Zynga valued at $10 billion, seeking IPO in 2012

The concept is simple: Users click to build houses, cows, and turnips, wait a few hours, and then click again for the same thing. According to the New York Times this formula has led Zynga, the creator of games like FarmVille, Mafia Wars, and CityVille, to be valued at nearly ten billion dollars. While many will debate the merits of these “social games,” it is clear that users are addicted to them. Zynga owns the top two most popular games on Facebook (CityVille and FarmVille) and has over 275 million users playing their suite of games on a monthly basis.

Investors see the link to Facebook as a potential issue, so the company has been signing deals with other social networks and has added their games to mobile devices in order to diversify their product offering. Zynga is also working on creating its own game site, called Zynga Live, and expects to launch it sometime in the middle of 2011.

It appears that technology companies are back in favor with investors. Zynga is currently working to secure $500M in financing, while Groupon recently received $950M, and Twitter secured $200M. Is this the dot-com bubble all over again, or are these companies fundamentally sound and ready to lead the next wave of tech giants?

Image Courtesy of TheNextWeb.com

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11 Comments

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Dirty Banksters and greedy analyst, doing what they always trying to do that is hype up a rising company, hoping to get other investors to buy into there b.s and when the company starts to fall, the insider crooks will be the only ones who will be able to pull out in time and make a killing off the suckers who bought into the hype.

I'd be concerned if my investment company was valuing Zynga that high. I'd actually go and get a second and third opinion about my entire portfolio.

Seems a little inflated to be honest. And I agree with everyone, Zygna is in a VERY risky position. I'm very excited about the prospects of having Unity 3D running in Facebook. Such potential, and a really great platform. There are already a couple of Unity 3D Games up on there.

One thing I think Facebook should do, is to show new games, and high rated games, so that the newer games have a chance of being discovered, to offer variety, and more competitive social games market.

that is such bs.. its worth 33% of facebook itself.. facebook is a way of life to most people where as zynga is just a game.

Headline should read: Zynga substantially overvalued. Move on

You don't have much 'value' when doing one bad thing could mean 90% of your userbase moves on to better things or just plain leaves to prove a point.

Caleo said,
Headline should read: Zynga substantially overvalued. Move on

You don't have much 'value' when doing one bad thing could mean 90% of your userbase moves on to better things or just plain leaves to prove a point.

I agree.. there is no stability in their use base. Look at the app growth and app loss data published by sites that track facebook. The only think i can think of is the company using the money to distance themselves from facebook but by the time they do that, they couldn't compete with steam, xbox/gfw, psn et all.