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Facebook, Zynga Ink Five Year Deal

The agreement extends the Facebook Credits payment system to Zynga games like Mafia Wars and Farmville.
Facebook has announced a five-year "strategic relationship" with Zynga Game Network, ending speculation that the companies were preparing to end their partnership.

Zynga makes some of the most popular social networking games that run on Facebook, including Mafia Wars, Farmville, and Cafe World. The company's games attract 235 million users a month, which is more than half of Facebook's worldwide total of 400 million users.

Facebook and Zynga announced the five-year strategic relationship on Tuesday, saying the agreement provided a "solid foundation for both companies to continue to work together." The deal expands the use of Facebook Credits, a payment mechanism controlled by Facebook, to the Zynga Network.

The use of Credits for payment was a major disagreement between the companies, the blog TechCrunch reported this month. Tuesday's announcement indicated the companies had settled at least their major differences.

"We are pleased to enter into a new agreement with Zynga to enhance the experience for Facebook users who play Zynga games," Sheryl Sandberg, chief operating officer at Facebook. "We look forward to continuing our work with Zynga and all of our developers to increase the opportunities on our platform."

Credits are a form of virtual currency used to buy gifts and virtual goods in games and applications on Facebook. The social network plans to take a 30% cut of revenue generated from games and applications using Credits, which would be required for making payments on the site. The hefty revenue slice is what reportedly angered Zynga.

However, the game maker said in announcing the latest deal that it was currently testing Credits in select games would expand its use to more games over the coming months. Financial terms were not disclosed.

Credits is currently in beta and Facebook has yet to make the system mandatory for developers.

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