I've been real busy lately, so posts have been lacking and book reviews are backlogged a bit as well. I did, however, want to post about SVK, a really cool comic book release I got my hands on recently.
Thursday, July 28, 2011
Monday, July 11, 2011
Many people are familiar with Edward R Murrow, mainly in the context of his role in challenging McCarthyism, as portrayed in the film Good Night and Goodluck. Even prior to this film, many are familiar with his role in shaping journalism and in particular with his barn-burner speech that I referenced here.
Tuesday, July 5, 2011
Do the Work
Friday, July 1, 2011
- 600M revenue in 2010, almost 4X 2009. $235M revenue Q1 this year alone.
- Profits growing, with revenue (Q1-Q1: 135%), but...
- R&D up sharply (160%)
- marketing costs up (130%)
- but on the plus side, Cost of Revenue (mostly operating costs) up 110%, suggesting they are getting efficient, or benefits of scale, or both
So, I thought I'd read through some of the fine print. I think the S1 doesn't address three important areas:
- Allocation of R&D costs: Details on R&D are sparse, and the statement just cites increases in headcount, etc. What it doesn't say is whether that's because of a broadening portfolio of games (that would spread risk) or whether individual game title budgets are growing, which would suggest an increase in risk, as each title becomes a bigger gamble.
- Risks posed by entry of EA and other incumbents: As the major publishers awaken to social games, this could have a three-sided effect on Zynga: (i) R&D costs go up to compete on product quality, (ii) possible loss of MSS as the publishers bring major titles to market, and (iii) user acquisition costs go up as the competition drives CPMs on FB's ad network up.
- Terms of Facebook credits agreement. To Zynga's credit, they DO call out the move to the Facebook credits system that took place last year, where they went from giving up 2-10% of revenue for payment processing to giving up 30%. However, they didn't just move to Facebook's credit system. They did so after a bit of a fight, and they signed a five year agreement. What are the terms? I'd like to know, for example...
- Do they get preferential ad pricing and/or placement as a result?
- Although signed in July 2010, the S1 states the migration was only completed April 2011, so how much of the revenue from 2010 and 1Q11 was earned at 95 points on the dollar vs 70 points?