Facebook IPO Filing Shows Details of Its Payments Business
Facebook Inc. generated about $557 million in revenue from its payments business last year, according to its S-1 filing.
The social networking giant filed its Initial Public Offering this week. In its filing, the company finally made clear to outsiders how relevant its payment business is to its overall 2011 revenue of $3.7 billion. The remainder of its revenue comes from advertising.
Its revenue from payments and fees dramatically increased to $106 million in 2010 from $13 million in 2009. The company's digital currency, Facebook Credits, became mandatory in July, 2011, for nearly all game developers accepting payments at the social networking site, according to the filing.
Facebook also gave potential investors details on its partnership with Zynga Inc., the social game developer behind the hit Facebook game FarmVille. Zynga has entered its own pacts with financial services companies, such as Discover Financial Services.
In an agreement that ends May 2015, Facebook retains "up to 30% of the face value of user purchases in Zynga's games on the Facebook Platform," Facebook said in its filing.