Zynga, North or South?

Zynga, has been getting the PR spotlight in tech, gaming, Internet or social media industry for the last couple of weeks. Biggest headline or pressure to launch USD $1 billion IPO offering, largest since 2004 of Google.

First, Zynga has discovered a niche market of 'freemium' business model, it can strike a balance between getting cash from its players (although the margin is low) or it can get it from its advertisers that are interested in a certain set of demographics. There are potential in this market, it hasn't been fully discovered yet and has a lot of growth opportunities. The way I've seen multiple research of eMarketer, a lot of companies will be sure to find alternatives way to invest more into the cyberspace as it has proven return whether it is short or long as the online space has matured a long way since the golden days of its launching.

Second, as a social game company, it can compete with bigger companies such as Electronic Arts and alike. Which is pretty outstanding.

Zynga is not only focusing on its current games as their major assets, it is planning to release new stream of gaming again (possibly pending due to IPO to lift up after its first trading this Friday). As well as an approach to the mobile gaming as this is the second largest stream of revenue with 1 billion mobile on the planet and the growing platform of smartphones. It is a market with a lot of potential even if Zynga decided to just tap into 3 providers, aka iPhone/Apple, Android and Windows Phone. Again they can approach this market with either selling the app itself as a game, the virtual goods or tap into the mobile advertising opportunities.

It's special relations with Facebook, as well as revenue shares will have Facebook ensure it is in their best interest to allow their partner to be successful in their domain. Its presence in several countries such as China and the youth easily addicted to online gaming is another edge. Finally Zynga has over 13 studios under its flag, including the bid for PopCap Games one of the largest successful online game company acquisition will probably catapult them.

Last, who is in the seat of the driver, is he determined? Is he a great leader? Mark Pincus was on the other side of Internet business investment, he was behind several big things from Friendster, Facebook, Yahoo and so on. So he knows the game on two side of the fence and he runs a very tight ship.

I think there is a lot to expect from Zynga if they continue to make great products and the way the social network grows. I guess we'll see their debut on 16 December 2011.

You can read the details of their IPO offering here.

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