Zynga 2012 Annual Report Download - page 19

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them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and our Proxy Statements for our annual meetings of stockholders, for the last year. These filings are also available
for download free of charge on our investor relations website. Further, a copy of this Annual Report on Form 10-K
is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the
operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.
We webcast our earnings calls and certain events we participate in or host with members of the investment
community on our investor relations website. Additionally, we provide notifications of news or announcements
regarding our financial performance, including SEC filings, investor events, press and earnings releases as part of
our investor relations website. Investors and others can receive notifications of new information posted on our
investor relations website in real time by signing up for email alerts and RSS feeds. Further corporate governance
information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters,
and code of conduct, is also available on our investor relations website under the heading “Corporate
Governance.” The contents of our websites are not incorporated by reference into this Annual Report on Form
10-K or in any other report or document we file with the SEC, and any references to our websites are intended to
be inactive textual references only.
ITEM 1A. RISK FACTORS
We have identified the following risks and uncertainties that may have a material adverse effect on our
business, financial condition or results of operations. The risks described below are not the only ones we face.
Additional risks not presently known to us or that we currently believe are not material may also significantly
impair our business operations. Our business could be harmed by any of these risks. The trading price of our
Class A common stock could decline due to any of these risks, and you may lose all or part of your investment. In
assessing these risks, you should also refer to the other information contained in this Annual Report on
Form 10-K, including our condensed consolidated financial statements and related notes.
Risks Related to Our Business and Industry
If Facebook changes its standard terms and conditions for developers in a way that is detrimental to us, our
business will suffer.
Facebook is currently the primary distribution, marketing, promotion and payment platform for our games.
To date, we have derived a significant portion of our bookings (81% in 2012) and revenue (86% in 2012) and
acquired substantially all of our players through Facebook. We expect to continue to derive a significant portion
of our bookings and revenue from the Facebook platform for the foreseeable future. Except for the addenda
described below, we are subject to Facebook’s standard terms and conditions for application developers, which
govern the promotion, distribution and operation of games and other applications on the Facebook platform, and
which are subject to change by Facebook at its sole discretion at any time. If Facebook changes its standard terms
and conditions in a way that is detrimental to us, our business would be harmed and our operating results would
be adversely affected.
We have entered into two addenda to Facebook’s standard terms of service that govern the distribution,
promotion and operation of our games through the Facebook platform. The first addendum required us to use
Facebook Credits as the primary payment method for any of our games that are either on the Facebook platform
or that utilize the data from the Facebook social graph, and requires Facebook to remit to us an amount equal to
70% of the price stated to our players. The second addendum obligated us to use Facebook Credits as the sole in-
game payment mechanism in any games launched on our own social gaming network, and entitled Facebook to
retain 30% of the stated price for transactions on our network. The second addendum also required us to use
Facebook as the exclusive social platform for the Zynga properties and to exclusively launch certain of our
games on the Facebook platform for up to twelve months, subject to certain exceptions.
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