Playdom Investor Jeremy Liew On Why Disney Stepped Up

Walt Disney Co.’s (DIS) $563 million deal to acquire two-year-old Playdom Inc. was the latest big exit in the hot social-gaming space, which is still relatively new considering Facebook launched its third-party platform only in May 2007. The deal follows Electronic Arts Inc.’s (ERTS) acquisition of Playdom rival Playfish Inc. for at least $300 million in November.

We caught up with Jeremy Liew, a partner with Playdom investor Lightspeed Venture Partners, to talk about the Disney deal and what he sees happening in this game of musical chairs.

Q. Why was there so much interest in Playdom?
A. At the end of the day Zynga is not really viable, so who else is out there at the top of everybody’s list? Playdom. It’s generated a lot of interest from a lot of people. Disney stepped up.

Q. You mean Zynga—the largest player in the space and reported to be valued at upwards of $5 billion–is essentially too large now to be acquired? (Zynga is reported by The Wall Street Journal to be in talks with Google (GOOG) about a partnership for a new Google social network.)
[Zynga's] valuation is pretty high, which makes them a difficult company to acquire for a lot who would be interested. That’s not to say it’s not worth it–it’s an incredible company. It just means there’s not very many who could afford them.

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