Slide, Rock You, and Zynga

At the risk of wading into hostile territory, I am going to blog again about facebook stats and the rise of our portfolio company Zynga on the leaderboard. Here is the adanomics leaderboard that shows the leading facebook app companies.


I have no idea what UADA is, but the top three facebook app companies are Slide, Rock You, and Zynga. They and Flixster are the only facebook app companies with more than 1mm daily users. There are some other interesting companies on this list. It will be interesting to see how companies like Chainn, esgut, Blake, Watercooler, and 42 Friends develop over the next 6-12 months. Will they build or sell?

The other issue that this list brings up is the head versus the tail of facebook apps.

I realize that they are overlaps and duplicates, but the top 10 facebook apps generate a total duplicated and overlapping reach of over 13mm daily visits. The next 10 facebook apps generate a total duplicated and overlapping reach of about 3mm daily visits. And it does down from there.

It’s a classic power law curve. It’s not surprising at all. But it raises some interesting questions for everyone in the facebook ecosystem.

#VC & Technology

Comments (Archived):

  1. Alvaro

    Fred, how are the evaluations of the applications made? I dont understand how they get to value so much. can you imagine of any way to monetize them?I read you from Spain. I like your blog a lot. I´m learning much by reading you!

    1. fredwilson

      I have to be careful because I am in possession of confidential data fromour portfolio companies. But I can assure you that these companies aremaking a lot of money on these appsFred

      1. Tim

        1) Zynga/Slide/etc get lots of users on their apps2) raises Series A to build a Facebook/MySpace phenom.3) pays Zynga/Slyde a good chunk of their Series A to refer new users.4) uses its explosive growth (see #3) to raise a series B.It’s 1999 redux: just replace Zynga/Slide with AOL/Yahoo/Lycos and with Homestore/ The real question is whether these companies have the staying power of an AOL or if Facebook wakes up and ends up co-opting these opps.

      2. jim

        Is the most important thing for these gaming/ social widget companies traffic per app install baseor the real monetization process per user base conversion.It seemed most of these companies are still trying to figure it out the chasmThey developed sooo fast that some of these company may have non-robust code like zynga that require headache maintenance suckers, suck into it and could destroy the resource to cross the chasm by maintenance and non scalable codeWell who knows right , I think the company with robust code, robust product with killer user experience plus ability to monetize effectively will survive and cross the chasm

  2. Steven Kane

    hey fredportfolio confidentiality understood, but can you shed any light on the valuation/revenue of these apps?at one point you indicated that you didn’t think the primary revenue source was from selling app installs (at $0.50 to $1 per install) to other app developers, but i continue to hear that is still the very dominant bus model as yet.also, i cant help but wonder about duplication. how are “active users” calculated? commons ense would suggest that the overlap between, say zygna’s poker users and blcakjack users is nearly 100% (that is, nearly 100% of blackjack users are also poker users.) but aren’t they being counted twice? (that is, if I play both poker and blackjack, i am counted twice as two “active users” rather than once as one human being)?

    1. fredwilson

      steve, good question on duplication. each app company probably has these numbers from google analytics or some other analytics service. it would be great to figure that out.i don’t know how adanomics comes up with the valuations. maybe someone who does will read your comment and replyfred

      1. jeremystein

        from the adonomics website:What is the Adonomics Valuation? The Adonomics Valuation is an estimate of the net value of your application. It is not just an estimate of potential revenue, although that’s a component. Think of it like the Kelly Blue Book — it’s a reference, not a hard figure. We take into account several factors, including: * Facebook-reported numbers * Standard web metrics such as pageviews, uniques, visitors, etc. * Computed data, such as sudden changes in your growth profile or the age of your application. * Estimated growth of your application and Facebook in general * Optimal monetization strategies across all possible services, including CPM/CPC/CPI advertising, potential sponsorships, and cross-promotion deals. Each of these factors contributes towards your total would be great if they showed the formula.

  3. Roger

    fred, just posted on my question on the valuation of these companies http://www.informationarbit…. if the valuation metrics are indeed driven by installs/users and don’t take into account the ability to monetize the inventory i think these numbers are out of whack.

  4. Zach Allia

    Fred,Adonomics Top list is far from a good measure of “the leaders” in the Facebook application space. You talk like Zynga has held it’s spot for years now; don’t be so confident. The major players, and what I think are the real leaders, are the ones that, among many things, have: organic growth, no need to rely on total user count or DAU as a metric, respect from their users (no reviews don’t count because they are filled with spam), and respect in the developer community.Yes, I will admit Zynga got up there fast, but they had to do the following:1. By buying really junky applications such as: “My Sexy Friends” and “You’re a Hottie”2. By making imitations of other applications that they see succeeding.3. By buying a lot of advertising for all of their applications.I will not go into the slimier things that I have seen Zynga as a company do as I am not here to bash, just to tell you how it is.In regards to #1, those apps have no staying power unless you pump money into advertising, and/or waste space in other applications with link that say “Add this crappy application for some points.” Why not build a reputable company with applications that have real value to the community, and stop worrying about who has the most total users every second?In regards to #2, I can understand copying SGN games as they are a competitor, but copying games by indie developers is wrong if you want any amount of respect from the community. I go out of my way to tell developers what kind of company Zynga is, because that is my duty to the community.In regards to #3, I see ads for Zynga apps popping up everywhere. Although it may not break the bank to use the facebook ad networks, it is money that could be much better spent making games and applications that are creative and worthwhile.Zach AlliaFree Gifts