5. Facebook
901 million monthly active users (MAUs)
3.2 billion likes & comments, 300 million photos
uploaded per day
125 billion friendships
Mission: To make the world more open and connect
(Facebook, 2012, p. 2-3)
6.
7. Zynga
Leading social game provider with 240 million MAUs in 175
countries
They develop and operate live online game through social
sites and mobile platforms.
All games are free to play
Zynga has achieved great
finical growth by increasing
their revenue from 121.5 million
to 1.14 billion from 2009 to 2011.
(Zynga inc, 2011, p. 2)
(Edwards, 2012)
8.
9. Google
Google is a global technology leader focused on
improving information and connecting people
Google’s goal is to organize information and make it
universally accessible and useful.
In 2011 Google’s annual number of searches was
1,722,071,000,000
Google averages 4,717,000,000 searches per day
(Google Inc, 2012, p. 3)
11. InterActive Corp
Became an incorporated company in 1986
IAC is a leading internet company with 50+ brands in
30 countries
IAC brands are in the search, dating, and media
sectors
In Aug 2012 IAC expanded its company and purchased
about.com from the new York times.
(InterActive Corp, 2012, p. 1)
13. Risk Factors- Zynga
Zynga is mainly dependent on
Facebook, if this relationship
Ends Zynga risks are:
Lack of distribution, marketing and payment
platform (Zynga inc, 2011, p. 7)
Zynga generate the majority of revenue and players
through Facebook, and has no foreseeable alternatives
Zynga is subject to Facebook’s terms and conditions,
which governs how promotions, distribution and
operating games is executed
14. Risk Factors- Zynga con’d
Its a new and rapidly changing industry, which makes
it difficult to evaluate their business and prospects.
(Zynga inc, 2011, p. 8)
It is a new business model and a short operating
history, which makes it difficult to evaluate their
prospects and future financial results and may
increase the risk that we will not be successful.
We rely on a small portion of our total players for
nearly all of our revenue. (Zynga inc., 2011 p. 9)
15. Risk Factors - Facebook
If users do not continue to grow and consistently use
Facebook, their revenue level will be unsustainable
(Facebook, 2012, p. 12)
The majority of Facebook’s revenue is from advertisers
and if advertisers reduce spending on Facebook for
another venture Facebook’s sustainably will be
damaged (Facebook, 2012, p. 13)
An increased use of Facebook on a mobile phones will
decrease revenue due to the unproven ability to
monetize mobile users (Facebook, 2012, p. 14)
16. Risk Factors- IAC
A current risk IAC is experiencing is one stock holder
holding 33.8% of share holder votes which gives him
great influence on how the business is run (InterActive
Corp, 2012, p. 12)
High dependence on key personal and the competitive
market for retaining new skilled employees
IAC depends upon arrangements with Google and any
negative changes in their relationship could affect
their business, financial condition and results of
operations. (InterActive Corp, 2012, p. 14)
17. Risk Factors- IAC Con’d
IAC’s success depends upon the continued growth and
acceptance of online advertising, particularly paid
listings, as an effective alternative to traditional, offline
advertising (InterActive Corp, 2012, p. 13)
IAC depends upon arrangements with third parties to
drive traffic to various websites and convert visitors
into users and customers. (InterActive Corp, 2012, p.
14)
Not being able to adapt quickly in a changing society
(InterActive Corp, 2012, p. 16)
18. Risk Factors - Google
Google faces intense competition and if they do not
innovate and provide new products and services this
will effect revenue and operating results (Google Inc,
2012, p. 10)
Continual investment into new business strategies and
ventures can disrupt on going business (Google Inc,
2012, p. 11)
Google generates the majority of revenue from
advertising any reduction in spending or loss of
advertisers could seriously harm business. (Google Inc,
2012, p. 12)
19. Comparison
Zynga Facebook ICA Google
Net Income -$404,316 $205 (mill) $340.7 (mill) $10,737 (mill)
per year (thous) 2011 (Facebook, (InterActive (Google Inc,
(Zynga inc, 2012, p. 43) Corp, 2012, p. 2012, p. 29)
2011, p. 29) 42)
How profit is launch new Facebook has does not No Cash
utilized games, and not paid anticipate dividends
build the dividends and paying cash have ever been
Zynga brand. rolls profit dividends on paid nor will it
Never paid into the its common for the
dividends and operation of stock or Class foreseeable
have no new and old B common future.
intention in business stock in CEO is paid
the future. (Facebook, the immediate 101 Mill in 2010
(Zynga inc, 2012, p. 37) future. (Google Inc,
2011, p. 24) (InterActive 2012, p. 26)
Corp, 2012, p.
24)
20. Final Statements
It appears that generally Social media publicly traded
companies are all quite innovative and are prospering.
(Zynga’s net profits from 4th quarter 2012) In turn with
this prosperity each corporation has taken their profits
and rolled that back into the company towards
advertising or innovation. With each company having
similar business models they suffer from similar risks.
Social media is not a sustainable industry because the
hope for a consistent growth is based on the
consistency of a changing society. One day everyone
will enjoy and love a site such as MySpace the next day
we are over it.
22. Bibliography
Edwards, J. (2012, 02 15). Zynga Sees Limits To Growth: Sales Flatten As Marketing Costs Double.
Retrieved 02 27, 2012, from Business Insider: http://www.businessinsider.com/zynga-sees-
limits-to-growth-sales-flatten-as-marketing-costs-double-2012-2?op=1
Facebook. (2012, 05 17). The Prospectus. Retrieved 02 27, 2013, from The Wall Street Journal:
http://online.wsj.com/article/SB10001424052702303610504577420330688934066.html
Google Inc. (2012, 12 31). Google Investor Relations. Retrieved 02 26, 2013, from Google:
http://www.sec.gov/Archives/edgar/data/1288776/000119312512222158/d320628ddef14a.htm
InterActive Corp. (2012). IAC/INTERACTIVECORP Form 10-K. Delaware: Edgar online.
Michael, L. (2012, 04 20). Ex-CEO Schmidt gets $101M pay package in new Google job. Retrieved 02
27, 2012, from USA Today: http://usatoday30.usatoday.com/tech/news/story/2012-04-20/eric-
schmidt-google-chairman-pay/54446032/1
Zynga inc. (2011, 12 31). Zynga Inc Form 10-K Annual report. Retrieved 02 27, 2012, from
https://materials.proxyvote.com/Approved/98986T/20120420/AR_126431/
