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Happy $100 Billion to Mark Zuckerberg Productions !

Heres to an expected $100 billion market valuation to the latest Silicon Valley Legend, Facebook- A Mark Zuckerberg Production.

Some milestones that made FB what it is-

1) Beating up MySpace, Ibibo, Google Orkut combined

2) Smart timely acquisitions from Friend feed , to Instagram

3) Superb infrastructure for 900 million accounts, fast interface rollouts, and a policy of never deleting data. Some of this involved creating new technology like Cassandra. There have been no anti-trust complaints against FB’s behavior particularly as it simply stuck to being the cleanest interface offering a social network

4) Much envied and copied features like Newsfeed, App development on the FB platform, Social Gaming as revenue streams

5) Replacing Google as the hot techie employer, just like Google did to Microsoft.

6) An uncanny focus, including walking away from a billion dollars from Yahoo,resisting Google, Apple’s Ping, imposing design changes unilaterally, implementing data sharing only with flexible partners  and strategic investors (like Bing)

FB has made more money for more people than any other company in the past ten years. Here’s wishing it an even more interesting next ten years! With 900 million users if they could integrate a PayPal like system, or create an alternative to Adsense for content creators, they could create an all new internet economy – one which is more open than the Google dominated internet ; 0

 

Does Facebook deserve a 100 billion Valuation

some  questions in my Mind as I struggle to bet my money and pension savings on Facebook IPO

1) Revenue Mix- What percentage of revenues for Facebook come from Banner ads versus gaming partners like Zynga. How dependent is Facebook on Gaming partners. (Zynga has Google as an investor). What mix of revenue is dependent on privacy regulation countries like Europe vs countries like USA.

2) Do 800 million users of Facebook mean 100 billion valuation ? Thats a valuation of $125 in customer life time in terms of NPV . Since ad revenue is itself a percentage of actual good and services sold- how much worth of goods and services do consumers have to buy per capita , to give $125 worth of ads to FB. Eg . companies spend 5% of product cost on Facebook ads, so does that mean each FB account will hope to buy 2500$ worth of Goods from the Internet and from Facebook (assuming they also buy from Amazon etc)

3) Corporate Governance- Unlike Google, Facebook has faced troubling questions of ethics from the day it has started. This includes charges of intellectual property theft, but also non transparent FB stock option pricing in secondary markets before IPO, private placement by Wall Street Bankers like GoldMan Saachs, major investments by Russian Internet media corporations. (read- http://money.cnn.com/2011/01/03/technology/facebook_goldman/index.htm)

4) Retention of key employees post IPO- Key Employees at Google are actually ex- Microsofties. Key FB staff are ex-Google people. Where will the key -FB people go when bored and rich after IPO.

5) Does the macro Economic Condition justify the premium and Private Equity multiple of Facebook?

Will FB be the next Google (in terms of investor retruns) or will it be like Groupon. I suspect the answer  is- it depends on market discounting these assumptions while factoring in sentiment (as well as unloading of stock from large number of FB stock holders on week1).

Baby You Are a Rich Man. but not 100 billion rich. yet. Maybe 80 billion isnt that bad.

Google Plus Gaming vs Facebook Gaming

After a few hiccups, Facebook has gotten the notifications scrolling back and much better than Google Plus. This gives it a cleaner advantage in social gaming interface – even for the same game. and of course many more gamers!

