Inside Social Games: Zynga Introduces Two-Way SMS Feature to Social Game Mafia Wars
Posted by Zynga in Press Articles
Apr 8, 2010 12:27:31 PM
By Eric Eldon | April 6, 2010
Zynga has been experimenting with SMS in its petri dish of a social game, Mafia Wars, since late last year. But at that point it only let players get updates about what was happening in their games. It rolled out two-way SMS today, so players can actually make moves in the game from their phone.
The company likely thinks it can raise the average user’s engagement level by getting them playing through SMS instead of just on Facebook, and get them buying more virtual goods as a result. It may also be trying to find alternative means of regularly contacting users about game-play. Facebook removed third-party notifications at the beginning of March. Our AppData service doesn’t show the perenially popular mafia role-playing game taking any traffic dives since then, but perhaps the loss of notifications is affecting other factors we don’t measure, like average revenue per user.
Mafia Wars has hosted a number of feature tests that we’ve seen eventually rolled out to other games, like its browser toolbar. The fact that this particular app is text-based makes it especially suitable for SMS, although it’s not inconceivable that Zynga will find other uses for the medium, like letting people water their plants in FarmVille.
To start using SMS, go to the Mafia Wars app and click on the “Help” section (although some users may find it featured on the home page). To register, you enter your phone number, then Zynga send you a confirmation code and you enter that code back in the app. From that point on, you text MAFIA (623-42) and include a variety of commands. “FF” is “fight your last opponent again,” for example. You get a free virtual weapon if you sign up, with the promise of “daily bonus rewards” for continuing to play via SMS.
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Los Angeles Times: Tech firms try to outperk one another
Posted by Zynga in Press Articles
Apr 8, 2010 12:24:47 PM
By Jessica Guynn | March 28, 2010
The 700 people lucky enough to work for online social-games maker Zynga Game Network Inc. feast on exotic gourmet grub prepared by professional chefs. They soothe stress with a visit to the company masseuse or reflexologist. And they take a break to get their hair cut. All for free.
If singled out for a quarterly award, an employee can win a weekend spin in a $200,000 Lamborghini or a carload of vested stock.
No perk is too small.
Administrative assistants are even dispatched to engineers' homes to wait for the cable guy so engineers can stay laser-focused on developing the next hit game.
During the downturn, some Silicon Valley firms cut back on the free food and other goodies. That's starting to change.
With the tech-heavy Nasdaq stock index up 90% over the last year, investors are bankrolling new companies looking to invent the next big thing in social networking, mobile phones and other new technologies.
And that's led companies to try to outperk the competition once again.
"The competitive nature of Silicon Valley forces you to get creative," said Farbood Nivi, founder of San Francisco's online learning start-up Grockit.
Other common perks include upgraded health plans, flexible hours, gym
memberships and tuition reimbursement. There's the vast cornucopia of
free snacks (vegan cookies and coconut water) and services (dry
cleaning and leather repair).
Grockit picks up the tab for
employee health insurance and contributes $100 a month to each worker's
health savings account. During a workday, employees can gather at a
long table at Grockit's headquarters -- a hip Mission District loft --
and enjoy free organic meals.
The perks being offered often reflect the character of the business.
Airbnb
Inc., for example, offers free travel. The San Francisco firm that
helps people rent out rooms to travelers dispatches its employees to
visit hosts around the world. As a result, they can spend up to 5% of
their jobs traveling.
Sometimes, a perk is simply fun.
Social
publishing company Scribd encourages roughhousing. Every evening, the
freewheeling San Francisco headquarters turns into a go-cart track with
employees either "scracing," zooming around the office in a figure
eight, or playing "go-cart tag," earning points for bumping another
player from behind.
The layout of the office, with its six
pairs of eight-sided concrete columns running down the middle, also
proved ideal for a zip line.
"Pretty soon we are getting a ball
pit for the end of the zipline, and I'm still thinking about where we
can put a hot tub," said Chief Executive Trip Adler.
At Asana,
an Internet software developer, it's all about creating a workplace
nirvana where employees can focus on their work and on the big picture,
said Justin Rosenstein, who started the outfit with Facebook Inc.
co-founder Dustin Moskovitz.
The San Francisco start-up doles
out $10,000 to recruits to spend as they like on computers and
electronic equipment. They also get catered meals and twice-weekly yoga
lessons.
