Well If Zynga name is not heard to you and if you don't know whats Farmville, probably you are showing the first signs of aging ......(Assuming your are basic e-savvy as my Blog can be read only Online ) !!! :) :)
Zynga makes online game apps like Farmville , Texas Hold'em etc. for Social Networking Sites like Facebook.
In fact today , as we know ,Facebook is to social networking what Google is to search.
Now as per this source (http://mashable.com/2011/01/17/facebooks-ad-revenue-hit-1-86b-for-2010/) , Facebook's Ad revenues in 2010 was USD 1.6 Billion. Well huge , but not staggering , if people are talking about Facebook being Valued at close to USD 100 Billion (http://www.theregister.co.uk/2011/06/14/facebook_ipo/). Thats a P/S Multiple of over 60 !!! That is huge .... As a comparision lets take google for an example. Today Google's Market cap is USD 202 Billion. Its revenues in 2010 were USD 29 Billion. So it is enjoying a P/S multiple of 6-7 only !!!! The multiple enjoyed by Facebook is 60 , in fact 10 times more than Google.
Now, P/S is a ratio, which has many eminent followers. The CEO of a Billion Dollar US Semiconductor company propounded the P/S ratio as the most significant ratio. And, when I was working as Corporate BD Manager for his organization , I was told to dig specifically into trailing or forward P/S ratios to get an indicative value of a prospective M&A Target. In fact , the CEO himself , had in past made truck loads of money through his apparantly simple principals of Price vs Sales (P/S) ratio.
So coming back to the Facebook vs Google example. If Facebook's IPO (soon to come) really show that it is valued at USD 100 Billion , then there is some need for introspection into the Social Newtorking and Gamification market.
Gamification takes Social Networking to the next level. Zynga makes Games for Facebook. So it looks like a very Natural Symbiotic Relationship between the two. But where does Zynga gets its revenues from. Well, Zynga had its IPO today and got valued at around USD 7 Billion. No mean money and its a profitable company already with annual revenues close to USD 1 Billion. Zynga makes money by selling virtual products in exchange of real cash. That is , you buy virtual furtinute or fertilizers in Farmville , by paying real money through your Credit Cards. Sound silly , right !!! But , this model is generating Billions for Zynga in Hard Currency.....
Hope to keep an eye on Social Networking vs Gamification Relationship ..... Its getting more Social Out here :)
Zynga makes online game apps like Farmville , Texas Hold'em etc. for Social Networking Sites like Facebook.
In fact today , as we know ,Facebook is to social networking what Google is to search.
Now as per this source (http://mashable.com/2011/01/17/facebooks-ad-revenue-hit-1-86b-for-2010/) , Facebook's Ad revenues in 2010 was USD 1.6 Billion. Well huge , but not staggering , if people are talking about Facebook being Valued at close to USD 100 Billion (http://www.theregister.co.uk/2011/06/14/facebook_ipo/). Thats a P/S Multiple of over 60 !!! That is huge .... As a comparision lets take google for an example. Today Google's Market cap is USD 202 Billion. Its revenues in 2010 were USD 29 Billion. So it is enjoying a P/S multiple of 6-7 only !!!! The multiple enjoyed by Facebook is 60 , in fact 10 times more than Google.
Now, P/S is a ratio, which has many eminent followers. The CEO of a Billion Dollar US Semiconductor company propounded the P/S ratio as the most significant ratio. And, when I was working as Corporate BD Manager for his organization , I was told to dig specifically into trailing or forward P/S ratios to get an indicative value of a prospective M&A Target. In fact , the CEO himself , had in past made truck loads of money through his apparantly simple principals of Price vs Sales (P/S) ratio.
So coming back to the Facebook vs Google example. If Facebook's IPO (soon to come) really show that it is valued at USD 100 Billion , then there is some need for introspection into the Social Newtorking and Gamification market.
Gamification takes Social Networking to the next level. Zynga makes Games for Facebook. So it looks like a very Natural Symbiotic Relationship between the two. But where does Zynga gets its revenues from. Well, Zynga had its IPO today and got valued at around USD 7 Billion. No mean money and its a profitable company already with annual revenues close to USD 1 Billion. Zynga makes money by selling virtual products in exchange of real cash. That is , you buy virtual furtinute or fertilizers in Farmville , by paying real money through your Credit Cards. Sound silly , right !!! But , this model is generating Billions for Zynga in Hard Currency.....
Hope to keep an eye on Social Networking vs Gamification Relationship ..... Its getting more Social Out here :)
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