Clearly the games stream is much more efficiently designed in FB, probably because they need to earn some ad revenue- that forces you to think more optimally for space. FB interface is also bug free compared to the constant error in G+ (error changing circle membership- ideally I wanted to create one gaming circle for all gaming friends)

See this  – not just compare the games stream/notifications only

vs

Research on Social Games

Social Gaming is slightly different from arcade gaming, and the heavy duty PSP3, XBox, Wii world of gaming.  Some observations on my research ( ;) ) on social gaming across internet is as follows-

There are mostly 3 types of social games-

1) Quest- Build a town/area/farm to earn in game money or points

2) Fight- fight other people /players /pigs earn in game money or points

3) Puzzle- Stack up, make three of a kind, etc

Most successful social games are a crossover between the above three kinds of social games (so build and fight, or fight and puzzle etc)

In addition most social games have some in game incentives that are peculiar to social networks only. In game incentives are mostly in game cash to build, energy to fight others, or shortcuts in puzzle games. These social gaming incentives are-

1) Some incentive to log in daily/regularly/visit game site more often

2) Some incentive to invite other players on the social network

A characteristic of this domain is blatant me-too, copying and ripping creative ideas (but not the creative itself)  from other social games. In general the successful game which is the early leader gets most of the players but other game studios can and do build up substantial long tail network of players by copying games. Thus there are a huge variety of games.

However there are massive hits like Farmville and Angry Birds, that prove that a single social game well executed can be very valuable and profitable to both itself as well as the primary social network hosting it.

Accordingly the leading game studios are Zynga, Electronic Arts and (yes) Microsoft while Google has been mostly a investor in these.

A good website for studying data about social games is http://www.appdata.com/ while a sister website for studying developments is  http://www.insidesocialgames.com/

As you can see below Appdata is a formidable data gatherer here (though I find the top App – Static HTML as both puzzling and a sign of un corrected automated data gathering),

but I expect more competition in this very lucrative segment.

 

 

Zynga Mafia Wars 2 on Google Plus

The latest game on Google Plus is a clone of one of the most important games in social gaming history- Mafia Wars 2. Early days and a more detailed review to follow- but there has been a design paradigm change in terms of icons, fonts and storyline. Will this capture the gamers attention- time will tell?

Global Warfare on Google Plus

Global Warfare is one of the latest games on Google Plus. There are lots of similarities between this game and Evony at http://evony.com

Global Warfare is made by Kabam https://www.kabam.com/games/global-warfare which is making a total of 3 games for Google Plus (out of 18) and it has Google Ventures as a strategic investor as well (and a member on the board). Google is clearly wanting to bet on online gaming with its earlier strategic investment in Zynga as well. It also acquired http://www.labpixies.com/  (which makes the game Sudoko Puzzles and Flood It but it has more games in reserve as can be seen at https://market.android.com/search?q=labpixies, so clearly G+ is being selective on Games directory at https://plus.google.com/games/directory)

With these gaming companies and others like http://www.digitalchocolate.com/about/ and http://www.rovio.com/index.php?page=company and http://www.popcap.com/ – well they are all there on G+

is gaming the ace in hand in G+ plans for Facebook- time will tell.

Evony of course was a very good game, as it was also very similar (allegedly) to Civilization, and though its advertising campaign of semi clad characters draws flak, it got the worlds attention and recall. While Evony was situated in medieval world,  Global Warfare is a modern warfare equivalent.

Features in Global Warfare-

  • Alliances,
  • multiple player online gaming,
  • social sharing and rewards,
  • in game purchases,
  •  persistent world

Some drawbacks-

  • Slight clutter in gaming space (and lack of nice fonts!)
  • Lack of help forums (or easy availability)
  • Lack of in game search for searching or navigating alliances
Overall- a nice addition to the G+ family of games

 

Games on Google Plus get- Faster, Higher, Stronger

I am spending some time and some money on two games on Google Plus. One is Crime City at https://plus.google.com/games/865772480172 which I talk about in this post

http://www.decisionstats.com/google-plus-games-crime-city-or-fun-with-funzio-on-g/

and Global Warfare  https://plus.google.com/games/216622099218 (which is similar to Evony of the bad ads fame, and I will write on that in another post)

But the total number of games at Google Plus is increasingly and quietly getting better. It seems there is a distinct preference for existing blockbuster games , from both Zynga and non Zynga sources Even though Google is an investor in  Zynga, it clearly wants Google plus to avoid being so dependent on Zynga as Facebook clearly is. (more…)

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