Gustavo Ballvé on December 31st, 2009
Corporate Strategy, Food for thought, Home, Industries, Investment Themes, Media, Portfolio Management, Tech

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)

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