Virtual currency has fast become a multi-billion dollar industry. It's
the juice that could propel Facebook to great IPO heights, and has already served as the foundation for other billion-dollar businesses,
like social gaming giant Zynga.
In fact, a study released yesterday from Juniper Research predicts that the amount of money being spent on virtual currency in mobile apps is going to more than double in the next four years, going from $2.1bn last year to $4.8bn by 2016.
We may be in a bubble, but you wouldn't necessarily know it considering the latest generation of internet IPOs.
Groupon's stock is trading below its first day closing price, Zynga's stock closed below its issue price when it debuted last week and the market didn't seem too excited about the spin-off of TripAdvisor from Expedia.
So what gives? If everyone knows that the internet is the real deal, why aren't these new issues selling like hotcakes? Here are five reasons.
In these times of recession, online gaming is a boom industry, as witnessed by Zynga’s IPO today.
The deal values Zynga, the maker of FarmVille and CityVille, at $9bn and is the largest US internet IPO since Google raised $1.9bn in 2004.
A lot is made of 'corporate culture' and many companies are keen to develop cultures that promote the success of both their businesses and employees.
But building a corporate culture is hard work. Case in point: the recent reports that Zynga was seeking to claw back equity from some employees has sparked a discussion about corporate culture in Silicon Valley, which can stereotypically be summed up as, "Work hard, work harder until you get bought out or IPO".
Joining a young startup that goes on to become big is the stereotypical Silicon
Valley 'dream.' And for employees lucky enough to have joined companies
like Google, YouTube, Facebook and Groupon early on, dreams do come
Thank the Silicon Valley-originated practice of granting equity to
employees for that. To attract the best and brightest, most technology
startups have little choice but to give their employees an ownership
stake in the companies they're helping build.
It's the Silicon Valley
tradition that has become a standard, and for the employees who join
startups that go on to do great things, equity can be the basis for
fortunes large and small.
If you've followed the rise of social gaming over the past several years, you might have drawn the conclusion that social gaming companies like Zynga, which is gearing up to go public, and Playfish, which was acquired by EA, represent the future of gaming.
After all, while there's no doubt that hardcore gamers aren't disappearing, the tens of millions of users playing casual games like Farmville on social networks, namely Facebook, vastly outnumber the number who are buying the latest and greatest consoles and gaming rigs.
Are we in a tech bubble?
There debate is only growing, and while it may not really matter to most of us, there are ten particularly worrying signs for those who have expoure to companies that are running on VC fuel and may need to go public in the near future.
The IPO market is alive! From Yandex to LinkedIn, some of the most
prominent consumer internet companies in recent memory have gone public
recently, and more are on the way.
One of the most intriguing filed to go public late last week. Zynga, the
social gaming juggernaut which is responsible for modern-day hits like
Farmville, plans to raise $1bn.
There’s no denying it. Gamification is hot. We talked recently
with Gabe Zichermann, entrepreneur and author of “Game-Based Marketing,” about
how fun and gaming techniques are permeating every aspect of marketing, and
what it means for measurement.
The rise of social networking has resulted in major shifts in the gaming industry. The rise of Facebook, in particular, has fueled the market for 'social gaming', creating huge opportunities. Most of these opportunities have, up until now, been seized in large part by upstarts like Zynga, which may be one of the fastest-growing companies ever.
But as social gaming matures, the old guard of gaming may find some golden opportunities of its own.