Finally, we have some news about the most awaited IPO of the year – Facebook. Apparently, a rumor is floating in Facebook offices that the social networking giant will file its first S-1 before the end of 2011. Mark Zuckerberg has himself said that it is coming, according to a report by Business Insider.
Facebook has long surpassed SEC’s 500 shareholder limit because of which it will be required to disclose its financial data to the public before the end of April 2012.
There are mainly two main reasons why companies choose to remain private – secrecy and control. After it’s forced to disclose its financials, it will lose the advantage of secrecy. Going by the current trend in tech companies, Mark Zuckerberg will be able to maintain a significant amount of control even after going public, thanks to supervoting shares.
It is rumored to have a valuation of around $80 billion currently, and I expect it to go public in the $100 – $120 billion range, assuming it has continued to grow at the same rate in the past few months.
Going public will also enable Facebook to keep its employees happy, by giving them a way to cash out, and become actual millionaires, not just paper ones.
Going by the encouraging response to the Groupon IPO despite being fraught with problems, I expect Facebook will easily be able to list at a $100 billion+ valuation.
A lot of newly minted millionaires are going to be roaming around Silicon Valley soon, thanks to companies like LinkedIn, Groupon, Zynga, Yelp and now Facebook going public.
Zynga, the number one social gaming company in the world, just announced its own social gaming network – Zynga Direct – at the Zynga Unleashed event.
Zynga has been too dependent on Facebook for user traffic in the past, and is apparently trying to change that now. It recently launched games on Google+ too. Zynga will make all its games available on Zynga Direct, while continuing to launch new games on Facebook and Google+.
Zynga’s user numbers had dropped off in the last quarter, as it hadn’t launched any new games. Its profits also took a significant hit, which it attributed to Facebook’s 30% cut in all transactions. On its new network, Zynga will have much better margins than on Facebook, as it won’t have to shell out any cut to anyone.
Zynga plans to raise almost $1 billion through the IPO route soon, but its planned IPO has been delayed due to turbulent macro conditions leading to the IPO window closing down for many tech startups.
Zynga also announced three new titles, which will be compatible with Facebook’s new iPad app.
The virtual goods market is set to explode in the coming years, and Zynga is currently the biggest player in social gaming. However, it hasn’t had a major hit in a few months, while EA, its largest competitor, has hit it off with Sims Social.
Today, Electronic Arts announced that it was acquiring PopCap Games for $750 million in cash and stock, plus up to $550 million in earnouts over the next couple years contingent on some revenue targets. Rumors of the acquisition started last month, after a report by Techcrunch.
PopCap was started eleven years ago, and is now of of the biggest creators of social games like Bejeweled, Plants vs Zombies, Baking Life and Zuma Blitz with nearly 17.5 million monthly active users.
This isn’t EA’s first acquisition in the social gaming space. It acquired Playfish in 2009 for nearly $300 million and has subsequently been able to become one of the biggest names in social gaming with more than 30 million monthly active users.
EA is still far behind Zynga, but with too much competition, acquisitions like these are the only way to grow fast in this exploding space of social gaming. Zynga is expected to raise close to $1 billion in the coming months, via the IPO route. Activision, EA’s closest competitor, may also be planning to snatch a few social gaming companies in the future.
Zynga, the social gaming giant, which created games like Farmville, Cityville, Frontierville and Zynga Poker has finally filed its S-1 with the SEC. According to its S-1 filing, Zynga aims to raise about $1 billion in the offering, implying a valuation of close to $20 billion. The IPO will be underwritten by Morgan Stanley, BofA Merrill Lynch, Barclays Capital, Allen & Company, Goldman Sachs and J. P. Morgan.
Zynga was founded in 2007 by Mark Pincus, and has been the creator of some of the most popular games on Facebook. It has grown extremely fast, either organically or through acquisitions. It makes most of its revenues by selling virtual goods to Facebook users who play its games. While it does have millions of users, whether or not it will be able to monetize them well and generate enough revenues to justify the $20 billion valuation is what many are worried about. It places Zynga at a valuation which is roughly the same as EA and Activision Blizzard combined.
It had revenues of $597.46 million in 2010, and made close to $235 million in revenues in the first quarter of 2011. While it has good revenue figures, its net income and profit margin isn’t all that impressive considering that its primary product is virtual goods. It had a net income of just $90.56 million in 2010, implying a P/E of 222. It has had tremendous growth in the past 2-3 years, but it seems to have plateaued in the last couple of months.
Besides, the very first risk factor that they state in their S-1 says it all: “if we are unable to maintain a good relationship with Facebook, our business will suffer”. Zynga’s entire business depends on its relationship with Facebook. It has been trying to expand its offerings to other platforms, but without much success.
News of the Zynga IPO will undoubtedly trigger discussions of whether we are in a tech bubble, which even I’m starting to believe now. Zynga may turn out to be the Pets.com of 2011.
Check out the complete Zynga S-1 filing at the SEC.
EA may be in talks with PopCap Games, the creator of popular games like Bejeweled and Plants vs Zombies about a possible acquisition. A report by Techcrunch suggests that EA may be planning to buy PopCap for a sum over $1 billion.
PopCap has raised just about $22.5 million in funding so far, so it would obviously mean a huge payoff for its investors and founders. With PopCap’s revenues hovering around the $100 million mark, the acquisition figure is at a 10x revenue multiple.
EA acquired Playfish in 2009 for around $400 million, but is still trying to become the dominant player in the mobile and social gaming space. With the PopCap acquisition, EA might just manage to do that. Other major players in the space include Zynga and Rovio Mobile.
