincus was terrified of losing Facebook as a platform. He knew it would mean the end of Zynga. In fact, it scared him so much he outlined a plan to make sure that if it did happen, Zynga wouldn't suddenly fall of the face of the Earth. That's why the new Zynga.com launched in March 2012 (whether it can save Zynga in such an event is another story).
Facebook would of course survive just fine without Zynga, but losing 15 percent of revenues is nothing to scoff at. Games may not exactly fit into Zuckerberg's mission (to make the world more open and connected) but the young CEO isn't ignorant: he knows his company needs money to keep the wheels turning.