Re: I am not familiar with social network games.
Neither am I... as a player, at least. Most industry observers agree that social, multiplayer games together with mobile/wireless games will enjoy exponential growth in the coming years. Social games editors are merely riding the Facebook wave, that is, the tendency, among mmorpg players, to play with "friends". Mobile games, on the other hand, are dependent on new and more powerful/efficient devices such as Apple's iPad. Below is a short list of mmorpg editors I'm following:
Shanda Games (nasdaq: GAME), 71%-owned by Shanda Interactive;
Changyou, a SOHU subsidiary;
Glu Mobile (Nasdaq: GLUU);
Gravity, a South Korean mmorpg developer, 59%-owned by GungHo Online Entertainment from Japan.
What's appealing with KongZhong is that, unlike most other mmorpg editors, it's a standalone outfit --KongZhong is not the mmorpg subsidiary of some larger entertainment corporation... which makes it (KONG) a likely acquisition target!! KongZhong was created in 2002 by Nick Yang --China's 264th richest man, according to Forbes-- as Communication Over the Air... Not a very "sexy" name. Later (2004), the company was rechristened KongZhong and IPOed on the Nasdaq @$10.10 per share...
Personally, I wouldn't be surprised if KongZhong is acquired by Shanda Games in the coming weeks... The latter is already making ~$750 million revenues annually, whereas KongZhong could make about $200 million in 2010. So, Shanda+Kong = $1 billion in 2011. The clue that, somehow, vindicates my takeover scenario is the departure of KONG cofounder Nick Yang on July 6th 2010. Mr Yang still owns 200 million shares (=5 million ADRs out of a total 35 mil ADRs) and therefore is lawfully entitled to retain his board seat!! So, why did he agree to step down? My hunch is that KongZhong --his baby-- is about to be acquired by a larger competitor...
Stay tuned,
Gus
PS: If you read Chinese (Mandarin), don't hesitate to peruse KongZhong's (rich) website and share your findings with me... I can't read Mandarin!!! |
