[RichardKim]

So when is Zynga's traffic going to normalize? Most of the guys I know have already stopped playing the game.

I was actually thinking, what about creating the same game except only obscene/explicit/offensive adult drawings & word choices? There should be plenty of immature people wanting to play the game with their immature friends. I would : )

I read the rules on the Apple app stores and it doesn't seem promising to obtain approval. If someone knows how to find a loophole into getting it approved, please let me know!

BTW. I think everyone is valuing Zynga incorrectly. Wall street guys and VC guys alike are looking at Zynga with an incorrect model just like all the street guys built incorrect assumptions in their models for housing before it popped.

People should be valuing the company on a risk-adjusted long-term discounted cash flow basis (similar to an early stage pharmaceutical company) mixed with sensitized accretion/dilution models as these companies have to continuously go on acquisition sprees if they do not organically produce good games... But at one point or another, they're not going to create cool games / there won't be another OMGPOP available to buy OR what they bought cools down faster than what they envisioned; and that "RISK" is not currently priced in today's stock price.

Hot games come and go over time but with very little visibility to know when it'll get cold. So what would happen if I was able to create OMGPOP2 - adult version and somehow it was approved and got crazy popular taking market share from the original game. Then Zynga just wasted a lot of the 200m they just paid for (I heard it only makes 200k a day on ads)... that's a long ways to go to make up that 200m watermark to break even, taking into account fairly strong growth...

GG.

[robryan]

The game is probably still in a period where the buzz around it is causing more growth than users who hav stopped playing. Even when they do, I'm sure you will soon see other Zynga apps cross promoted in the game to keep the audience playing Zynga games. I think also that pushing updates to a large install base can generate some uptick.

[orijing]

If it really made 200k a day on ads, that's 73 million a year. That would be crazy if true and would justify a 200m valuation.

[RichardKim]

True statement. But only if the analysis was that easy... Yes, if that can continue but the 200m valuation is much more complicated than applying a 3x multiple on 73m earnings.

You have to model out and do a churn and fatigue analysis to get to your top-line volume potential over time (meaning, games like this for example, my friends who used to play 3 hours a day now play 30 minutes a week or just stopped playing... this is in a span of 3 weeks of playing!). What goes up can go down. Of course Robryan makes a great point about potential synergies but I would imagine synergies can't be that great. Who plays these games that haven't played angry bird or other zynga games? Only a subset of the population would be incremental new users.

What is the average churn rate per week/month? What is the avg user's playing time per month and trend (trend should go down over time) and one or both of the variables drop by 25-50% more than offsetting any new users added. Then that 2-3 year payback period to break even now turns into 4-5-6 years. So then would this game be still popular at all for that many years? Maybe. I don't know.

What I was pointing out was if somehow some new drawing game like my absurd example becomes more popular over the next 2-4 years then it's got a lot more binary risk embedded in that 200m valuation that most investors are not thinking about or priced in.

Now, I don't know how many people are paying members v. ad members. That may help / not help their case.

Hope that clears up any lack of clarity that I provided in my previous post!