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As a top 10 analyst in recent stock performance and detailed research and strategy notes in banking, retail, logistics and IT services businesses I would be an ideal partner for most entrepreneurs and large company strategists, sales and marketing teams An accomplished presenter, I get frequent... More
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  • Zynga and Facebook joined at the hip 0 comments
    Dec 16, 2009 7:35 AM | about stocks: AMZN, MSFT, GOOG
    Someone finally figured it out, My facebook, Farmville and Mafia Wars profile, access and mood profile are about the same. I am ready to be passionately targeted. I want someone to spend the half an hour I spend on facebook and figure out every sinew in me and guide the way to the wallet.Now I just need someone who can help me earn too (but that's not half funny, with all the spam and scam that comes with it

    Not so funny if you think about it, The same investors in both the companies could be very interesting to the markets when they go for a sale on to the exchanges!! And mark our words, it will be at a valuation far exceeding any $3 billion, stratospheric valuations only count as stratospheric because you have been living in the wrong age.And the wrong fiscal models.

    Something
    that grew 15 times its last year's traffic ( Twitter) or 3-4 times the daily ave time spent ( facebook) or that had revenues not worth talking about and sales estimates have gone up 2.5 times in less than 6 months!  We are probably talking about a conservative $3 billion estimate if they can up the revenue estimate to $1 billion with the $180m in cash

    Did
    you ever wonder what the Brazilians are cooking? They are a pretty big community on Facebook and Twitter too! And they have their own languages like the Chinese which leaves their innovation effort rather a plurk!(Microsoft has withdrawn its Chinese product) you would think. You would be wrong though.



    This
    article in today's NYTimes

    <blockquote>As with Facebook, D.S.T. will invest directly in Zynga while also buying stock from shareholders, including the companys employees. The move is aimed at giving employees and shareholders of the prominent start-up a way to cash out before an initial public offering. Tiger Global, a New York hedge fund, and the venture capital firms Institutional Venture Partners and Andreessen Horowitz also invested. Zynga had previously raised $39 million. The companies did not disclose Zyngas valuation as a result of the new capital, but the game companys annual revenue has been reported to be around $250 million and growing quickly. Two experts in Internet company finance said it would be reasonable for Zynga to command a valuation of two and a half to six times its annual revenue. That could put the value of the two-year-old Zynga at $1.5 billion; one industry insider believes the value could be as much as $3 billion. With the investment, D.S.T. is doubling down on its billion-dollar bet on social networks and online games, which draw people who do not normally play video games into virtual simulations that they can play with friends. Players might spend only a few minutes each day in the game, and are persuaded to pay real money to buy virtual goods, like bales of hay and gasoline for their tractors in FarmVille, a game in which players run a farm. D.S.T. began investing in 2005, mostly in Internet firms based in Russia and Eastern Europe, where, as in Asia, people have adopted social games and virtual goods marketplaces faster than in the United States. “People did not believe that this Chinese model of micropayments and social games was real,” said Yuri Milner, D.S.T.’s chief executive. “I am pretty convinced this market will have tremendous pick-up on the Western side of the world.”</blockquote>

    The images links are here and here

    <div style="float:right;margin-left:8px;"><a href="http://view.picapp.com/default.aspx?term=social sites&amp;iid=6855199" target="_blank"><img src="http://cdn.picapp.com/ftp/Images/1/2/e/5/Okhtacenter_business_district_73b8.JPG?adImageId=8356861&amp;imageId=6855199" border="0" alt="“Okhta-centerbusiness district under construction in St Petersburg" width="234" height="156" /></a></div>

    With DST having picked up a stake in both Facebook and zynga, Farmville and Mafia Wars would be part of more daily lives. Here are some recent Facebook and Twitter stories defining their early impact. Twitter has started testing its contributor feature to allow brands and businesses to set aside a permanent budget for Twitter and Facebook in their business. It will take a lot of business to keep steering this network esp as not just Asia and Eastern Europe is taking more to these networks but also because it is intuitively appealing to all age groups and takes a considerable bit of your time in the 'daily diet'. You can also expect some daily 'interference' from Fans on the more discernible social media than they could on Radio and TV. Scott Tozer of DST Technologies is himself listed on Facebook.

    Also
    see some recent <a href="http://twitterone.com/2009/12/16/internationalisation-works-for-twitter/">'hits'</a>
    This just might be Russia's next ticket after Gas/Oil without Ukraine. Seemingly the Chinese are still counted as the largest population on the internet despite that most social sites are banned in countries like China and Vietnam Our estimate of the valuation of zynga conventionally as not exceeding $1 billion but wih hypergrowth, even $3 billion is cheap. Amazon started the same way and survived the bubble and the credit crisis. Our <a href="http://advantages.us/brands/2009/are-social-friends-an-entry-for-russia-into-global-business/">brands site</a> had the first stab at this story, but we finally gave in too.. Also we think these decision games like Predictify and Filife from WSJ are a good way to latch on to not just brand and consumer behavior but also a great social entrapment which is likely to benefit from <a href="http://huffingtonpost.com/2009/12/15/10-industries-that-will-l_n_392146.html">the job losses and the new digital age</a>, all that money lying with investors ..what a steal!

    After Jeff Bezos, Mark Zuckerberg(Facebook) and Mark Pincus(Zynga) may have risen, but their fortune will be shared among a more fortunate few like Scott Tozer and others behind DST Technologies Here are some recent Facebook and Twitter stories defining their early impact.



    Disclosure: We do not hold any positions in the above stocks or for our clients currently but would be recommend it to our clients
    Themes: Facebook, Zynga, Twitter Stocks: AMZN, MSFT, GOOG
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