Zynga Being Valued At Around $7-9 Billion!

Zynga isn't too popular around these parts -most people recognise them as the blue-eyed devils behind Farmville, and the reason why their Facebook feed is plagued with garbage - but investors seem pretty keen. In an attempt to rustle up some capital, they've released new stock, and investor interest values Zynga at around US$7-9 billion.

Last year Zynga garnered roughly $850 million in revenue, and it seems like their ability to expand into other markets, such as iOS, has skyrocketed their value amongst potential buyers, who are apparently knocking on Zynga's door to invest.

According to Larry Alburek, the managing director of investment firm EB Exchange Funds, Zynga is second only to Facebook when it comes to interest from buyers.

"Guys call me up and tell me just go out and get it," he said. "The number of requests and activity is crazy compared to last year."

Eric Schmidt, however, the CEO of Google, believes the high valuation of companies such as Facebook, Twitter and Zynga is a bubble destined to pop.

"There are clear signs of a bubble," claimed Schmidt, "but valuations are what they are. People believe that these companies will achieve huge sales in the future."

It's an interesting one - by releasing a limited amount of stock, while demand is high, Zynga are clearly at a risk of overvaluing themselves. But time will tell - the company is clearly making a lot of money via their business model, and investors clearly want a piece of that social gaming pie.

Zynga's Talks With Investors Value Gaming Concern at Over $7 Billion [Wall Street Journal]


Comments

    Yeah this will die down, but not for a while.

    *facepalm*

    are they worth mostly due to the amount of personal information they have on their customers?

    http://27.media.tumblr.com/tumblr_l6fsfbTkbu1qa7cgco1_500.jpg

    I secretly can't wait for that bubble to pop. When facebook dies down, which it will eventually, then byebye Zynga. The company is following fads pretty much, which is a short and sweet way to make money now, but not for the long term.

    Personally I hate zynga so much because they seem so bloody ignorant whenever anybody who works there opens their mouths.

      You just posted your secret all over the internet!

      DW I'll keep it in a jar for you.

    So jelly for them, 7-9 really big ones. I wonder how many mega yachts that will purchase.

    hmmmm, my bank account was hacked 2009, thankfully it was only $12, but guess where it that money went.... Zynga online poker. I had been blissfully unaware of their horrid existence till this point. I wonder what percentage of their worth is genuine......

    This is this decade's dot com bubble. A company that produces nothing, hires hardly anyone and doesn't produce any meaningful product is not worth $7-9 billion. As a comparison, EA is worth $14 billion, and Activision-Blizzard is $19b. Does it sound likely that these clowns are worth even a tenth? or a hundredth of these mega-companies?

    I suspect a lot of creative book-keeping is going on behind the scenes. They're walking on a tightrope that only lasts as long as their audiences' attention span and willingness to indulge in micro-transactions. Their business model lasts only as long as it remains in vogue, once that falls through, they'll be toxic assets without even the benefit of physical goods to liquidate.

    And I hope it's coming soon.

    Reminds of of the episode of the Simpsons where Barth & Lisa go to a start up internet company so Bart can popularize his "Angry Dad" idea.

    Toilet roll of company shares anyone?

      This may bite you in the ass when you discover the company shares you gave to Dr. Zoidbreg means that he's now the majority shareholder.

    Why would Google comment Zynga is a bubble destined to burst when they invested a significant amount of money?

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