With the acquisition, EA may be able to boost its games portfolio to rival that of Zynga’s.
The deal is expected to close in a day or two. We will keep you updated.
The original Kingof social browsers is as good as dead. The Flock web browser will dieon April 26th. Back in January, we told you that Zynga Acquires Flock; May Take Social Gaming To A New Level. As you probably know, Zynga is the social gaming power-house behind Farmville, Mafia Wars and a dozen other popular social games.
What wasn’t expected by many Flock users, was that they’d be abandoned so quickly, without anything to take Flock’s place. I just received my End of Supportletter today. Apparently they made the announcement on April 13th.
Flock said the following it their FAQ:
Flock will no longer be actively maintained, which means you can keep using the product, but key features will stop working after 4/26/11 and over time the browser will no longer be secure as software updates and upgrades will no longer be provided.
Here was one of the immediate responses from the Flock faithful.
David S: This sucks big time! Zynga’s decision to shut down this fabulous browser is an outrage and should be condemned. I have officially boycotted all other Zynga products and encourage others to do so as well. â€¦ I curse the day they purchased the property â€¦
Since Zynga has decided to kill the Flock browser, what do they recommend that their users do now? Here’s what they said:
There are many browser choices. We recommend either Google Chrome or Mozilla Firefox.
I think most people expected that Zynga/Flock would work on a new browser that is designed to work with social gaming. All bets are off now, but if you still want to use a good social web browser, I’d recommend Rockmelt, which gives you built-in access to Facebook and Twitter.
Here we go again. A new Facebook scam is currently underway where users are clicking on links which promises to give them 4000000 coins and 400 cash from a website. The scam is spread through a message posted on the wall saying "OMG !! I CANT BELIVED IT WORKED !! IVE JUST GOT 4000000 COINS AND 400 1CASH FROM THIS WEBSITE CHECK IT OUT NOW – DONT MISS OUT -[redacted link]"
Clicking on the link redirects you to a website which asks you to share the page twice and link the page twice and then post a message 10 times on CityVille related pages or CityVille related websites.
I used my test account to perform the things told by the website and don’t be surprised when I say that it didn’t work at all. This thing also has scam written all over it, so please avoid it. Also, this website is created using a free website creator.
CityVille is the most popular game on Facebook created by Zynga, and there are bound to be people who take advantage of users run out of coins to play the games. Most of the Zynga games (and other games on Facebook) allow you a certain amount of coins/credits each day. Once you run out of them you can either purchase more coins/credits using actual money or undertake a survey to earn them for free.
Since people are so eager to get coins/credits to start playing again without spending money, such scams are highly successful. They don’t give you anything but fool you nevertheless.
Speculative reports put up social gaming giant Zynga’s worth in the $7-10 billion range. The makers of Farmville, Mafia Wars and other Facebook games are minting money for their games in the fundraiser market. For a company that makes all its money from social games on Facebook, it’s pretty incredible and makes us all wait for its next big hit. Noâ€¦ wait, we aren’t waiting for any game from Zynga.
Wall Street Journal reported that Zynga was close to raising $500 million in a fundraising round with investors:-
San Francisco-based Zynga is in talks with a group of new investors, including T. Rowe Price Group Inc., Fidelity Investments and Morgan Stanley for the fundraising round, these people said. An existing investor, Kleiner Perkins Caufield & Byers, is also likely to participate with a small investment, one of these people said.
Earlier, Zynga was in a position to get $250 million invested and have a valuation of $7-9 billion, according to the report. The social gaming giant is quite the pet of investors even though some of its profits are shared with Facebook. The explosive growth, per se, of Zynga contributed to much of the love given to it by the investors. However, though the company has tried to de-link itself from Facebook with some games, the success of Zynga is still largely due to Facebook.
Nevertheless, while this round of investments clearly helps the casual Facebook game lover, the core gaming value of the games are pretty much zero. These are not realvideo games, whatever they may claim.
While Facebook is getting billions of dollars as investment, one of it’s success stories Zynga (which is worth $5billion too) is ramping up it’s offerings and buying Flock, the social web browser.
Flock, which was initially written on the Gecko engine from Mozilla Firefox and later shifted to Chromium which powers Google Chrome was one of the first browsers which was created specifically for social networking and connecting with people. It now looks like Flock will be a part of Zynga and possibly convert into more of a social and social gaming experience.
TechCrunch has reported the deal and also said that both Google and Twitter were interested in buying Zynga, however, not for the browser but for the engineering talent behind it.
Nevertheless, Flock has not been a huge success, so the idea of Zynga buying it does not makes much sense, unless that Zynga is either planning to integrate their social gaming experience into the browser or are going to use the engineering team to build more social games for users.
Zynga is the company behind popular Facebook games such as Farmville and Cityville. The details of the deal is not known, but it should be anywhere between $50-$200 million. We’ll update when more information becomes available.
Yahoo has released a new beta of their popular desktop IM chat software, Yahoo Messenger 11. The new version of Yahoo messenger allows you to play games with friends including several popular ones from Zynga.
Yahoo Messenger 11 beta is now available for downloads and it includes social gaming. Yahoo had become more serious about the social gaming phenomenon when they partnered with Zynga to bring the popular Facebook game Farmville to the Yahoo network. Yahoo Messenger 11 Beta will include games such as Fishville and Mafia Wars from Zynga; Balloono, Pool and Draw My Thing from OMGPOP; and Happy Harvest and Happy Manor from Elex.
In addition to social gaming, Yahoo Messenger 11 Beta will also allow you to manage all your social networks from one place, including Twitter and Facebook. Users can download the beta version of Yahoo Messenger 11 from here.