Zynga’s initial public offering to rake in $ 1 billion | Search Value Blog: Digital Marketing Insights
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Zynga’s initial public offering to rake in $ 1 billion
Posted By: Sachin Bansal

Zynga- On the way to be Online Gaming Giant!

When Harvard Business School alumnus Mark Pincus, along with co-founders John Doerr, Scott Sale, and Kyle Stewart unleashed a company on browser-based games over the air waves in 2007 little did he know that his brainchild would turn into such a blockbuster. The company, reportedly, posted a net profit of $90 in 2010.

The company that Mark named after his beloved bulldog Zynga, is headquartered in San Francisco, California. It is responsible for developing social networking games like City Ville, Farm Ville, and Zynga Poker.

While these virtual games with their deliciously enticing features and visuals piggy-back ride on popular social networking sites like Facebook and My Space, they also work perfectly well as stand alone software.  On Facebook alone Zynga has over 270 million users.  A single game like City Ville has no less than 20 million monthly players on Facebook.

With its fortunes climbing up all the way ever since it debuted in 2007 Zynga has now filed, what is rumoredly, the largest internet stock offering.  The company, still known as a start up despite having offices in at least four spots on the globe, expects to rake in nothing less than USD 1 billion in its initial share sale. It is the same figure that Zynga used to calculate as its registration fee.

Internet stocks seem to be doing very well lately. In May, for instance, the business allied social networking site LinkedIn’s share price jumped up from USD 45 to USD 122 on the first day of trading on the New York Stock Exchange. In this new financial climate, with investor interest in internet stock burgeoning tremendously, who wouldn’t want to capitalize? And why should Zynga be left behind?

Anyone who has played Farmville or City Ville or any of the cute animated games that Zynga offers on Facebook would know that it costs nothing at all to click and start playing. Then how does this virtual start up make its money? The answer is less complicated than it appears. The majority of the company’s revenues come from a rather minuscular group of users who buy virtual goods to enhance their visibility in these games as well as through ads online. To a lot of investors, this is a smart way of making their presence felt and, thereby, garnering significant business in the long term. When you consider that a game like Farmville alone attracts about 31 players everyday, it makes sound business sense.

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