"Employees should pretty much get whatever will help
them be more productive, since their energy and time are invaluable,
and small expenditures can go a big way in making people happier and
more effective," Rosenstein said.
Paul Saffo, a Stanford University professor who studies the future of
technology, said such perks -- like Wall Street bonuses -- may sound
extravagant but are not.
"Despite the downturn and the number of
people on the street looking for jobs, filling or replacing a
knowledge-worker job at a Silicon Valley company is a complex,
expensive process," he said. "Companies have a very powerful incentive
to do everything they can to make an employee happy."
Motivational experts like "Drive" author Daniel Pink applaud Silicon Valley for its counterculture mind-set.
Unlike
elsewhere in corporate America, where top executives vie for corner
offices and country club memberships, perks here do not come with rank.
But they do come with a sense of freedom and purpose, something
employees crave more than free food and massages, Pink said.
He
points to the motivational success of Google Inc.'s encouraging
engineers to spend 20% of their time on side projects of their
choosing, some of which became major initiatives.
"The
rallying cry at many companies is 'Let's raise earnings per share 2
cents a quarter.' That's not going to get someone to jump out of bed in
the morning and race to do something extraordinary," Pink said.
Early
pioneers, such as Hewlett-Packard Co., gave gifts to newlyweds and new
parents, hosted annual picnics and showered employees with free snacks
and coffee.
The "HP Way," based on the belief that happier
workers are more productive and loyal, inspired generations of Silicon
Valley companies to come up with new carrots, such as stock options
that could turn into riches.
In 1999, Google revolutionized campus dining by hiring its own chef.
It
eventually opened 16 cafes that serve up free, mouthwatering meals to
the growing workforce at its Mountain View headquarters, which also
boasts swimming pools and volleyball courts.
It offers other enticements such as free on-site medical care, laundry
facilities and fitness centers as well as subsidized personal trainers
and massages. Company shuttle buses equipped with wireless Internet
ferry more than 1,400 employees to and from Google offices daily.
Not
to be outdone, Facebook lured away one of Google's top chefs, Josef
Desimone, who prepares 14,000 meals a week for his new employer. It
also lifted Google's idea of shuttling employees through the Bay Area's
congested corridors.
As its workforce exploded to 1,200,
Facebook added family-friendly policies. Raquel DiSabatino, who manages
consumer marketing programs for Facebook, recently returned from four
months of paid maternity leave. Through a program called Baby Cash,
Facebook gave her $4,000 to help pay for baby gear.
Zynga may
have some of the more generous perks, said Amitt Mahajan, a lead
developer on the company's popular game FarmVille who won a $5,000
quarterly award and took his girlfriend to Spain.
His colleague
Ginger Larsen, an associate on another popular Zynga game, Mafia Wars,
is hooked on the company-paid once-a-week acupuncture treatments, which
appeared to cure stomachaches that had bothered her all her life.
Even
with all the perks, Zynga's Chief People Officer Colleen McCreary says,
the company is trying to work to prevent a potential fallout: a culture
of entitlement.
"We do have a workforce for whom this is their
first job out of school," McCreary said. "I worry if they ever wanted
to go work somewhere else. What a shock to the system that would be."
helping zynga connect the world through games...
By Brett Molina | Mar 25, 2010
-- Add Midway arcade game Spy Hunter to the list of classic video games that will likely receive the big screen treatment. Variety reports Warner Bros., who owns most of defunct publisher Midway's assets, is working on a movie adaptation with Sherlock Holmes producer Dan Lin. Brace yourselves for a movie with plenty of oil slicks and smokescreens. Film projects are reportedly in the works for other arcade classics Asteroids, Missile Command and Pac-Man.
-- Social games developer Zynga is rolling out gift cards for its library of titles that consumers can use to purchase in-game items. The cards for YoVille, Mafia Wars and the highly popular FarmVille are available for either $10 or $25. Retailers such as 7-Eleven, Best Buy, Gamestop and Target will carry the cards. Players can redeem cash through each game's official website or via Facebook.
-- Finally, actor Robert Culp died Wednesday after a fall near his Hollywood home. While most readers will likely remember him for his role in the 1960s television series I Spy, video game players will know Culp best as the voice of Dr. Wallace Breen in PC classic Half-Life 2.
