ORIENTATION for new employees of Zynga, the fast-growing maker of Facebook
games like FarmVille
and Mafia Wars
, can be a heady affair given the company’s outsize ambitions — all of which are embodied in Mark Pincus, Zynga’s 44-year-old founder.
In a pep talk this month, Mr. Pincus told his company’s newcomers that he had set out to build an enduring Internet icon, one that was synonymous with fun. </p>
“I thought, it’s 2007, and this can’t be all that the Internet is meant to be,” he said. There has to be more than “a garage sale, a bookstore, a search engine and a portal,” he added in a good-natured putdown of the Web giants eBay, Amazon, Google and Yahoo.
And lest there be any doubt which of those giants Zynga aims to match, Mr. Pincus said the opportunity to build an online entertainment empire was “like search before Google came along.”
So far, he seems on track. The Zynga Game Network, as the company is officially called, is the hottest start-up to emerge from Silicon Valley since Twitter and, before that, Facebook. Unlike Twitter, which has meager revenue, Zynga is on a path to pocket as much as $500 million in revenue this year, according to the Inside Network, which tracks Facebook apps.
While Facebook needed four and a half years to reach 100 million users, Zynga crossed that mark after just two and a half years.
Zynga’s empire is made up of cartoonish online games that even Mr. Pincus acknowledges are goofy. And most striking, given its financial success, is the fact that the games are free to everyone. Zynga makes money, by and large, only when a small fraction of its users pay real money for make-believe “virtual” goods that let them move up in the games or to give their friends gifts.
For instance, in FarmVille, its most popular game, players tend to virtual farms, planting and harvesting crops, and turning little plots of land into ever more sophisticated or idyllic cyberfarms. Good farmers — those who don’t let crops wither — earn virtual currency they can use for things like more seed or farm animals and equipment.
But players can also buy those goods with credit cards, PayPal accounts or Facebook’s new payment system, called Credits. A pink tractor, a FarmVille favorite, costs about $3.50, and fuel to power it is 60 cents. A Breton horse can be had for $4.40, and four chickens for $5.60. The sums are small, but add up quickly when multiplied by millions of users: Zynga says it has been profitable since shortly after its founding.
The company has ballooned to nearly 1,000 employees, up from 375 a year ago, and now has some 400 job openings. And investors, including Google and the Netscape founder Marc Andreessen, have put about $520 million into the company. Though some of the money was used to buy out early investors and employees, it’s still a huge sum in Silicon Valley.
Zynga has been valued at more than $4.5 billion, putting Mr. Pincus, who has retained voting control over the company, on a path to become Silicon Valley’s next billionaire. And, not surprisingly, Zynga has caught the attention of people beyond Silicon Valley.
At a recent gathering of media and technology moguls, Jeffrey Katzenberg, the C.E.O. of DreamWorks Animation, was asked what he would do if he were to start his career over. “I said I would like to be Mark Pincus,” he recalled in an interview. “He has nailed the next killer app, the next compelling thing that’s going to happen” in media.
THERE have been some bumps on Zynga’s road to success. The games are programmed to send updates to players’ Facebook friends when certain actions are completed, like planting or harvesting crops. Six million Facebook users, who grew tired of constant updates about their friends’ games, joined a group called “I don’t care about your farm, or your fish, or your park, or your mafia!!!”
Facebook started restricting the messages, and Zynga’s traffic dropped sharply. For instance, FarmVille had a 26 percent drop, to 61 million monthly users, in July from a peak of about 83 million in March, according to AppData.com.
Mr. Pincus says he expects growth to resume with new games like FrontierVille, which a month after its release on June 9 had 20 million players. And Zynga investors say the drop in traffic had little effect on revenue because many players who dropped out didn’t buy virtual goods.
Even so, some analysts and investors question Zynga’s ability to keep producing hit games in an ever more crowded field. “There are only so many potential customers and only so many categories,” says Rick Heitzmann, a managing director of FirstMark Capital, a venture capital firm that has invested in online game companies, though not in Zynga. “And they are burning through categories quickly,” he adds, noting that Zynga already had games for pets, farms, restaurants and other subjects.
For now, however, it is hard to argue with Zynga’s record.
Its games have 211 million players every month, according to AppData.com. Though that figure counts a user for each type of game he plays, it makes Zynga about four times larger than its nearest rival, Electronic Arts. Playdom is third, with 41 million users.