Draw Something is everywhere and it's an awesome game. Good move for OMGPOP to cash out. It's a lot of money to throw at a studio that has basically only produced one hit game. Or maybe I am too old to recognize any of their other games ;)
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.
I can't comment on their mobile offerings, but OMGPOP has been running a fairly unique web-based online gaming platform for years. They certainly had a fairly large userbase when I was using the site a couple of years ago, but I guess the facebook and mobile apps were the ones that really brought users.
The web platform has made a number of moves to monetise in recent years, putting more and more features behind payment-based tokens. It'd be interesting to know what proportion of their income comes from the web gaming platform.