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Wall Street Journal: Sizing up Promising Young Firms
Posted by Zynga in Press Articles
Apr 8, 2010 12:18:28 PM
Venture capitalists, the investors who supply start-up money to promising young companies, are always looking for the next big thing—whether it's a hot new gadget, game or medical breakthrough.
Amid a shakeout caused by poor returns, VCs are having a tough time these days, but many of them are still nurturing inventors and entrepreneurs.
There are some 10,000 privately held, venture-backed companies in the U.S. To pick the 50 of them with the greatest potential, a team from research firm VentureSource, a unit of Wall Street Journal owner News Corp., applied a strict set of standards.
To be eligible for the ranking, companies had to have raised an equity round of financing in the past three years and—because the goal was to identify lesser-known contenders—they had to be valued at less than $1 billion. That knocked big private companies such as Facebook and Twitter off the list.
VentureSource then analyzed the remaining 5,194 candidates according to four criteria: the track records of the company's founders and management, and of the investors on its board; the amount of capital raised in the past three years; and the percentage change in the company's valuation in the 12 months ended Nov. 30. Beyond the numbers, reporters and editors who cover the venture-capital industry for The Wall Street Journal and Dow Jones Newswires also weighed in, providing their perspective and expertise.
The result is a diverse group of companies whose ambitions range from treating diseases to changing the way consumers shop for luxury goods.
Topping the list is Pacific Biosciences, of Menlo Park., Calif., which makes DNA-sequencing instruments. It is one of 12 health-care companies on the list in an otherwise tech-heavy field. The company, which ranked No. 1 partly because it raised more than $260 million from prominent backers, including venture firm Kleiner Perkins Caufield & Byers, Intel Corp.'s Intel Capital arm and private-equity firm Blackstone Group LP, aims to be a player in the burgeoning field of personalized medicine. It plans an initial public offering in the near future, according to co-founder Stephen Turner.
No. 2 is Fusion-io Inc., which, like many of the 18 information-technology companies in the rankings, hopes to help businesses cope with an overabundance of data. (No. 6 Azul Systems, No. 20 Silver Peak Systems and No. 34 Schooner Information Technology, among others, also aim to help corporate datacenters work faster, better and cheaper.) Fusion-io, a Salt Lake City maker of flash-memory drives for servers, scored highs marks for its chief scientist, Apple co-founder Steve Wozniak, and a big-name investor, computer maker Dell Inc.
Rounding out the top three was HomeAway, of Austin, Texas, one of 12 consumer goods and services companies on the list. The fast-growing online service offers vacation-property rentals around the globe. It posted 2009 revenue of $120 million, up 40% from a year earlier.
Other high-scoring consumer-oriented companies include No. 4 Zynga Inc., which makes the popular social-network games Farmville and CafeWorld; No. 22 HuffingtonPost.com, the news and opinion site co-founded by Arianna Huffington that says its has a valuation of $100 million; and No. 23, Pandora Media, the Internet radio operator founded by Tim Westergren, who says he "maxed out" 11 credit cards after running out of seed money and pitched Pandora 348 times before securing more capital in 2004.
Indeed, the ability to raise big sums of money at an otherwise lean time for venture capital sets many of these companies apart.
To be sure, many companies made the cut because of strong ties to Silicon Valley, and are deemed likely to succeed chiefly because influential firms, such as Accel Partners, New Enterprise Associates and Sequoia Capital, have backed them. Any number of companies that could be the stars of tomorrow may not have made the ranking because of difficulties in tallying their lesser-known backers' track record.
Some top-ranked companies may find it difficult to deliver attractive returns to their venture backers. To do so, they would have to command high valuations when they ultimately are acquired or go public.
Adding to the pressure, many on the list, such as No. 41 Force10 Networks, are more than 10 years old, and their investors may lose patience. Force10, a networking-products maker, merged last year with another well-funded, decade-old company, Turin Networks Inc., and last week filed for an initial public offering. Its fate will hinge on how eager the public is to buy its shares.
Some companies in the ranking have relieved themselves of such concerns, at least for now. HomeAway, Zynga and No. 13 Glam Media have raised enough new money to give early investors and employees the chance to sell some of their stock. In February, Glam announced a new $50 million funding round that includes a $15 million buyback program for early investors. That will let the executive team focus on building the female-oriented media network.
