Gree’s IPO and service outage December 20, 2008Posted by fukumimi in Internet, IPO, IT, Japan.
Gree, Japan’s #2 (and original) SNS had its IPO on Dec 17th, instantly valuing the company at an eye popping JPY110B ($1.2B), with PER of 170 and PBR of 104. This makes Gree worth more than the #1 SNS, Mixi, which is currently valued at $900M, which is trading at a PER of 43.
Gree has approx 7 million “users”, which puts it far behind Mixi which claimed it passed 15million in the summer. The interesting thing about Gree is that it is, for all intents and purposes, a mobile internet SNS, with more than 98% of page views from mobile devices, although it originally started as a PC service. Mixi has a more even split between PC and mobile, 33:67 according to the most recent published figures.
An interesting development occured yesterday, when Gree’s service went down after lunch. Gree was very slow in releasing details of the outage, and there are claims on the internet that Gree investor relations initially claimed the outage was due to “maintenance”.
Sakura Internet, Gree’s datacenter provider, has announced that the problems were due to an electrical fire, but says the problems only affected one of the two redundant power lines. If this were true, it would appear that the users affected (which included not just Gree but also So-net’s blog service and Seesaa, another blog platform provider) have some deployment issues they need to take care of.
More interestingly, on page 17 of their IPO filing, Gree states that its “systems are distributed across multiple datacenters to ensure stable operations”.
It appears that yesterday’s outage was total and complete, as far as its gree.jp SNS service was concerned, which raises the question about its representations in the IPO filing.
Or maybe the reference to systems distributed across multiple datacenters refers to the fact that its corporate website is housed in a different datacenter – gree.co.jp, the corporate website appeared unaffected during the time the gree.jp service was out, not that that is of any use to users who could not access the service……
Perhaps Gree will use the money raised in its IPO to move to a more reliable datacenter and reevaluate its system architecture….