Zynga Is In Talks To Buy “Draw Something” Maker OMGPOP. Zynga is in talks to acquire OMGPOP, the maker of massive hit Draw Something, according to a source with direct knowledge of the discussions. It’s my understanding that the talks have not yet entered the more advanced, exclusivity stage because there are still other Japanese buyers like GREE that are interested in the company. When asked for comment, Zynga said it does not comment on rumors or speculation.
Given that OMGPOP has raised around $17 million to date, I’d expect the price for this deal to be in the $150 to $250 million range. (Update: Some readers are asking about the price. So I did confirm that range with two sources who have knowledge of the talks. Plus, Om Malik is also hearing about a bid in the $200 million range. If it did happen, it would be Zynga’s biggest publicly disclosed acquisition to date. For Zynga, this is a question of buy or build. Alternatively, an acquisition at the right price could be a big win for Zynga. This story is developing…. Zynga Just Bought OMGPOP For $200 Million - Peter Kafka. Looks like OMGPOP, the company behind the overnight sensation Draw Something, will end up at Zynga, after all. The game maker had been talking to several suitors over the last few weeks. But as TechCrunch reported earlier, it has been in serious discussions with Mark Pincus and company for the past few days. Now Zynga has scheduled a call for a “news announcement” for 3 pm ET.
I’m going to go out on a short limb and assume it’s to formally acknowledge that they have bought the company. My sources tell me the purchase price will be in the neighborhood of $200 million, perhaps a bit higher. (Update: No limb necessary. No comment from Zynga. Zynga will get a New York-based team of about 40 people, and a series of games that OMGPOP has produced over the past few years. The game is astonishingly popular, and the iPhone app sits atop the iTunes “top paid” and “top free” lists, which is very unusual.
Was Zynga’s Deal To Buy OMGPOP That Disastrous? Here’s Some Perspective. Draw Something, the game that could do no wrong now seems like it can do little right, at least according to the blogosphere. There’s been a string of stories from virtually everyone saying that the OMGPOP acquisition is “haunting” Zynga because Draw Something’s daily active usage is down to 9.1 million daily active users from its peak of 14.6 million daily active users. It’s funny how the press turns (and we know this too well). On the day we broke the story that Zynga was about to buy OMGPOP for what turned out to be $180 million, Business Insider said that our rumored price range was way too low.
When the company sold, they then wrote a story citing Flurry’s CEO that OMGPOP had left $800 million on the table. But now, the story is totally opposite! It looks dismal. 1) Zynga raised its bookings guidance by around $50 to 75 million for the year, mostly on OMGPOP. 2) Games usually peak and then taper off in usage. Here’s what Farmville looked like: True, mobile is a little bit different. Zynga launches Zynga.com, to expand beyond Facebook in a big way. Not all players are the same! Join GamesBeat's Dean Takahashi for a free webinar on April 29th that will explore why players leave Free to Play games and how you can change this.
Sign up here. In a gigantic strategic step, Zynga announced today that it is launching a new Zynga.com destination website where users can play its social games without going directly through Facebook. The move has big implications for the entire social-game industry, and it has been long-awaited by observers who felt Zynga was overly dependent on Facebook. Facebook gets 12 percent of its revenue from Zynga, and Zynga gets more than 90 percent of its revenue from Facebook. Now those numbers are about to change. Financial independence? Zynga is also announcing the Zynga Platform for publishing games that are built by external publishers and developers. Regarding the Facebook Credits option, Schappert said the goal is to make it as easy and accessible as possible to get people to play games. The Zynga Platform. Zynga Launches Its Own Game Platform Off Of Facebook. For Facebook game developer Zynga, the launch of social game platform Zynga.com later this month can be seen as a way to reduce its dependence on the social network.
For game players, it can be seen as the road to speedier game play, while investors would view this as healthy diversification of revenues. Sister blog Inside Social Games has the details announced today on Zynga.com. The platform will launch with five of the developer’s top games: CastleVille;CityVille;Words with Friends;Hidden Chronicles; andZynga Poker. Game players logging into Zynga.com will find their games in the exact condition they were left in on Facebook, and whatever actions they take while playing on Zynga.com will be reflected the next time they access the games via Facebook. The only Facebook features that can be accessed via games on Zynga.com are chat, social discovery of new friend connections, and the live app ticker.
So why is game play faster via Zynga.com? Zynga and the perils of becoming a platform. I will give Zynga this much: It has some serious stones for setting up Zynga.com as a place for its own games and those of third parties to live outside Facebook. And you can’t really blame it for doing so. After all, too much dependence on someone else’s social network — whether it be for users, revenues or both — is never a good thing.
But being a platform provider and an aggregator of entertainment options is a hard business and not one to be taken lightly. The launch of Zynga.com is more than a bit of a reversal for the casual gaming company. Prior to Thursday’s announcement, Zynga and Facebook had a symbiotic relationship where, like the Nile crocodile and the Egyptian plover bird, each party helped the other one out. That might have been a fine relationship to have when Zynga was a scrappy little startup, but now that it’s a publicly traded company, its reliance on Facebook is a huge risk factor for investors.
Investors Push Zynga Stock Up 10% — Now It Can Make Money On Ads And Publishing. Zynga is now officially launching its own web site for social games, and the move has got investors buying its stock. Shares are up nearly 10 percent as of market closing today towards $15 — or 50 percent of the $10 price it went public at back in December. Why? The obvious reason is that the move is a way for Zynga to lessen its reliance on Facebook. But Zynga is still using Facebook exclusively as its identity service and payments system, so it’s not true to say that it’s lessening anything right now.
That is, except for two things: publisher payments and ads. The new site, Zynga.com, will include a range of social communication channels and friend suggestions based on what games people play and how they play them. Zynga is still able to make money here, however. But let’s back up to Credits — Zynga has to use them because of an exclusive five-year deal that Facebook made it sign back in 2009. GagaVille: Zynga And Lady Gaga Announce Major Partnership. In the past, Zynga has landed a number of high-profile partnerships with musicians and entertainment companies, including Snoop Dogg, Dreamworks, Nickelodeon, The Green Hornet and others.
But today, the social gaming giant is announcing its largest entertainment deal to date-with pop star Lady Gaga. Lady Gaga has partnered with Zynga previously, when the company was raising money for releif efforts around the Japanese earthquake and tsunami. On May 17, Lady Gaga and Zynga will unveil, GagaVille – a neighboring farm on FarmVille, which is a Gaga inspired farm in-gam. GagaVille will showcase Lady Gaga’s style and themes from the album and videos (crystals, unicorns, sheep on motorcycles); and gamers will have exclusive access in Farmville to songs from the artists’s new album “Born This Way” before the album is released later in the month. From May 17 to 19, players can unlock and stream a new un-released track per day. Financial terms of the deal were not disclosed. Exclusive: Zynga About to File for IPO. Zynga is poised to file for its initial public offering, according to sources close to the situation. The filing with the Securities and Exchange Commission could come as early as this week, or next week at the latest.
The move is not entirely unexpected, given how well the recent IPOs of several Internet companies have done recently, including business networking site LinkedIn last week and Russian search giant Yandex today. Their strong performances show the huge investor appetite for fast-growing and high-profile Web 2.0 firms. Wall Street is also prepping for eventual public offerings from social buying site Groupon and, the big fish, Facebook. Zynga’s valuation in its last round of funding was $10 billion, but it is likely to price itself higher in an offering. After all, LinkedIn now has a market valuation of $9 billion, double its pre-IPO price. The company claims that it has 250 million people actively playing its games every month.
That’s also meant a solid business.