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VentureBeat: Looking for farmers: Zynga opens office in India
Posted by Zynga in Press Articles
Apr 8, 2010 12:13:57 PM
February 16, 2010 | Dean Takahashi
Zynga is announcing today that it will open an office in India to develop social games.
The office in Bangalore will be the company’s first outside of the U.S. The office is expected to hire about 100 people, mostly for game development and infrastructure to support Zynga’s games, which include the popular FarmVille.
Zynga has about 800 people now in offices in San Francisco, Baltimore, and Los Angeles. The new office says a lot about India’s growing importance in the world economy, as well as games.
Zynga has more than 239 million monthly active users for its Facebook games, making it the No. 1 Facebook developer and the biggest company in the social game industry. The company lets people play its games for free and makes money through the sale of virtual goods. That business model is expected to generate something like $400 million in revenues for Zynga in 2010, according to industry sources.
Meanwhile, India’s game market is rapidly expanding. India has about 81 million Internet users. It is expected to become the third largest online market behind China and the U.S. by 2013. Zynga hopes the opening of the local office will help spur demand for Zynga games in the Indian market.
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By Nathan Becker | February 11, 2010, 11:31 AM ET
Zynga Game Network has agreed to acquire Facebook games creator Serious Business, adding to its expansive portfolio of games available on social networks and mobile devices.
Financial terms of the deal weren’t disclosed. Zynga, which was founded in 2007, is the maker of such popular social games as FarmVille and Mafia Wars. It also develops games for Apple’s iPhone.
“We’re very excited to gain an experienced team that is committed to building social games,” said Vish Makhijani, chief operating officer at Zynga. “We are impressed with Serious Business’ entrepreneurial attitude speed, and innovation in developing social games and welcome them to our team.”
Serious Business’ flagship game, titled Friends for Sale, is played by more than six million people every month, according to the company’s Web site. Serious Business is backed by venture-capital firm Lightspeed Venture Partners.
Both Serious Business and Zynga are based in San Francisco, and Serious Business employees will now join Zynga at its headquarters.
In December, Russian investment firm Digital Sky Technologies — which poured money into Facebook earlier in the year — bought a $180 million stake in closely held Zynga.
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GigaOm: Farmville Users Send 500M Valentines in 48 Hours
Posted by Zynga in Press Articles
Apr 8, 2010 12:06:22 PM
If you had any doubts as to the kind of influence wielded by Farmville, the animated Flash game that has become popular on Facebook, here’s a statistic that should erase them: In just two days since the launch of a new valentine gift feature on Monday, Farmville users have sent about half a billion virtual presents to other users — and it isn’t even Valentine’s Day yet. According to Zynga, the creator of Farmville, the game has more than 72 million registered users.
All Facebook reported early Wednesday that Farmville users, who plant crops and raise animals on their virtual plots of land, had sent 220 million virtual gifts to each other in 18 hours (Valentine gifts are free, although other things within Farmville can cost money). A check with a press spokesman from Zynga found that in the 48 hours since the launch at 6 a.m. PT Monday morning, more than 475 million had been sent. “We sent about 255 million yesterday and about 220 million the day before, for a total of about 475 million,” Lisa Chan said in an email.
Even though the valentines themselves didn’t cost money, the size and power of these kinds of virtual economies (Farmville players helped to raise $1 million for Haitian relief efforts) have led many to wonder what they can tell us about online spending in other ways. Journalist Chris O’Brien, for example, wrote a post recently at the PBS Media Shift blog asking “What Can Virtual Goods Teach Us About Paying For News?” and noting that virtual goods are expected to be a $1.6 billion market this year.
So what can Farmville teach us about the digital economy? If nothing else, it shows that making it easy for people to give each other presents can get you to some rather large numbers in a hurry.
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New York Times: Corner Office Are you a C.E.O. of Something?
Posted by Zynga in Press Articles
Apr 8, 2010 11:58:15 AM
Published: January 30, 2010
This interview with Mark Pincus, founder and chief executive of Zynga, a provider of online social games, was conducted and condensed by Adam Bryant.
