Zynga, the online game maker behind FarmVille and other popular Facebook pastimes, is going public, the latest in a crop of high-valued Internet initial public offerings (IPOs) expected after LinkedIn Corp showed that the online networking craze is a hot commodity on Wall Street.
Zynga Inc hopes to raise up to US$1 billion in an initial public offering that follows LinkedIn’s sizzling stock market debut last month. The amount of money Zynga is seeking in its IPO will likely change as its bankers determine how many shares should be sold and at what price. That process typically takes three to four months.
There is pent-up demand for the stock of large social media companies because so few of them have gone public, even as they have been steadily expanding their reach for several years. The opening of the floodgates could culminate next year in a long-awaited IPO of Facebook, the biggest social network of them all.
Because of Zynga’s size, strong financials and potential for a valuation of US$20 billion or more at the start, the four-year-old company’s IPO is already drawing comparisons to another high-profile stock-market debut.
“Google came to town like a three-ring circus and this one will too,” said John Fitzgibbon Jr, founder of IPO Scoop, which tracks IPOs. “They’re going like gangbusters, and they’re coming to town with a lot of hype, and I’m sure that will carry over into the IPO and the aftermarket.”
Fitzgibbon cautioned against talk of a “bubble” following the steady stream of recent IPOs.
He and other market watchers say there is a key difference now, compared with Silicon Valley’s fiasco a decade ago.
Although the Internet IPO market is as hot as it has been since the dot-com heyday, there are still comparatively few companies coming to market. And many already have solid financials, having been forced to stay private while the recession sapped investor interest.
“The door is open for the specialty technologies — but, it’s not a bubble,” he said. The dot-com era “looked like a stampede. Right now it’s a cavalry charge. It’s lacking the numbers to call it a bubble.”
Meanwhile, there’s little demand for those who fell from grace. News Corp sold the struggling Myspace — once a social media darling — for a pithy US$35 million on Wednesday. It paid a whopping US$580 million in 2005.
LinkedIn, a service that connects people looking to advance their professional careers, doubled its IPO price in its first day of trading to give it a market value of nearly US$9 billion — the highest for an Internet IPO in the US since Google Inc went public nearly seven years ago. LinkedIn’s co-founder and executive chairman Reid Hoffman, now a billionaire, belongs to Zynga’s board of directors. The daily deals site Groupon Inc has also filed its initial IPO papers.
Zynga is expected to attract even greater interest than LinkedIn did because its games have become a much larger cultural phenomenon. About 230 million people every month play addictive Zynga games such as FarmVille, CityVille and Texas HoldEm Poker.
By comparison, LinkedIn has more than 102 million members.
Zynga makes most of its revenue by charging small amounts of money to buy virtual items in its games. It also makes some money from advertising and partnerships with companies such as Netflix or Vistaprint on special offers. Revenue grew to US$597 million last year from US$121 million in 2009 and US$19 million in 2008.
Zynga was founded in 2007 by CEO Mark Pincus. It has about 2,300 employees, most of them in San Francisco. Private investments earlier this year valued the company as high as US$10 billion well before the IPO.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy