Facebook, Zynga change terms of association

Facebook Inc and Zynga Inc have changed the terms of the close relationship they share for years as social gaming moves towards smart phones.

The two companies reported in regulatory filings yesterday said that they had reached an agreement for the amendment of a deal they struck in 2010 that was seen to give Zynga privileged status on the world's No1 social network.

The Zynga stock was down 12 per cent to $2.30 in after-hours trading, while Facebook shares fell 5 cents to $27.27.

The new agreement would give Zynga a freer hand to operate a standalone gaming website, but eliminated the San Francisco game publisher's ability to promote its site on Facebook and to attract users from Facebook's thriving social network of roughly 1 billion users.

Visitors to Zynga's gaming web site would now not be able to tap into their network of Facebook friends. They would also not be able to post messages about their gaming progress to Facebook.

While Zynga games, like `FarmVille' and `Mafia Wars,' would continue to be available on Facebook's social network, they would not feature cross-promotions directing users to Zynga's standalone web site.