Q. What are the most important leadership lessons you’ve learned?
A. If I was going all the way back, it would be playing on my school’s soccer team, because we were on the same team together, most of us for eight or nine years, and we were at a really little school in Chicago that had no chance of really fielding any great athletes. But we ended up doing really well as a team, and we made it to the state quarterfinals, and it was all because of teamwork.
And the one thing I learned from that was that I actually could tell what someone would be like in business, based on how they played on the soccer field.
So even today when I play in Sunday-morning soccer games, I can literally spot the people who’d probably be good managers and good people to hire.
Q. Based on what?
A. One is reliability, the sense that they’re not going to let the team down, that they’re going to hold up their end of the bargain. And in soccer, especially if you play seven on seven, it’s more about whether you have seven guys or women who can pull their own weight rather than whether you have any stars.
So I’d rather be on a team that has no bad people than a team with stars. There are certain people who you just know are not going to make a mistake, even if the other guy’s faster than them, or whatever. They’re just reliable.
And are you a playmaker? There are people who don’t want to screw up, and so they just pass the ball right away. Then there are the ones who have this kind of intelligence, and they can make these great plays. These people seem to have high emotional intelligence. It’s not that they’re a star player, but they have decent skills, and they will get you the ball and then be where you’d expect to put it back to them. It’s like their head is really in the game.
Q. How has your leadership style evolved, given your experience running several companies?
A. You can manage 50 people through the strength of your personality and lack of sleep. You can touch them all in a week and make sure they’re all pointed in the right direction. By 150, it’s clear that that’s not going to scale, and you’ve got to find some way to keep everybody going in productive directions when you’re not in the room.
And that, to me, is a huge amount of what it means to manage. But I went to Harvard Business School and that never occurred to me the whole time. And I’d started a bunch of companies and never gotten to that understanding, even with one company I had that I did take up to over 200 people.
Q. So give me an example of what you did to change that.
A. I’d turn people into C.E.O.’s. One thing I did at my second company was to put white sticky sheets on the wall, and I put everyone’s name on one of the sheets, and I said, “By the end of the week, everybody needs to write what you’re C.E.O. of, and it needs to be something really meaningful.” And that way, everyone knows who’s C.E.O. of what and they know whom to ask instead of me. And it was really effective. People liked it. And there was nowhere to hide.
Q. So who were some of your new C.E.O.’s?
A. We had this really motivated, smart receptionist. She was young. We kept outgrowing our phone systems, and she kept coming back and saying, “Mark, we’ve got to buy a whole new phone system.” And I said: “I don’t want to hear about it. Just buy it. Go figure it out.” She spent a week or two meeting every vendor and figuring it out. She was so motivated by that.
I think that was a big lesson for me because what I realized was that if you give people really big jobs to the point that they’re scared, they have way more fun and they improve their game much faster. She ended up running our whole office.
Q. Did everybody want to be C.E.O. of something?
A. There are people who want the comfort and structure of a job where they’re given tasks and told what to do. I think it’s actually a minority of people. The majority of people don’t want that, but I’d say that the companies I’ve built are full of people with something to prove.
Q. But don’t most people have something to prove?
A. Some more than others. I keep my eye out for someone who has achieved a lot, so they’ve been a great athlete or on a great team, but then something didn’t go quite right, and they’re still very hungry and want to be C.E.O. of something. I like to bet on people, especially those who have taken risks and failed in some way, because they have more real-world experience. And they’re humble.
I also like to hire people into one position below where they ought to be, because only a certain kind of person will do that — somebody who is pretty humble and somebody who’s very confident.
This is another thing I really, really value: being a true meritocracy. The only way people will have the trust to give their all to their job is if they feel like their contribution is recognized and valued. And if they see somebody else higher above them just because of a good résumé, or they see somebody else promoted who they don’t think deserves it, you’re done.
My approach is that you have to earn the respect of people you work with. And so, if you come in and you start bossing people around and they don’t want to work with you, they won’t. In our company, if you want to switch teams, you can. In hiring, it’s also a sign of a great manager when you tell me that there’s all these people who want to come with you, or when you join us and we find other people are all sending us their résumés because you’re here.
Q. What else is unusual about how you run the company?
A. John Doerr [the venture capitalist] sold me on this idea of O.K.R.’s, which stands for objectives and key results. It was developed at Intel and used at Google, and the idea is that the whole company and every group has one objective and three measurable key results, and if you achieve two of the three, you achieve your overall objective, and if you achieve all three, you’ve really killed it.
We put the whole company on that, so everyone knows their O.K.R.’s. And that is a good, simple organizing principle that keeps people focused on the three things that matter — not the 10.
Then I ask everybody to write down on Sunday night or Monday morning what are your three priorities for the week, and then on Friday see how you did against them. It’s the only way people can stay focused and not burn out. And if I look at your road map and you have 10 priorities for you and your team, you probably don’t know which of the three matter, and probably none of the 10 are right.
I can look at everyone’s piece of paper, and their road map shows every item you were going to do and your predicted results and actual results, and then the results are in red if you missed them, yellow if they’re close and green if you passed them. I think road maps are a great principle just for managing your life. It keeps everybody focused, and it lets me know what trains are on or off the tracks.
Q. What has surprised you most after you really started focusing on leadership and management?
A. The most general thing is it surprised me how rewarding it is to focus on management and being a C.E.O. And how much you get back from places where you weren’t expecting it. I’m surprised how much people at the far reaches of the organization are touched by it, and that touches me. I’ve been surprised how much they can achieve without me being involved. That’s been awesome.
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Jan 28th 2010 | From The Economist print edition
“HEY first peaches of the season are here. Come and get your peach pie @10am.” Simple tweets like that have helped Mission Pie, a small shop in San Francisco, drum up interest in its mouth-watering array of sweet and savoury pies. As well as twittering about its wares, the store also alerts customers to poetry readings and other events it organises. Krystin Rubin, a co-owner of Mission Pie, says the business had just 150 or so followers for a while after one of its bakers started sending out tweets almost a year ago. Then that number suddenly shot up to over 1,000. Over the past few months business has been very brisk and Ms Rubin reckons Twitter deserves part of the credit. “It has a sort of street credibility that’s not there with traditional media,” she says.
Other companies have discovered the same thing. Kogi BBQ, which has several trucks serving Korean food in Los Angeles, now has over 52,000 followers on Twitter and uses the service to tell customers where they can find its vans each day. Sprinkles, a cupcake bakery with stores all over America and nearly 94,000 fans of its Facebook page, posts a password to that page each day which can be redeemed for a free cake by a certain number of visitors to its shops. Such offers can attract a lot of attention. A survey of 1,000 heavy users of social networks and other digital media conducted in August 2009 by Razorfish, an advertising agency, found that 44% of those following brands on Twitter said they did so because of the exclusive deals the firms offered to users.
As Kogi BBQ and Sprinkles show, social networks are arguably having an even greater impact on small businesses than on the big league. By giving entrepreneurs free access to their audience, services such as Twitter and Facebook are putting corporate tiddlers on a par with behemoths such as Starbucks and Dell when it comes to broadcasting messages to a mass market. They have also created what Steve Hasker of Nielsen calls “the world’s biggest, fastest and most dynamic focus groups”, which can be a boon to entrepreneurs without fat research budgets.
Some small businesses are already using social networks to generate new ideas. After spending time on Twitter, employees at Cordarounds.com, a small American clothing company, noticed that many folk twittering in their area were using bicycles to get to work. So the firm produced a new line of trousers, dubbed “bike-to-work pants”, with built-in reflective materials that make wearers more visible to traffic while cycling at night. And of course it used tweets to get the word out about its new creations.
“Follow me on Twitter” signs are appearing on the doors and windows of small businesses in other countries too. A survey last year by O2, a mobile-phone operator, found that some 17% of Britain’s small businesses were using Twitter. Many of the firms that responded said they were doing this to attract new customers. Some reckoned they had been able to save up to £5,000 (over $8,000) a year by cutting out other forms of marketing in favour of the networking service.
