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It is a lot of money in aggregate. But when you break it down, it looks like a pretty good deal. Revenue multiple: Based on the reported figure of $250,000/day = $91.25M/year. At a purchase of $210M, this represents a multiple of 2.2x, far below the price/sales multiple of Zynga and Glu Mobile, two publicly traded companies on the US exchange. Sure, OMGPOP probably won't be hitting $250,000/day for the entire year but even at a 50% discount, you're in the same range as Glu. DAU cost: Assume CPI of $1.50, install/DAU conversion rate of 10%. This equates to a DAU cost of ~$15. It's safe to say that OMGPOP has >10M DAU, which means ZNGA bought the company at <$20/DAU. Additionally, the above CPI and install/DAU conversion rate are quite low. I've been hearing that OMGPOP is seeing 1-day retention rates of 50-75% which is amazingly high. This means that with continued growth and similar retention rates, ZNGA got a pretty good deal in terms of DAU acquisition cost. The main advantage for Zynga is that they can leverage OMGPOP's DAU and cross-promote their existing titles. And with their experience in monetizing titles, it's safe to assume that ARPU will increase. |
$250k/day with $0.99 per user == ~252,000 installs a day. That's almost 92MM installs per year. How many active users does App store have?