Buysiders.com » zynga

CG under fire

IP — Mon, 29 Aug 2011 06:00:05 +0000

The social media IPOs have signaled a return of the dual-class structure: more voting power for the founders/ remaining investors (OK, Google also did it a few years ago). As someone comments in the article below, these high-flying companies do it because they can get away with it – they are in hyper-growth mode at a time of very little growth in the global economy. But Zynga, the “Web 3.0″ game company, is reportedly coming up with a triple-class share structure that gives “innovation” a bad name. Recalling “buyer beware” has never been more important.

Groupon has also lit up the alert board with a “just for employees” memo by its CEO, Andrew Mason – conveniently leaked out immediately to the press – with very detailed accounts of how Groupon will silence its critics when it goes public. Yes, it includes financial numbers previously undisclosed. It’s pre-IPO marketing during the company’s quiet period, a very complicated issue the SEC will probably want to look into. Groupon is one of the most scrutinized companies in the planet right now, and there’s no way such a huge, juicy memo wouldn’t be leaked out.

After LinkedIn, is Zynga next?

IP — Mon, 23 May 2011 15:00:52 +0000

We wrote last Thursday about LinkedIn’s IPO, which closed the first day of trading up almost 110% with some “interesting” valuation metrics. While there’s talk of other Web 2.0/ Socialmedia companies IPOing, Vanity Fair had a recent profile on Zynga – a “Web 3.0″ company, certainly a buzzword we’ll hear a lot in the next few months. We wrote about Zynga before, the first time in December 2009, and we remain interested in the business models arising from social media (if not in the valuations surrounding the sector). In August 2010 we came back to the subject of Zynga, and in January 2011 we commented on Facebook’s then-impressive US$ 50bi valuation. After LinkedIn’s IPO, the “whispered number” has been at least doubled, and tripled depending on the source.

Zynga – competition at last?

IP — Wed, 04 Aug 2010 22:28:29 +0000

For background, we talked about Zynga in the past. It keeps popping up on the news as it reportedly heads for an IPO, and this latest piece asks if it can become the Google of online games. Sure, the business model seems fantastic – precisely what usually attracts competitors. So far they have lacked in scale, focus or whatever it was that didn’t really appear to threaten Zynga. Now Disney is making a move and it’s easy to imagine other players joining the battle.

In the subject of games, just a teaser: Electronic Arts could deserve some investigation. Despite the 7.4% move today, it’s worth US$ 5.7 billion (subtract the net cash and it’s US$ 3.3bi).

Zynga and “Web 3.0″

IP — Thu, 31 Dec 2009 21:20:06 +0000

Anyone who has ever seen his friends posting that they need help in Mafia Wars or that they just won a big hand of poker has come across this company. Zynga Games specializes in games for social media platforms such as Facebook and MySpace. Given the huge user base – Facebook is in the 350mm user figure – and the web-based, easy-access, low-requirement nature of their games, their users also number in the millions. Tens of millions, in fact. And many of them pay cold, hard cash for virtual goods to spice up their gaming experience. In fact, Zynga might well be making more money with Facebook than Facebook itself is.

In paper, the business model seems great. What’s hype and what’s real? We’ll probably get to know this soon, since Zynga is supposedly preparing for an IPO. And whatever becomes of it, it’s a huge reminder that disrupting technologies don’t necessarily imply that the inventors will make the most money – in some cases, any money. For new and old industries, always look at the entire value chain, be it suppliers, service providers, etc.

Mark Pincus, Zynga’s CEO, has been in such a media blitz that’s hard not to believe the IPO rumors. Here’s a collection of articles and videos regarding Zynga or its CEO:

LINKS:

Update (Jan. 4th): The Interactive Entrepreneur – NYT, Jan. 3rd 2010 – Social media in Academia? Yes, but with a business twist: students have to come up with a business plan and present to VCs and whatnots. Some ventures have even taken off. It was inevitable, and as usual we’re skeptical, but if it serves as a shortcut for good ideas…

Fortune’s Brainstorm Tech blog filtered by the “Zynga” tag – the whole page is an interesting read.

Zynga raises $180mm – VentureBeat.com, Dec. 15th ’09 – it’s the same russian investor (Digital Sky Technologies) who had recently invested $200mm in Facebook.

Is Facebook the future of micropayments? – CNN.com, Nov. 12th ’09

Virtual goods start bringing in real paydays – NY Times, Nov. 6th ’09

Inside the App economy – BusinessWeek cover story on Oct. 22nd ’09 (includes the 3rd video on the list below).

Zynga hires seasoned games exec – Joystiq.com, June 30th ’09

VIDEOS:

1) At Charlie Rose, Dec. 29th 2009 (5 1/2 minute excerpt of the roughly 15-minute interview):

2) Two videos at CNN, Dec. 17th ’09:

3) At BusinessWeek.com, Oct. 22nd ’09 (annoyingly, this video loads a 15-second add that can’t be stopped)