Stuck Like Glue: Zynga Accounts for 12 Percent of Facebook Revenue in 2011

Zynga is mentioned 24 times in Facebook’s filing, but the most notable mention is related to the game company’s huge contribution to the social network’s top line.

Facebook said today in its filing with the Securities & Exchange Commission that Zynga accounted for approximately 12 percent of the company’s revenue last year when Facebook’s revenues totaled $3.7 billion.

The revenue came from both its 30 percent payments processing fee related to the sale of virtual goods from games, such as FarmVille and Words With Friends, but also from advertising purchased by Zynga.

Additionally, Facebook said Zynga’s apps generate a large number of pages on which it displays ads from other advertisers.

The dependence on Zynga is so significant that Facebook warns that if it fails to maintain its relationship with the game maker, or if Zynga’s popularity declines, its financial results may be adversely affected.

Even more notable perhaps is that it’s not just Zynga. Facebook said social games are currently responsible for “substantially all of our revenue” when it comes from payments.

In December, Zynga went public, raising $1 billion, and is obviously one of the companies most reliant on the social network. But now with Facebook’s financials also public, we can see that the two companies are actually interdependent.

And, in fact, over the past three years, Zynga’s importance has only increased. In both 2010 and 2009, Zynga accounted for less than 10 percent of Facebook’s revenues.

The big turning point occurred in May 2010 when Zynga agreed to use Facebook Credits as its primary payment method inside games. As part of that, Facebook would collect 30 percent. That contract will expire in May 2015.

Some of the details of that contract were disclosed as part of Zynga’s public offering, but we wouldn’t be surprised if Facebook is also required to publish it at some point. In the version Zynga released, a lot of the contract was redacted.

In after-hours trading, Zynga was trading about 4 percent higher to $11.02 a share, nearing it’s all-time high of $11.50.

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— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald