Part of Zynga's profitability is most likely due Facebook's extraordinary reach and it's likely that off Facebook they may not do or grow just as well. I haven't played their games though…

Apple has now moved up the stack into ads, putting them in the attention-monetization business, just like a lot of their suppliers/devs. I might revise my investing thesis for iPhone app devs because of this.

Still, Apple will never have the same level of power over it's devs that FB does over theirs because mobile is a somewhat healthy market with Android, Blackberry, (HP) WebOS, etc., and perhaps most importantly Web Apps/HTML5. Where can FB devs go when FB mistreats them? Myspace…?

I was referring to the frictionless opportunity. I can't stand PayPay either – from my perspective, after the initial innovation, the service has not evolved at all. In fact, when I see PayPal as the only payment option, I typically abort a potential transaction immediately, unless it's something I really want to buy. Just not worth the annoyance.

Facebook's opportunity here is to offer the exact opposite experience for users. If they offered a “Pay w FB” button that would be a huge improvement over PayPal on the two attributes you highlighted – trust & UX. On the experience piece, it's almost too easy… they'll already have our payment info, so paying would be a snap.

While it wasn't what I was suggesting, I do believe there will be other adjacent revenue opportunities in Facebook's “wallet” business ranging from virtual currency to points programs to possibly the most obvious way to leverage the social graph – and biz model du jour – group buying (Beacon 2.0?). At the very least, they'd be able to cull all that transaction data to feed back into the behavioral ad business. No matter which path they wind up traveling, these two revenue streams clearly offer a scenario where the sum is greater than the individual parts.

BTW, I should have mentioned Apple alongside Amazon. Narrower business focus today, but that can obviously change. In fact, I've recently been wondering why they don't offer the credit card phone gadget their Apple Store employees use to compete in the offline market Square is going after.

Interesting parallel

10-days back I made a comment on a friend's blog suggesting FB will launch an ad network that will be better than Adsense. With “Like” button, they have superior information. Check my comment here.

http://frontiernxt.com/blogs/shyam/audacity-pok…

If Zynga, for example, needs to lay out 75% of revenue between ads and payments to continue its desired growth plan, it's probably an easy choice to move away from FB. If it's “just” 35-40% of revenue, well, then the other choices probably aren't all that enticing. Of course, Zynga also has enough consumer momentum that they may have a choice that others lack.

I also agree with the overall premise: FB can certainly do anything legally in its power to extract value from its partners *but* there will be a “willingness to invest” impact. It is no different than the defect of big retailers from Amazon's ecomm platform to whether an oil company wants to buy a field in Venezuela today. Investors and partners loathe playing on fields that suddenly tilt mid-game.

I do agree with your original comment that they are vastly different development, launch and marketing cycles, however. It's amazing how quickly you can get something out and versioned on these new platforms. Of course, the ratings and comments can live forever on an app store and I think some developers forget that.

“The former will come from harvesting all the data they capture to have the only behavioral ad platform that poses any threat to Google's dominance at all.”

mechanics: they launch off FB display ad network. user who Likes Avatar gets shown Avatar 2 ads. Very clear to me how this works and they make $.

“explicit – data stream should manifest at the point of purchase. “

mechanics: Are you just saying they would have a payment system that would have lower friction because users are already FB connected in? Or would there be other ways to monetize.

Amazon & Apple are both possible counterbalances as both have giant db's of credit cards and lots of user trust. Agree would like to see them get more aggressive off of their own properties. Personally I've always disliked Paypal from a trust and UX pov and would like to see them go.

I realize this is a tangential argument, though I don't think it's a matter of “if FB payments move beyond FB.” Facebook's intention is quite obviously to become the online identity for the masses. If they succeed in doing so, they'll have the ability to monetize users' implicit and explicit attention streams.

The former will come from harvesting all the data they capture to have the only behavioral ad platform that poses any threat to Google's dominance at all.

The other – explicit – data stream should manifest at the point of purchase. As a company that has taken some calculated steps to build a user base, expand key features and begin to offer those features web wide, why would they stop short at the point when they've got the key piece in place, their own currency, that potentially changes the game? If this Facebook has proven one thing, it's that their ambition is gargantuan. From an outsider's perspective, I think it will give them great pleasure to crush PayPal, alongside their impending war w Google.

Personally, I'd love to see Amazon be more aggressive in this space to keep *some* balance and fairness in place.

As to control, no individual has unchecked authority or absolute control over a multi-billion dollar business, not even it's CEO. There's a board which has final say, and precise control requires knowledge of every detail.

Straight off the top, off what Zynga might now consider profit. Or maybe, what Facebook might now consider profit.

What would that be off Zynga's valuation? some multiple + > future risk? $1b? $2b? more?
With all the talk of Facebook revenue models, $200m is pretty solid rent to show, for-one-site. Wonder what it's going to cost Southwest Airlines, Lady Gaga, or the rest of the internet to communicate to their Fan page followers in 2012…

Arguably, Zynga has the most leverage out of the developers. If Facebook is willing to shoot Zynga in the head, how hard will Facebook squeeze the lemon of the small developers in the future, because they can? or if at some point they need to.