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some questions in my Mind as I struggle to bet my money and pension savings on Facebook IPO
1) Revenue Mix- What percentage of revenues for Facebook come from Banner ads versus gaming partners like Zynga. How dependent is Facebook on Gaming partners. (Zynga has Google as an investor). What mix of revenue is dependent on privacy regulation countries like Europe vs countries like USA.
2) Do 800 million users of Facebook mean 100 billion valuation ? Thats a valuation of $125 in customer life time in terms of NPV . Since ad revenue is itself a percentage of actual good and services sold- how much worth of goods and services do consumers have to buy per capita , to give $125 worth of ads to FB. Eg . companies spend 5% of product cost on Facebook ads, so does that mean each FB account will hope to buy 2500$ worth of Goods from the Internet and from Facebook (assuming they also buy from Amazon etc)
3) Corporate Governance- Unlike Google, Facebook has faced troubling questions of ethics from the day it has started. This includes charges of intellectual property theft, but also non transparent FB stock option pricing in secondary markets before IPO, private placement by Wall Street Bankers like GoldMan Saachs, major investments by Russian Internet media corporations. (read- http://money.cnn.com/2011/01/03/technology/facebook_goldman/index.htm)
4) Retention of key employees post IPO- Key Employees at Google are actually ex- Microsofties. Key FB staff are ex-Google people. Where will the key -FB people go when bored and rich after IPO.
5) Does the macro Economic Condition justify the premium and Private Equity multiple of Facebook?
Will FB be the next Google (in terms of investor retruns) or will it be like Groupon. I suspect the answer is- it depends on market discounting these assumptions while factoring in sentiment (as well as unloading of stock from large number of FB stock holders on week1).
Baby You Are a Rich Man. but not 100 billion rich. yet. Maybe 80 billion isnt that bad.
Global Warfare is one of the latest games on Google Plus. There are lots of similarities between this game and Evony at http://evony.com
Global Warfare is made by Kabam https://www.kabam.com/games/global-warfare which is making a total of 3 games for Google Plus (out of 18) and it has Google Ventures as a strategic investor as well (and a member on the board). Google is clearly wanting to bet on online gaming with its earlier strategic investment in Zynga as well. It also acquired http://www.labpixies.com/ (which makes the game Sudoko Puzzles and Flood It but it has more games in reserve as can be seen at https://market.android.com/search?q=labpixies, so clearly G+ is being selective on Games directory at https://plus.google.com/games/directory)
is gaming the ace in hand in G+ plans for Facebook- time will tell.
Evony of course was a very good game, as it was also very similar (allegedly) to Civilization, and though its advertising campaign of semi clad characters draws flak, it got the worlds attention and recall. While Evony was situated in medieval world, Global Warfare is a modern warfare equivalent.
Features in Global Warfare-
- multiple player online gaming,
- social sharing and rewards,
- in game purchases,
- persistent world
- Slight clutter in gaming space (and lack of nice fonts!)
- Lack of help forums (or easy availability)
- Lack of in game search for searching or navigating alliances