Transfer Pricing Associates

Apple's Patent May Wreak Havoc on Facebook

post Monday February 27, 2012


Apple’s recently awarded patent may put Facebook out of the running in an important growth area, social gaming and monetization. Social monetization, in games like those from Zynga, currently provides a significant revenue stream for Facebook, and Apple’s patent raises many questions about the future of the social network’s media revenue. Facebook receives a 30 percent cut of all transactions in games using Facebook credits, amounting to over $445 million from Zynga alone in 2011.

This patent is not out of left field, but was applied for in 2006 and directly opposes the Facebook credit system. According to CBS news, the patent provides Apple the rights to:

So where does this put Apple? Based on past events, we know that Apple is more than willing to throw its weight around with other mobile computing businesses, seen largely with its case against Samsung. With the release of iPhone 5 looming, as well as other products on the horizon, how will Apple use its hard won patents to grow its operations? It largely depends on how the courts will define media, but there will likely be new information forthcoming.

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