Mergers & Acquisitions

Mergers & Acquisitions

February 14, 2011

New Zynga Investment Round Sets a Value between $7 and $9 Billion for Gaming Company

It’s no game. Zynga, a social gaming company, is reported to have a value of between $7 billion and $9 billion, according to a report from The Wall Street Journal. That is a definite increase from last April, when the company gave a value of about $4 billion, according to The Journal.

The company is a start-up and is just three years old. The Journal reports that it is currently holding discussions with possible investors. It wants to raise about $250 million in new funds, The Journal reports.

The new valuation shows a pattern at several social media companies. Facebook (News - Alert), Twitter and Groupon have each seen increases in their valuation as the companies look for private investors, reports The Journal. Facebook, for instance, was valued at $50 billion and may have an IPO in a year or two.

The San Francisco Chronicle speculates the intense interest by some investors in investing in Zynga (News - Alert) may be an indication they want to invest before the company could offer an IPO – which will likely lead to a higher price for its stock.

In other company news, TMCnet reports that Zynga announced that Words With Friends, a social word game for the iPhone, iPad and iPod touch, will soon be available on Android (News - Alert) phones and tablets.

Words With Friends for Android will be available on the Android Market, TMCnet adds. The Android version will be a free download and will be offered in February.

In addition, Zynga’s new online game, called CityVille, had up 16 million daily users its first month, The Journal reports.

Zynga has 275 million users a month, The Journal says. The company earned about $400 million in profit in 2010, with approximately $850 million earned in revenue, an unnamed source told The Journal.

 Zynga has raised about $360 million from venture-capitalists and other investors, The Journal reports. Google (News - Alert) also invested in the company.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Carrie Schmelkin

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