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JPMorgan Fund to Buy 10% of Twitter

Posted Mar 1st 2011 11:00AM by Connie Madon (RSS feed)
Filed under: Internet, JPMorgan Chase (JPM)

Goldman Sachs (GS) was among the first banks to show interest in social networks with its effort to buy into Facebook. It seems the idea is catching. Now, JPMorgan Chase (JPM) began its own fund called the Digital Growth fund, according to the Financial Times.

The fund is in talks to buy 10% of Twitter for $450 million, according to the report. That would value Twitter at $4.5 billion.

Continue reading JPMorgan Fund to Buy 10% of Twitter

Latest Zynga Valuation Estimate: $5 billion(!)

Posted Apr 7th 2010 11:30AM by Tom Johansmeyer (RSS feed)
Filed under: Internet, Google (GOOG), Microsoft (MSFT), Technology

I already had trouble wrapping my head around a $3 billion valuation from Zynga back in February. But the latest big number is just inconceivable. SecondShares, which is run by former private equity analysts to determine how much private equity companies would be worth if they went public, pegs the value of this social games company at $5 billion, approximately 75% above its current trading in illiquid secondary markets for private companies.

Several factors are used to determine a private company's valuation, including prices for employee stock options. Of course, private company valuation can be squishy under any circumstances, but fast-moving social media companies with penchant for secrecy make the process more difficult.

Continue reading Latest Zynga Valuation Estimate: $5 billion(!)

Social Games Player Zynga Is #2 on PayPal

Posted Mar 23rd 2010 2:40PM by Tom Johansmeyer (RSS feed)
Filed under: eBay (EBAY), Citigroup Inc. (C)

The fact that eBay (EBAY) is PayPal's largest merchant isn't exactly surprising. The auction market is huge, and it's also the online payment company's parent. Yet, the word out of the 2010 Media Summit in New York last week is that Zynga, the social media games company, is the second largest merchant for the payment environment. Social games are growing rapidly, bolstered in large part by the rise of Facebook, which now boasts around 400 million users.

As social media companies realize they need to move to the next level -- from adoption to revenue -- the virtual goods market has emerged as a substantial revenue stream, and Zynga's environment appears to have been designed to capitalize on it. According to an estimate by Citigroup (C) analyst Mark Mahaney, PayPal took care o$500 million in virtual goods payments last year.

Continue reading Social Games Player Zynga Is #2 on PayPal

Zynga Valuation Said to Top $3 Billion

Posted Feb 22nd 2010 9:00AM by Tom Johansmeyer (RSS feed)
Filed under: Internet, Microsoft (MSFT), Electronic Arts (ERTS), Media World, Technology

Are you still suspicious of the $6.5 billion Facebook valuation that resulted from Digital Sky's $100 million investment last July? And doubtless, the $15 billion valuation implied by Microsoft's (MSFT) 2007 investment in the company was, to say the least, aspirational. Well, the insanity is continuing to mount – throughout the Facebook ecosystem. A recent report by Global Silicon Valley Partner's NeXt Up Research organization puts the price tag of Zinga, the Facebook application developer, at a whopping $3.3 billion ... half of Facebook's!

Granted, Zynga has done a few things to wow social media market-wachers and investors. NeXt Up Research forecasts 35% growth for this company over the next four years and just upped its 2014 revenue projection to $1.1 billion. The previous estimate was only $460 million. What could possibly justify these numbers? Well, Zynga has grown from 30 million users to 230 million in only 10 months, largely as a result of the strength shown by Facebook over this period. Farmville has been the company's engine, with close to 80 million monthly active users.

Continue reading Zynga Valuation Said to Top $3 Billion

Major Facebook Investor Pumps $180 Million into Zynga

Posted Dec 17th 2009 10:30AM by Tom Taulli (RSS feed)
Filed under: Next Big Thing, Initial Public Offerings

When it comes to social networking, Mark Pincus is a pioneer. After all, he is the creator of Tribe.net, which got its start back in 2003. Then, in July 2007, he started another social network for games, called Zynga. It's become an addicting service -- and one that has grown like a weed, with popular games like FarmVille, Mafia Wars and Cafe World. There are now about 230 million monthly active users.

The success has also attracted eager investors. In fact, this week Zynga snagged a cool $180 million from Digital Sky Technologies (there was no mention of the valuation on the deal). Based in Russia, the main investor is also a major shareholder in another top social network, Facebook.

Continue reading Major Facebook Investor Pumps $180 Million into Zynga

Zynga scores $29 million in venture capital

Posted Jul 23rd 2008 4:57PM by Tom Taulli (RSS feed)
Filed under: Electronic Arts (ERTS), Small Business

The smart money continues to pour into social networking deals. The latest comes from a tier-one VC: Kleiner Perkins Caufield & Byers.

Today, the firm announced a $29 million round for Zynga Game Network. Essentially, the company combines two hot categories – social networking and casual games.

No doubt, this deal is a big validator. After all, Kleiner only cares about companies that have the potential of being game-changers.

So, what makes Zynga different? Well, for the most part, the company has devised innovative techniques to create highly addictive games (some say the process is scientific). Plus, there are opportunities to expand onto mobile platforms and to even create virtual worlds.

Keep in mind that Kleiner has invested in a variety of break-out gaming companies in the past, such as Electronic Arts Inc. (NASDAQ: ERTS). In fact, a Kleiner partner, William "Bing" Gordon – the former CEO of EA – will come on the board of Zynga.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.