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Comment by maukdaddy | Hacker News Reader

I wouldn't touch this IPO for one major reason - reliance on FB. In fact, the first risk that Zynga lists in the filing docs:

"If we are unable to maintain a good relationship with Facebook, our business will suffer,” according to the filing. “Facebook is the primary distribution, marketing, promotion and payment platform for our games."

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I would. A friend who works at Zynga showed me around a week ago. It looked like Wall St. meets Silicon Valley. Real-time metrics scrolled across flat screens. And huge teams of engineers packed into single rooms plotted different ways to bilk housewives. It was the first software company I'd ever seen where money was the metric. They have a quarterly bonus schedule and everyone was aware of how much money they've made for the company. If it weren't for the giant cardboard cartoons hanging from the ceiling, the dyed hair and the dogs, it would be indistinguishable from my sister's high yield bond desk at Morgan Stanley.

That beast is hungry. I wouldn't bet against it.

Sorry but that sounds like an absolutely awful place to work. :(

I agree. But the energy was undeniable.

That is nice and all, but it isn't argument against his fear.

If they're great at making money, they're great at making money, and they'll do a good job of overcoming roadblocks, especially those they see coming

Betting _for_ this is like betting against humanity!

could the focus on bottom-line have anything to do with the CEO's top-tier MBA? after all, The Wall Street Way is what they teach MBAs, right?

amazing that the mere mention of "mba" on here with anything other than a negative implication results in down votes...

I agree in principle on the risk, but compared to the GroupOn S-1 it looks like the proverbial dogshit-into-gold product [1].

So the interesting thing is if they can plug into Google+ and do other things to keep usage up they will continue to print money. That is not as disruptive as what other folks are asking you to believe they might have to do to survive.

[1] http://techcrunch.com/2010/10/05/stupid-questions-vcs-ask/

But they have been moving away from their complete reliance on Facebook. It will always be a (major) distribution channel, but they've moved onto iPhone/Android apps too, and I'm sure they're planning on diversifying further.

Yes, but the majority of the 1bn+ valuation rests on FB. That's exactly why it is listed first in the risks section.

They're RAISING $1bn, not a 1bn valuation. More like 15-20bn val.

They're raising $1B .. their valuation is going to be in $15B - $20B range

It very much looks like they are already integrated with Google+ so I'm not sure how reliant they will be long term.

Facebook is just a client. Users, content, and data are all portable. If a user can access his or her Farmville world in 1 of 5 places, I don't think it's such a big deal that 1 of those places goes away, which itself is unlikely for now.

No they're not. If they were, Zynga would have created their own portal. They did launch farmville.com for farmville. They did not launch cityville.com for cityville. That, imho, means they concede they can't make it on their own.

Here's the point of view of a former facebooker about zynga+facebook: http://www.quora.com/Will-Zynga-leave-Facebook

Mm I think you misunderstood my comment. I said Facebook is just a client, to which you say they're not, to which you contradicted yourself by saying that they launched farmville.com for farmville. Let me clarify. By client, I mean the technical term for client, as in the Facebook canvas is just a play client for the Farmville game. They built another play client on their home portal to support Farmville. They built yet another play client app on iOS that supports Farmville. Users/content/data are all portable between each client. If Facebook is gone, Zynga has other places to go. Yes, they may lose virality, marketing, user base, and all that, but their accounts/content/data are not gone, and users have many places to still play Zynga games should Facebook go away. Your article just tells me Zynga won't leave Facebook. I know that. I'm just saying they're not necessarily dead if Facebook is dead and touching their stock isn't such a silly thing to do.

I don't think the concern is that FB will die, but that FB is in control of the platform.

Outside of any agreement Zynga and FB have, if FB takes an action that hurts Zynga (for example, hiding all Zynga games), there's little recourse for them. Technically, you can still play farmville on farmville.com, but many, many people play farmville by searching for "facebook" in their address bar.

Yes, that is technically correct. Technically, because in practice zynga is dead without facebook: http://arstechnica.com/gaming/news/2011/07/zyngas-ipo-filing...

Let me explain a bit more: no other social network has the combination of virality (some call it spam), reach and suitable audience (non-geeks, and non-teens) that facebook offers. With the current roster of games, zynga can only be successful on facebook. Sure, if facebook shuts down their channels, zynga will move to orkut, or hi5 or some chinese social network. BUT, over there zynga will make 1/10 of the revenues, basically because they are popular in non-lucrative markets. OTOH, Zynga has signed an agreement with facebook, in which, i presume facebook has agreed not to cut off the viral channels for a number of years.

The relationship benefits both parties though, if Zynga wasn't on the Facebook platform Facebook's numbers would look a lot worse. Sure Zynga relies on Facebook more than the other way around but I see it as unlikely that Facebook would ever cut them off.

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