The connections made possible by social networks are helping to create new businesses as well as promote existing ones. When Henk van Ess, a Dutch technology consultant, posted a complaint about the short lifespan of his iPhone’s battery on LinkedIn a couple of years ago, one respondent suggested that he contact China BAK Battery, which produces a small, plug-in battery for the iPhone. Impressed with the product, Mr Van Ess told members of his online network about it and was soon handling orders for them. After a while he formed his own company, 3GJUICE, to produce a plug-in unit for the iPhone that incorporates the Chinese firm’s battery.Mr Van Ess’s firm is tiny, but social networks such as Facebook and MySpace have also served as launching pads for much bigger outfits. Among the largest of these are companies such as Zynga, Playfish and Playdom, whose popular online games run on the big networks’ platforms. Some of these games, such as Zynga’s “FarmVille”, have attracted millions of players and produced mountains of money for their creators. Zynga says it has been profitable almost since it opened in 2007, and last month the business attracted an investment of $180m from a bunch of prominent financiers convinced of its potential. Many of the social-games companies are on a hiring binge, creating hundreds of new jobs at a time when the economy around them is in the doldrums. Their experience provides an insight into how social networks can help propel small businesses to much bigger things.
Like most games, the ones produced by Zynga and its peers appeal to people’s natural competitive instincts. Leader boards and a host of other features allow players to show off their status within a game to their friends. But the games also encourage lots of co-operation among players, who can build rapport by, say, sending virtual gifts to each other or handing virtual currency to new players when they join a game. “The best virtual goods have real currency,” says Mark Pincus, Zynga’s boss. He reckons that the games have become so popular because they combine fun with the various ways to strengthen relationships that Facebook and other networks have brought online.
Social games have also become extraordinarily popular because they cleverly exploit those relationships. Once someone has signed up for, say, “Mafia Wars”, another Zynga invention, they are urged to invite their friends to join too. And players’ gruesome successes in such games are regularly posted to their personal page on Facebook, which can be seen by all of their friends. Thanks to such wheezes, online games benefit from a powerful network effect. “Café World”, which gives users the opportunity to run their own virtual restaurant, launched on Facebook at the end of September and within a week had attracted a mind-boggling 10m players.This astonishing growth has been helped by the fact that social games are free to play. The companies make their money by selling digital goods in the games, by carrying advertising and by getting players to sign up for marketing promotions. Surprising though this may seem to some, virtual goods such as swords, tractors and even digital boyfriends are much in demand. After users of its “Sorority Life” game complained in an online forum that the game lacked virtual men they could date, Playdom quickly introduced some last November. Over 10m of the boyfriends were promptly snapped up, with a few players buying as many as 500 each. Some paid for their digital darlings with virtual credits won in the game, but others stumped up over $5 a time for their beaux.
The rise of the social-gaming firms has not been without controversy. Last year Zynga came under fire from TechCrunch, a Silicon Valley blog, for allowing misleading marketing offers to run on its site. The firm subsequently removed them. But such hiccups have not dented interest in social gaming: last November Playfish was snapped up by Electronic Arts, a big video-game publisher that thinks the business is going to be huge. It may well be right. ThinkEquity, an investment bank, reckons that revenues in America from social games could hit $2.2 billion by 2012, a big leap from last year’s $375m.
Admittedly this is an extreme example of the benefits social networks can bring to small businesses. Rewards for outfits such as Mission Pie will be far more modest. But if they were added up across an entire economy, they could have a significant effect on growth. What a pity, then, that many small firms are reluctant to take the plunge into the social-networking world. A survey of 500 small businesses in America conducted by Citibank last October found that most of them had not used online networks at all because they thought they would be a waste of time.
helping zynga connect the world through games...
Business Insider: Zynga Raises $1.5 Million for Haiti in Five Days
Posted by Zynga in Press Articles
Apr 8, 2010 11:49:02 AM
By Nicholas Carlson | Jan. 20, 2010, 12:23 AM
FarmVille, FishVille, Mafia Wars and Zynga Poker users from 47 countries donated to U.N. World Food Programme (WFP) by buying limited edition virtual goods.
“We are extremely grateful to Zynga for this contribution,” Nancy Roman, WFP director of communications Nancy Roman said in a statement.
“Through their donations, Zynga players are helping us to bring urgently needed food assistance to people who have been plunged into hunger by this devastating earthquake. We started distributing food within 24 hours of the earthquake, and in the coming weeks, we aim to deliver weekly rations to 2 million people.”
Reports say Zynga's revenues surpassed $200 million in 2009, but the company -- still private -- has never disclosed a real figure.
Here's what we do know, however: Zynga, which has 230 million monthly active users, can generate cash fast. Annualized, these limited edition goods alone would put Zynga revenues above $109 million.
helping zynga connect the world through games...